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Overseas War Pensions

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Last amended: Overseas war pensions and the income test

The current gross rate of an overseas war pension is treated as ordinary income for DVA purposes. However, the payments will be excluded from the income test where they:

  • fail to meet the VEA definition of income, by not being available for the person's own use or benefit;     
    VEA ?

    Income test definitions

    Section 5H VEA

    VEA ? (go back)
  • are specifically excluded, for example by legislative instrument, from the VEA meaning of income; or .     
    VEA ?

    Excluded amounts

    Section 5H(8) VEA

    VEA ? (go back)
  • are compensation payments in respect of war-caused disability or death. Where the payments are made directly in respect of war-caused death or incapacity, being a war or war-like operations in which the Crown has been engaged, they are excluded income under the VEA income test.     

For example, foreign payments that are equivalent to a war-caused disability pension paid under Part II or Part IV of the VEA, or payments to reimburse people for the actual cost of treatment of war-related medical conditions do not fit the VEA definition of income. These payments are therefore excluded from the income test.

Adjusted income test includes foreign war disability payments

Where the adjusted income test applies, for example when determining the payability of Income Support Supplement, foreign war disability payments are included in the adjusted income test in the same way as VEA disability pension payments     

VEA ?

General definitions – “disability pension

Section 5Q VEA

VEA ? (go back)

Characteristics of overseas war pensions

Overseas war pensions may be described by overseas welfare agencies in a variety of ways, including “war pension”, “service pension”, “widow's pension”, “survivor benefit”, or “compensation for death”. The income test assessment must be based on the characteristics of the payment, rather than the title of the overseas war pension. For example, an overseas “service pension” may represent a payment in respect of compensation for war-caused incapacity and as a result be more similar to a disability pension paid under the VEA than to a means-tested income support payment.

Where it is clear that the overseas payment shares the essential features of being paid in respect of war-caused incapacity or death, arising from employment in connection with war or war-like operations in which the Crown has been engaged, the payments are excluded from the income test.

The requirement that the Crown be engaged in the war or war-like operations allows overseas war disability pensions paid to members of Commonwealth and Allied armed services for incapacity as a result of war-related service to be exempted from the income test.     

Payments of overseas war pensions to dependants

Related war-caused payments (such as a war widow/er or survivor's payment) paid to dependants are also regarded as being payments in respect of incapacity or death resulting from employment in connection with war/war-like operations, and are also exempted from the income test.     

Payment of British Temporary Allowance for Widows is accepted as being a payment in respect of the war-caused death of the veteran, and is an excluded income amount.  This payment follows the death of a veteran who had a constant care requirement or who was classed as unemployable, with the rate of payment to the widow being based on the rate of the veteran's War Pension prior to death.  Payment continues for a 26 week bridging period, similar to a bereavement payment, until the widow is placed on War Widow's Pension.  This payment is accepted as having the required attributes of a war-caused compensation or disability payment which is necessary to be regarded as excluded income, rather than being equivalent to an income support payment.

General payments

General overseas payments for care and support are assessed as income. For example, general payments (not tied to specific medical conditions) for care and support from the British Officers Association to members who are in need are assessable as income for service pension purposes, as they are not disability-related.

Payments to civilians

Other World War 2 related payments to civilians (other than disability payments to partners or dependants) are treated as assessable income. This is because they do not provide compensation for incapacity or death resulting from employment connected with a war. Examples include the following atomic bomb related payments from the Japanese Government:

  • Special medical care allowance
  • Special allowance
  • Atomic bomb microcephaly allowance
  • Health allowance
  • Health management allowance (HMA)

These payments are periodical allowances, rather than payments or reimbursements for incapacity or actual expenses incurred, and as a result are assessable income.     

Blocked overseas pensions

Blocked pensions are overseas pensions that cannot be accessed. Examples include:

  • pensions that are suspended because a government has stopped payment of pensions to non residents, or
  • pensions that can only be claimed by a recipient being physically present in the other country and official travel warnings advise against all travel to that country now and for the foreseeable future.

Evidence may be required from an independent source, for example an Embassy, or FaHCSIA International Branch, before a delegate can decide that a comparable foreign pension is blocked.     

Where there is satisfactory evidence that the overseas pension is blocked, the payments may be excluded from the income test on the basis that the non-receipt means that they do not meet the definition of income as they are not available for the use or benefit of the pensioner. This assessment may change where a person travels to or resides in the paying country.     

Receipt of both VEA and assessable overseas payments

Pensioners must notify the Department of their receipt of an overseas pension, and the rate at which they are paid. Where both the VEA pension and the overseas pension are means tested, this may trigger a series of adjustments to both the DVA pension and overseas pension until ultimately only one pension remains payable. This series of adjustments cannot be avoided as pension recipients are obliged to inform the Department about any changes in circumstances that may affect the amount of pension they receive, and the Department is obliged to undertake a reassessment when changed circumstances are notified