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Effect of Suspension, Limitation or Cancellation of Pension

Document

Last amended 22 December 2010

Application of rules

The following rules apply when a person's pension has been cancelled due to loss of eligibility or payability, or when a person's pension has been suspended or limited to recover an overpayment.

Circumstances where no bereavement payment

The table below indicates the conditions under which a bereavement payment cannot be made in respect of a person or dependent child.

No bereavement payment can be made if...

and prior to the time of death...

a single pensioner dies,

he or she had lost eligibility for or payability of pension.

one member of a couple dies,

he or she had lost eligibility for or payability of pension.

a pensioner has a dependent child who dies,

the pensioner had lost eligibility for any additional pension in respect of that dependent child.

a pensioner is imprisoned

the pensioner's payment had not been redirected to a partner or child.    

Effect of imprisonment

    

A bereavement payment cannot be made when an income support pension has been suspended due to imprisonment. This is because the definition of pensioner is not met where the person is no longer receiving a rate of pension. Eligibility for bereavement payment does however arise where payments have been redirected to a partner or child while the pensioner is in prison.

Payment where survivor's pension cancelled

If both members of a couple were receiving an income support pension and one member of the couple dies, but prior to the time of death the partner of the deceased pensioner had lost eligibility for or payability of pension, a Single Pensioner Bereavement Payment will be made in respect of the deceased.    

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Single Pensioner Bereavement Payment

Section 8.1.3

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Restoration of pension

If a pension should have been paid to a person during a period of loss of eligibility or loss of payability, and the person, or the person's partner, or a dependent child of the person, had died during that period, the restoration action would include calculation and payment of a bereavement payment.

Bereavement payment may be withheld

    

If a pensioner dies and at the time of death pension payments were suspended or limited because the pensioner had an overpayment, the Commission has the discretion not to pay the bereavement payment. The Commission may choose to offset the bereavement payment against the overpayment.

If a pensioner dies and at the time of death pension payments were suspended for other reasons, the bereavement payment may be withheld with other pension payments until the suspension is resolved.


Payability refers to whether or not a pension or benefit is payable to a person.  A person may meet the basic eligibility criteria for a pension or benefit but that pension or benefit may not be payable to them for a number of reasons such as:

  • income or assets in excess of the relevant limits
  • failure to provide a tax file number;
  • receipt of another pension or benefit;
  • compensation recovery action;
  • overpayment recovery action;
  • failure to take reasonable action to obtain a comparable foreign pension; or
  • imprisonment.

A bereavement payment is an amount payable in respect of a deceased pensioner that represents a continuation of the pensioner's entitlement for a period following the death (the bereavement period).

The payment can be made as:

  • a lump sum in advance, or
  • a continuation of the deceased person's pension instalments, or
  • a combination of both, or
  • a portion of the rate of pension payable to the surviving member of a couple identified as a separate amount only for taxation purposes.

Section 5F(1) of the VEA defines dependent child as having the same meaning as in the Social Security Act 1991.  For income support purposes, dependent child is defined as:

Child under 16 years

  •       the pensioner has legal responsibility either alone or jointly with another person for the day to day care, welfare and development of the young person AND the young person is in the pensioner's care, or
  •       the young person is not a dependent child of someone else AND the young person is wholly or substantially in the pensioner's care.

A child under 16 years cannot be considered a dependent child if:

  •       they are not a full-time student, and
  •       their weekly income from any source is more than the amount specified in section 5(3)(c) of the Social Security Act.    

Child 16 years or older

A young person who has turned 16 years but is under 22 years can still be a dependent child of the pensioner if:

  •       they are wholly or substantially dependent on the pensioner, and
  •       their income in the financial year will not exceed the personal income limit, and
  •       they are receiving full-time education at a school, college or university.

A child over 16 years cannot be considered a dependent child if:

  •       they receive a social security pension or benefit such as youth allowance, or
  •       their personal income is more than the amount specified in section 5(4)(b) of the Social Security Act.    

Income includes earning from casual, part-time or full-time earnings.

Note: the meaning of a dependent child for DVA income support pension purposes is not the same as the meaning for Family Tax Benefit purposes.

 

 

A bereavement payment is an amount payable in respect of a deceased pensioner that represents a continuation of the pensioner's entitlement for a period following the death (the bereavement period).

The payment can be made as:

  • a lump sum in advance, or
  • a continuation of the deceased person's pension instalments, or
  • a combination of both, or
  • a portion of the rate of pension payable to the surviving member of a couple identified as a separate amount only for taxation purposes.