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Notification Obligations and Date of Effect
Last amended: 09 September 2013
Earnings changes are notifiable events
Section 54 VEA provides that a pension recipient may be given a notice that requires them to inform the Department of 'a specified event or change in circumstances' that may affect their payment.
All earnings amounts are 'specified events' for the purposes of determining a pensioner's notification obligations. The publication You and Your Pension, issued periodically to pensioners, contains information regarding a pensioner's notification obligations and is accepted as being a valid notice under section 54. In relation to earnings, You and Your Pension provides that a pensioner must notify the Department of any increase in earnings of more than $2.00 per fortnight (not a member of a couple) or more than $4.00 per fortnight (member of a couple). After applying the income test taper rate (50%) to these amounts, it is evident that pensioners are required to notify any income change that will result in the minimum permissible pension reduction of $1.
You and Your Pension – electronic version on the DVA website
Notification obligations can vary from those generally outlined in You and Your Pension (explained above) when the pensioner has variable earnings or is subject to Specific (Periodic) Reviews. To avoid onerous reporting requirements for minor and inconsequential amounts, specific review arrangements can be agreed with the pensioner and notified to them in writing. For Variable Earnings, these reviews are generally done over 13 weeks and the income earned over that period is averaged out over the period. The averaging of changing income amounts over the given period provides a reasonable reflection of the current rate of income. For Specific (Periodic) Reviews, agreement may be reached with the pensioner to defer the assessment of minor earnings changes until the end of a pre-determined period. However, in these situations, any significant earnings changes (such as new employment, changes in hours etc) should be notified within the usual 14 day period.
Date of effect depends on compliance
As increases in earnings fall within a pensioner's notification obligations, the date of effect (for cancellations or reductions) depends on whether the pensioner has complied with those obligations.
Where the pensioner notifies the Department of an earnings increase within the allowed notification period (generally 14 days from the event date), the date of effect of the pension reduction/cancellation is the day following the end of the notification period.
Where the pensioner does not comply with their notification obligations (does not notify, or notifies outside the allowed 14 day period), the date of effect is the date of the actual earnings event.
Cessation of employment
Where employment ceases, the event date for the pension reassessment is the day following the day on which the employment ceased, being the time from which the previously held earnings are no longer received and are no longer assessable.
The taper rate is used to reduce the rate of a person's service pension or income support supplement if they or their partner have any ordinary income in excess of the ordinary/adjusted income free area (IFA). Any income in excess of the IFA will reduce the maximum payment rate by a 'taper rate' of 50 cents in the dollar (or 40 cents for transitional rate of pension). The result is the income reduced rate.
In addition to the income test taper, any assets in excess of the assets value limit will reduce the maximum payment rate per fortnight by 37.5 cents for every $250 over the Asset Value Limit. The result is the assets reduced rate
The date of effect, or effective date, is the day on which a certain incident or 'event' begins affecting a pension assessment.