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3.11.1 Overview of Lump Sum Advance
Last amended: What is a lump sum advance
A lump sum advance is an advance payment of pension up to 3/52 of the [glossary:advance:] payment [glossary:eligible amount:]. If additional funds are required for any purpose then an amount of pension can be paid in advance. This advance may be for any purpose, for example:
- unplanned expenses,
- replacement, or
- repairs of household goods.
This advance is payable if the pensioner is an eligible pensioner receiving a [glossary:pension:] from DVA.
Applying for lump sum advance
To apply for a lump sum advance an application must be made in writing in accordance with a form which has been approved by the Commission. Form D0556 Application for Lump Sum Advance Payment of a Pension has been approved by Commission for this purpose. An application for a lump sum advance may be lodged electronically, by telephone or by email, provided the applicant submits all the information which is sought by Form D0556. Form D0556, or an equivalent file record which records the same information as Form D0556, can be completed by a DVA employee and then maintained on file as a written record of the lump sum advance application. The client's telephone call or email request for a lump sum advance can be accepted as their authorisation for an application to be made by another person on their behalf. Lump sum advance applications may also be lodged by fax, as covered by Legislative Instrument R27/2010 signed by the Commission on 16 April 2010 which authorises the electronic lodgment arrangements under VEA section 5T.
Payment of lump sum advance
Once the delegate of the Commission is satisfied that the pensioner is eligible for the advance payment, the amount granted should be paid on the next practicable pension payday on which the pensioner is paid an instalment of pension. The payment must be paid as a lump sum.
Repayment of lump sum advance
The advance payment deduction is calculated by dividing the full amount of the advance payment by 13. This rate of deduction from the pension ensures the advance payment is repaid in six months. An advance payment deduction is not to be made from the pension on the same payday that the advance payment is made. The pensioner may request in writing to repay the advance payment in a shorter period of time by making a one off additional repayment or by requesting a higher fortnightly deduction rate.
Repayment of lump sum advance – hardship assessment
Where an advance payment deduction causes severe financial hardship due to a change in circumstances the pensioner can apply in writing to the Commission to have the rate of deduction reduced or stopped.
Review of a lump sum advance decision
A pensioner who is dissatisfied with a decision of the Commission in relation to an advance payment can request the Commission to review the decision. A written notice of the making of the decision and of the right of the person to have the decision reviewed must be provided to the person. The Commission after review may affirm the decision or set it aside and substitute a new decision for it.
According to the Income Tax Assessment Act 1997, the supplementary amount of a Veterans' Affairs pension is the total of:
- any payment of Rent Assistance;
- any payment of Dependent child add-on;
- any payment of Remote area allowance;
- any payment of Tax-exempt pension supplement; and
- any payment of Energy supplement.