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3.12.2 Eligibility for Crisis Payment

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Last updated 21 December 2006

Eligibility for crisis payment

To be eligible for a crisis payment a person must be in severe financial hardship. That is, the person's liquid assets are less than:

  • twice the fortnightly amount at the 'maximum payment rate' of DVA income support pension payable to a person who is a member of a couple.
Liquid assets for the purpose of crisis payment

Liquid assets are cash and readily available funds and include, but are not restricted to, assets such as:

  • shares,
  • debentures,
  • money with financial institutions (regardless of whether the funds can be withdrawn immediately), and
  • money owed by an employer.

Note: Liquid assets do not include a qualifying eligible termination payment as defined in the Income Tax Assessment Act 1936.

Maximum payment rate for assessment of severe financial hardship

The maximum payment rate is inclusive of the basic rate of pension and associated allowances before the income and assets tests are applied but excludes remote area allowance. For income support supplement recipients the ceiling rate does not apply.

Note: The 'maximum payment rate' for the assessment of severe financial hardship is different to the 'maximum basic rate' on which the crisis payment rate is based.


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.

 

 

In general terms, this is where someone is suffering from serious money difficulties, such as insufficient income to manage their basic living expenses. More detailed descriptions of various financial hardship situations are covered under the following topics:

  • financial hardship provisions under section 52Y of the VEA, for the purpose of the calculating a rate of service pension or income support supplement,
  • financial hardship for the purpose of crisis payment,
  • hardship amount for income stream purposes,
  • hardship assessment of lump sum advance repayments under section 79O of the VEA,
  • financial hardship for special deeming exemptions of 'saved' personal loans and 'frozen' unlisted property trusts,
  • early release of superannuation benefit due to severe financial hardship, and
  • proof of identity at time of pension claims in emergency or hardship situations.

 

 

The maximum payment rate is the amount calculated by adding the maximum basic rate applicable to a person to any rent assistance and pension supplement payable. See SCH6-A1(2) of VEA (Method Statement 1 Step 4) and SCH6-A1(6) of VEA (Method Statement 5 Step 4).

 

 

Income support pension is:

 

 

The term not a member of a couple covers all persons who are not covered by the definitions of member of a couple.

 

 

According to Section 5E(2) of the VEA a person is a member of a couple, if they are:

  • legally married to another person and is not living separately and apart from the other person on a permanent basis; or
  • living in a prescribed registered relationship with the other person (whether of the same sex or a different sex) and is not living separately and apart from that other person on a permanent basis; or
  • all of the following conditions are met:
  • living with another person, whether of the same sex or a different sex;
  • not legally married to that person;
  • in a de facto relationship with that person; and
  • not in a prohibited relationship

The term “partnered” is also commonly used.

Remote area allowance is a supplementary payment added to the rate of income support pension where the pensioner's usual place of residence is situated in a remote area, and where the pensioner is physically present in the remote area.

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.

 

 

The ceiling rate of service pension and income support supplement (ISS) is applied to all war widows/widowers when assessing the rate of pension. This amount was previously frozen at $124.90 per fortnight, however, since legislation was introduced in September 2002, is now indexed twice yearly in line with percentage increases in the maximum rate service pension. A higher ceiling rate can apply, however, in the following cases:

If a person:

  • became a war widow/widower-pensioner before 1 November 1986,

  • has continually received service pension, social security pension or ISS since that date, and

  • the rate of pension immediately before that date was more than $120.10

in such a case the ceiling rate is equal to the pre-November 1986 rate plus 4%.

If a person:

  • is a person to whom ISS is payable,

  • is not permanently blind, and

  • whose Part II or IV pension is [glossary:compensation reduced:DEF/Compensation reduced pension],

the ceiling rate is the sum of the ceiling rate as calculated above and the amount of the reduction in the Part II or Part IV pension. The maximum ceiling rate cannot exceed the maximum rate of single service pension. For ceiling rates refer to SCH6-A4 to A9 of VEA. The amount of increase to the ceiling rate pension under Part II or Part IV is worked out by using the formula in SCH6-A9 of the VEA.