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Non-Accruing Membership

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Definition of non-accruing membership

    

VEA ?

Non accruing membership – Commission's discretion

Section 45TO VEA

VEA ? (go back)

Under the VEA, non-accruing membership status is given for a specified time when a person:


While the work test does not apply during non-accruing membership, a person's PBS membership is not automatically non-accruing if they cannot meet the work test. Non-accruing membership applies only in specified circumstances, during which the person remains a member of the scheme but cannot add to their bonus periods.

Impact of non accruing membership on accrual

    

During periods where a person is a non-accruing member of the pension bonus scheme [glossary:(:]PBS[glossary:):], the person is still a member of the scheme but does not accrue a bonus. Periods of accruing membership are considered to be continuous provided they are connected by unbroken periods of non-accruing membership. This means that if a member is:

the non-accruing period, in effect, did not exist. However, no bonus accrues during the non-accruing period.

Disposal preclusion period

    

VEA ?

Section 45TN(1) VEA – Non-accruing membership—disposal preclusion period

Section 45UT VEA – Disposal preclusion period—dispositions before 1 July 2002

Section 45UTA VEA – Disposal preclusion period—dispositions on or after 1 July 2002

VEA ? (go back)

If a person or their partner disposes of assets to a value sufficient to become assessable under the deprivation rules, the person and their partner are subject to a disposal preclusion period. This period begins on the first day an amount would be included in the assessment because of the disposal, and ends five years from that date. If there are a number of disposals, it is possible for one 5-year period to overlap or follow another. During this period or periods, they are non-accruing members of the pension bonus scheme. After the 5 year disposal preclusion period has ceased, and the person is not yet a post 70/75 member, they may be able to revert to accruing membership of the scheme.

Disposal preclusion period – change of marital status

If a person ceases to be a member of a couple for any reason, and they are subject to a preclusion that took place wholly because of the disposal of a particular asset by their partner, their disposal preclusion period ends.    

Disposal preclusion period – consideration subsequently received

If a person who disposes of assets on or after 1 July 2002 subsequently receives full or partial consideration for the disposal and consequently would no longer have a deprived asset in their pension assessment according to Subdivision BB of Division 11 of Part IIIB of the VEA, their disposal preclusion period will cease.

A person who disposed of assets prior to 1 July 2002 will remain in a disposal preclusion period for 5 years from the date of disposal of assets regardless of whether they later receive consideration for the disposal.

Carer preclusion period

    

VEA ?

Section 45TN(2) VEA – Non-accruing membership—carer preclusion period

Section 45UU VEA – Carer preclusion period

VEA ? (go back)

A person is in a carer preclusion period throughout the period for which they receive one of the following:

During this period the person is a non-accruing member of the pension bonus scheme.

Compensation preclusion period generally does not apply to DVA scheme

Because compensation recovery rules under the VEA only apply to those under pension age, a compensation preclusion period would not generally apply to people participating in the pension bonus scheme at DVA.

Compensation preclusion period – Centrelink scheme

If a person who has been deferring age pension becomes a war widow/widower and subsequently claims pension bonus, any bonus period(s) they accrued under the Centrelink scheme may be included in the calculation of their bonus. If that person would have been subject to a compensation preclusion period while deferring age pension, they would have been subject to a non-accruing period for that time.    

Non-accruing membership – Commission's discretion

The Commission has declared by legislative instrument certain kinds of members are non-accruing members. These include a PBS member who:     

More ?

Legislation Library – Income Support – Pension Bonus

VE-DECLARATION/2007-Pension Bonus Scheme-Non?accruing Members

More ? (go back)

  • is a participant in the community development employment project (CDEP), or
  • is in prison, or
  • is in psychiatric confinement because they have been charged with committing an offence, or
  • is not working but has a working partner, who is not yet a member but intends to be a member of the pension bonus scheme at DVA or Centrelink.

The person is a non-accruing member for as long as they meet one of the above descriptions.

Non-working partner

If the person is a member of the scheme who relies on their partner's work to meet the work test, then they are non-accruing members and cannot accrue bonus periods until such time as their working partner qualifies for a designated pension and registers as a member of the scheme.

Non-accruing membership with maximum periods

A person's membership of the scheme can also be non-accruing if the member would otherwise fail the work test because of the following circumstances/event:

Circumstances/event

Duration of non-accruing membership

Member's partner dies

Up to a maximum period of 13 weeks from the date of death

Prior to 1 January 2008, the person takes a continuous period of sick leave of at least 4 weeks

Up to a maximum of 26 weeks

On or after 1 January 2008, the person takes any paid leave or unpaid leave from employment (or any combination of leave types)

Up to a maximum of 26 weeks

On or after 24 August 2006, the person suffered a reduction in the amount of gainful work they performed because of a major disaster as defined in section 23 of the Social Security Act 1991

Up to a maximum of 13 weeks

On or after 1 March 2006, the member suffered a reduction in the amount of gainful work performed because of Cyclone Larry

Up to a maximum of 13 weeks

Member receives compensation

Up to a maximum period equivalent to the preclusion period that would apply if:

  • the member had not reached pension/qualifying age, and
  • was receiving a compensation affected pension.
Leave from employment

Leave from employment covers all paid and unpaid leave where the PBS member's employment is not terminated and a return to the same employer is expected after their period of leave, or where the person's employment does not terminate until after the leave is taken. This includes self-employed members who will return to self-employment after their leave.

Treating periods of leave as non-accruing membership from 1 Jan 2008

If a member is already on leave as at 1 January 2008 the start of the 26 week limit on non-accruing membership for leave will start on the date that the member commenced leave.

Membership status after non-accruing period

At the end of a non-accruing period, the person's membership will revert to be accruing and they must pass the work test to remain in the scheme. A member must have a period of accruing membership between any periods of leave that are treated as non-accruing membership if they do not wish to exit the scheme.


Veterans' Entitlements Act 1986.

When a person disposes of more than $10,000 in a designated year, they are in a disposal preclusion period and their membership of the pension bonus scheme is non-accruing. Disposal under the RAFS and RASF schemes do not attract a disposal preclusion period.

 

 

When a member of the pension bonus scheme receives a carer payment, they are in a carer preclusion period and their membership of the scheme is non-accruing.

 

 

Means carer payment under the Social Security Act 1991.

Centrelink is a Government service delivery agency responsible for delivering a range of Commonwealth Government services (including social security pensions and allowances) to the Australian community through a network of more than 400 Centrelink offices.

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.

 

 

According to Section 179 of the VEA, the Commission is a body corporate under the name of Repatriation Commission.

 

 

Non-accruing membership status is given for a specified time when a person:

  • triggers a disposal preclusion period,
  • triggers a carer preclusion period by receiving either carer payment from Centrelink or ISS as a carer,
  • is on extended, continuous sick leave for at least 4 weeks and not more than 26 weeks,
  • is a non-working person registered for the scheme, who is waiting for their working partner to register, where the non-accruing status lasts until the partner registers,
  • is a participant in the community Development Employment Program, or
  • is in gaol.

Commission may, by Gazettal notice, declare that other kinds of members are non-accruing members.

 

 

The pension bonus scheme closed to new entrants on 20 September 2009. Existing members can continue in the scheme under the rules that existed prior to 20 September 2009. The pension bonus scheme provided an incentive for older Australians to remain in the workforce and defer receipt of income support pension. The incentive was a bonus, payable if all eligibility criteria and rules were satisfied.

The pension bonus was a once-only, tax-free lump sum payable to a person who, on reaching their special date of eligibility, voluntarily deferred retirement for at least one year and registered as a member of the scheme. The pension bonus was claimed at the same time as claiming pension and is calculated using the annual rate of basic pension payable at grant, multiplied by the bonus periods accrued.

The Pharmaceutical Benefits Scheme (PBS) is a scheme established to make pharmaceuticals available to DVA and Centrelink pensioners and beneficiaries at concessional rates.

A member of the pension bonus scheme has accruing membership once they have registered and are meeting the requirements of the work test.

A non-accruing period is the period during which a person is a non-accruing member and not able to add to the accrual of existing bonus periods. When their non-accruing period ends, they will become an accruing member again if they continue with the pension bonus scheme and are not a post 70/75 member of the scheme. Non-accruing members can claim a pension bonus in this period.

 

 

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.

An asset means any property, including property outside Australia.

A person's 'partner' is someone who is a member of a couple with that person.

Means carer payment under the Social Security Act 1991.

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.