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General Criteria for Application of the Financial Hardship Rules

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Last updated: 12 November 2007

Access to financial hardship

    

Hardship provisions can apply to people who either:

Additional conditions to be met before hardship provisions apply

The following conditions must also be met before hardship provisions can apply:

  • either:
  • the person must not have disposed of assets of more than $10,000 within a year, or of income, for less than adequate financial consideration, or
  • if the person has disposed of income or assets the Commission has determined that for the purposes of the application of the hardship provisions, the disposal is to be disregarded,
Crisis payment to people in severe financial hardship

A crisis payment is a one off non-taxable payment to extend assistance to people who are in severe financial hardship and who:

  • have been forced to leave their home due to an extreme circumstance, or
  • have been subjected to domestic or family violence and choose to remain in the family home after the perpetrator has left or been removed, or
  • have just been released from lawful custody.

The payment is designed to assist in the establishment of a new residence or to re-establish a current residence after domestic or family violence has occurred.    


Assets reduced rate is the amount calculated when the reduction for assets is subtracted from the maximum payment rate. See SCH6-A1(2) of VEA (Method Statement 1 Step 8) and SCH6-A1(6) of VEA (Method Statement 5 Step 8).

 

 

A service pension is an income support payment broadly equivalent to the social security age and disability support pensions. It may be paid once a veteran or partner has reached the nominated age or is incapacitated for work.

ISS is an income support payment that may be paid to eligible war widows and widowers under the VEA and persons receiving wholly dependent partners' compensation under the MRCA, and who satisfy the means tests. It is an indexed rate, increased twice-yearly in March and September in line with changes to the cost of living and/or average wages. Income Support Supplement (ISS) legislation commenced on 20 March 1995. It is a payment created to replace the ceiling rate income support age, carer, wife and disability support pensions, paid to war widows/widowers by Centrelink.

 

 

One element of the means test for income support pensions whereby the rate of pension payable to a pensioner reduces progressively as their assets increase above a certain threshold known as the assets value limit (AVL).

An asset of a person is an unrealisable asset if:

  • the person cannot sell or realise the asset and cannot use the asset as a security for borrowing, or
  • the person could not reasonably be expected to sell or realise the asset and could not reasonably be expected to use the asset as a security for borrowing.

A crisis payment is a one-off non-taxable payment to extend immediate financial assistance to people in severe financial hardship who:

  • are forced to leave their home due to extreme circumstances, such as domestic or family violence or a house fire, or
  • have been subjected to domestic or family violence by a family member and choose to remain in the family home after the perpetrator has left or been removed from the home, or
  • released prisoners released from either goal or psychiatric institutions.