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B47/1995 AGE EQUALISATION CHANGES TO QUALIFYING AGE AND PENSION AGE FOR FEMALES EFFECTIVE 1 JULY 1995

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DATE OF ISSUE:  26 JULY 1995

AGE EQUALISATION CHANGES TO QUALIFYING AGE AND PENSION AGE FOR FEMALES EFFECTIVE 1 JULY 1995

TABLE of CONTENTS

BACKGROUND............................................................3

PENSION AGE............................................................3

AGE EQUALISATION TIMETABLE..............................................4

Pension Age for female service pension veterans & female ISS recipients..................4

Pension Age for female service pension partners, female non pensioner partners and female carers5

PENSIONS INFORMATION PROCESSING SYSTEM (PIPS)...........................6

Processing New Grants................................................6

SUPERANNUATION........................................................6

Managed Investment Screen (PP.MI)......................................6

Fortnightly MI Update Run - $MIFORT.....................................7

Automatic Grant of War Widow/er and ISS by DPS..................................7

Grant of ISS for current War Widow/er...........................................7

TAXATION LIABILITY RULES.................................................7

Service pension paid to a female veteran in her own right........................7

Female ISS recipients. (OA, PI, DC, CA, TX).................................7

Service pension paid to a female partner of a veteran..........................7

Carers pension......................................................7

OTHER APPLICATIONS OF PENSION AGE......................................8

Pension Loan Scheme (PLS)............................................8

Commonwealth Seniors Health Card (CSHC)................................8

Education Entry Payment (Ed EP).........................................8

Compensation Affected Payments (CAP)...................................8

ADVICES SYSTEM

Grant Advice - Invalidity Grounds.........................................8

Daily/Fortnightly Advice - Removal Of Compulsory Preserved Superannuation Exemption8

LEGISLATION.............................................................9

CONTACT OFFICERS.......................................................9

BACKGROUND

In the 1993/94 Budget, the Government announced that the qualifying age for:

(a)female veterans applying for service pension, currently 55, would be increased over a               twenty year period until it equated to the qualifying age of 60 for male veterans;

(b)female Income Support Supplement (ISS) recipients will also have the same qualifying               age as female veteran service pensioners, currently 55 and increased over a twenty year               period until it equated to the qualifying age of 60 for male ISS recipients; and.

(c) the Pension Age for female service pensioner partners and female non pensioner partners               will similarly increase from a current 60 years to 65 years over a twenty year period.

PENSION AGE

2.  The Veteran's Entitlements Act has been amended and the definition of "pension age" has been removed from subsection 5Q (1) and is now outlined in section 9A for a veteran, and section 9B for any other person.

3.  Effective 1 July 1995, these legislative changes will allow for the progressive increase of pension age from:

  • 55 to 60 for a female veteran including female ISS recipients.

see the Age Equalisation Table 1 following

Note:  Pension Age for these clients as outlined in Table 1 relates specifically to qualifying age and requirements and the exemption of superannuation products from the income and asset test prior to pension age.  Table 2 for these clients is to apply for taxation purposes.

  • 60 increasing to 65 for any other woman including;

- partner service pensioners,

- partner DSS pensioners,

- partner non pensioners, and

- carers.

see the Age Equalisation Table 2 following

Note: Pension Age for these clients as outlined in Table 2 relates specifically to the exemption of service pension for taxation purposes and the exemption of superannuation products from the income and asset test prior to pension age.  Qualifying age is not relevant to this pensioner group.


AGE EQUALISATION TIMETABLE

4.  The Pension Age is to be raised progressively as follows:  The age limit increases by six months every two years beginning on 1 July 1995 and finishing on 1 July 2013 (i.e. twenty years from the Budget announcement in 1993).

5.  Pension age for ISS will be the same as a veteran's pension age (i.e. 55 female, 60 male) subject to the age equalisation changes below.

Table 1.

Pension Age for female service pension veterans and female ISS recipients

Effective Date

Pension Age

Period for Dates of Birth

before 30/6/1995

55 years

prior to  30/6/1940

1 / 7 / 1995

55 years 6 months

1/7/1940  -  31/12/1941

1 / 7 / 1997

56 years

1/1/1942  -  30/6/1943

1 / 7 / 1999

56 years 6 months

1/7/1943  -  31/12/1944

1 / 7 / 2001

57 years

1/1/1945  -  30/6/1946

1 / 7 / 2003

57 years 6 months

1/7/1946  -  31/12/1947

1 / 7 / 2005

58 years

1/1/1948  -  30/6/1949

1 / 7 / 2007

58 years 6 months

1/7/1949  -  31/12/1950

1 / 7 / 2009

59 years

1/1/1951  -  30/6/1952

1 / 7 / 2011

59 years 6 months

1/7/1952  -  31/12/1953

1 / 7 / 2013

60 years

1/1/1954  onwards

6.  Pension Age in Table 1 above applies specifically to female service pension veterans and female ISS recipients and relates to:

  • qualifying age requirements; and

  • the exemption of superannuation/managed investment products from income and assets test assessment until Pension Age.

Note : where pension age is based on age plus 6 months (eg. 55 years and 6 months), there may be no corresponding date in the calendar month six months forward of the birthday.

As an example: given a date of birth of 31/8/41, based on the above table the client is eligible for pension or ISS at 55 years and 6 months of age ie 31/2/97 (31/8/96 plus 6 months).  As February only has 28 days and there is no 31/2/97 on the calendar, the system will automatically add six calendar months, that is, the last date in the relevant month as the calculated date ie 28/2/97.

Table 2.

Pension Age for female service pension partners, female non pensioner partners and female carers

Effective Date

Pension Age

Period for Dates of Birth

before 30/6/1995

60 years

prior to  30/6/1935

1 / 7 / 1995

60 years 6 months

1/7/1935  -  31/12/1936

1 / 7 / 1997

61 years

1/1/1937  -  30/6/1938

1 / 7 / 1999

61 years 6 months

1/7/1938  -  31/12/1939

1 / 7 / 2001

62 years

1/1/1940  -  30/6/1941

1 / 7 / 2003

62 years 6 months

1/7/1941  -  31/12/1942

1 / 7 / 2005

63 years

1/1/1943 -  30/6/1944

1 / 7 / 2007

63 years 6 months

1/7/1944  -  31/12/1945

1 / 7 / 2009

64 years

1/1/1946  -  30/6/1947

1 / 7 / 2011

64 years 6 months

1/7/1947  -  31/12/1948

1 / 7 / 2013

65 years

1/1/1949  onwards

7.  Pension Age in Table 2 above applies to female service pension partners, female non pensioner partners and female carers and relates to the exemption of superannuation/managed investment products from the income and assets test assessment until Pension Age.

8.  The above table is also relevant for the taxation of service pension of female veterans and ISS recipients as well as for female service pension partners and carers.  (DSS Age Pension Age is the applicable age for taxation purposes for this group as outlined in the Tax Act.  This table parallels changes to the Age Pension Age for women.)  Full tax liability rules are outlined later.

Note : where pension age is based on age plus 6 months (eg. 62 years and 6 months), there may be no corresponding date in the calendar month six months forward of the birthday.

As an example: given a the date of birth of 31/8/41, based on the above table the client is eligible for pension or ISS at 62 years and 6 months ie 31/2/04 (31/8/03 plus 6 months).  As February only has 28 days and there is no 31/2/04 on the calendar, the system will automatically add six calendar months, that is, the last date in the relevant month as the calculated date ie 29/2/04.

PENSIONS INFORMATION PROCESSING SYSTEM (PIPS)

Processing New Grants

9.  New claims examiners need to be aware of the new tables when advising of eligibility or accepting new claims from female veterans or female ISS claimants.

10.  Current edit and warning messages have been altered on the PP.PA, PP.PI and PP.SU screens to recognise the progressively increasing Pension/Qualifying Age limits of 55+ to 60 years for female veterans and female ISS recipients (see Table 1); and 60+ to 65 years for female service pension partners and female non pension partners (see Table 2).

SUPERANNUATION

Managed Investment Screen (PP.MI)

11.  Superannuation products are automatically exempted from the income and asset test if the client is under pension age.  Existing edits and messages to automatically apply or remove superannuation exemptions have been changed to recognise the increased Pension Age limits of 55+ to 60 for female veterans and female ISS recipients (see Table 1) and 60+ to 65 years for female service pension partners and female non pension partners (see Table 2).  Edits on superannuation products apply where the products are:

  • assessed but the client is under Pension Age; and

  • exempted but the client has reached pension age;

Fortnightly MI Update Run - $MIFORT

12.  Similarly $MIFORT which recognises when a client with an exempt superannuation product has reached Pension Age (i.e. when the client should lose their exempt status) has been programmed to recognise the changes in Pension Age.

Automatic Grant of War Widow/er and ISS by Death Processing System (DPS)

13.  Upon the death of a veteran (POW, TPI, EDA, SDA item 1-6, BLI. DP etc), ISS will be automatically granted by the DPS where the surviving spouse is a service pensioner partner of qualifying age.  DPS has been amended to recognise the progressive increase in the qualifying age requirement of the surviving client (i.e. 55+ 60 for females).  As currently occurs, if the client is under qualifying pension age, War Widows pension will be automatically granted by DPS but a manual investigation will be required to grant ISS on other than age grounds.

14.  ISS can be granted to clients under qualifying pension age if they:

  • are permanently incapacitated (PI);

  • have dependent children; or

  • are a carer.

Grant of ISS for current War Widow/er

15.  A claim for ISS by a client already in receipt of War Widow/er pension may be received from a DSS pensioner or a non pensioner who has just reached Pension Age or claims PI or pension on other grounds.

16.  ISS New Claim processing through PIPS applies the same edits and recording regarding qualifying age (OA or PI) and taxable amounts as grants of female veteran service pension.

TAXATION LIABILITY RULES

Service pension paid to a female veteran in her own right

17.  Service pensions granted on PI or SPTB grounds now become taxable at the new pension age limits for ex-service woman of 60+ to 65 (see Table 2).

ISS female recipients. (OA, PI, DC, CA, TX)

18.  Currently, ISS is taxable if granted on age (OA), dependent children (DC), or carer (CA) grounds.

19.  ISS granted on the grounds of PI (permanent incapacity) is tax exempt until age pension age of 60+ to 65 is attained (see Table 2).

Note:  if a client loses PI status and is still under pension age, the entitlement class merely changes from PI to TX (taxable) and the client does not lose ISS payment.

Service pension paid to a female partner of a veteran

20.  Currently a service pension paid to a female partner with a male veteran service pensioner partner granted on PI or SPTB grounds is taxable except where the female partner is less than 60 years and the male veteran is less than 65 years of age.  In cases where the male veteran dies and the female partner pension is continued, that pension remains exempt while the female partner is under 60 years of age.

21.  The only change to the above is to replace the age 60 requirement for the female partner with the new pension age of 60 + to 65 years (see Table 2).

Carer's service pension

22.  Currently service pension is taxable income except where both the carer and the pensioner are under the age pension age (65 years for male and 60 years for a female) and where the pensioner was granted service pension on PI grounds.  The only change is to the Pension Age of a female carer, which is altered from 60 to 60+ to 65 years as detailed in Table 2.

23.  Carer service pensioners' tax statements are manually maintained each fortnight.

Note:  the existing rules for non taxable components of payments (rent assistance, child related payments etc.) continue to apply.

OTHER APPLICATIONS OF PENSION AGE

Pension Loan Scheme (PLS)

24.  To be eligible for payment under this scheme, clients must be over qualifying age for a veteran or pension age for a partner.  Eligibility for the PLS is determined manually by SP examiners and they will need to be aware of the increasing age limit for female veterans and female service pensioner partners.

Commonwealth Seniors Health Card (CSHC)

25.  Eligibility for a CSHC requires the client to be of qualifying age for a veteran or pension age for a partner.  Eligibility for CSHC is determined manually and SP examiners will need to be aware of the increasing of age requirements for female veterans and pension age for female partners.

26.  There are edits relating to age on the EATERS data collection screen (EN.SC) for the CSHC.  These edits recognise the changed age requirements for grants to female recipients.

Education Entry Payment (Ed EP)

27.  These payments can only be made to partners under pension age.  Eligibility and payment considerations are a fully manual action determined by an examiner.  Examiners should therefore refer to the changed pension ages for female service pension partners.

Compensation Affected Payments (CAP)

28.  Assessment of compensation related payments is only applicable to clients under pension age.  Assessment and review is manually determined by an examiner.  Examiners should refer to the changed pension ages for female service pension veterans and female service pension partners or carers.

ADVICES SYSTEM

Grant Advice - Invalidity Grounds

29.  A general information sheet is included for all grant advices whenever a client is granted service pension or ISS on permanent incapacity grounds and contains a reference to taxable age.

30.  The age reference for when pension becomes taxable is to be changed from a specific age reference eg. 60 (dependent on the client) to a general pension age reference.  i.e. "your pension become taxable when you reach pension age".

Daily/Fortnightly Advice - Removal Of Compulsory Preserved Superannuation Exemption

31.  This advice paragraph contains an explanation of the automatic reassessment of a client's managed investments due to their reaching pension age.  The only change to the wording involves replacing reference to the inclusion of the exempted products from the old 55, 60 and 65 pension age limits, with reference to 'pension age' only.

LEGISLATION

32.  The relevant legislation effective from 1 July 1995 was passed by Parliament in October 1994 and was given Royal Assent on 8 December 1994.

CONTACT OFFICERS

33.  If State Officers have any queries related to this change, they should first contact their system support officer.  If further clarification is required, please contact either the Project Officer, Tim Adams (phone 03 9284 6450) or Barry Threlfall (phone 08 213 2440).

MURRAY HARRISON

BRANCH HEAD

INCOME SUPPORT