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Age Service Pension

Legislative Authority

Veterans' Entitlements Act 1986
Section 7A (qualifying service)
Section
36 (eligibility)
Section 36A to 36M (claims)
Section 36N (rate)
Schedule 6 (calculation of rates)

 

Stated Current Purpose/Intent

To provide income support for Australian veterans and mariners, Commonwealth veterans and mariners, and allied veterans and mariners, in recognition of the effects of eligible service (see Note 1).

Age service pension is similar in many ways to the age pension paid by Department of Human Services but is available five years earlier.

 

Current Eligibility Criteria

A person is eligible for an age service pension if the person:

  • is a veteran or mariner;
  • has rendered qualifying service (as set out in section 7A of the VEA); and
  • has turned 60 years of age.

In addition to the above a Commonwealth veteran or mariner, or allied veteran or mariner (generally) must have been an Australian resident for at least 10 years, or a refugee who holds a permanent entry permit or visa and is a permanent resident.

 

Notes

  1. Service pension is an income support payment and as such is subject to the income and assets tests, unless the pensioner is blind.
  2. From 1 July 1995, the Government introduced changes to the age at which female veterans can be granted an age service pension.  The earliest age a female veteran can be granted the age service pension is lifted in six-monthly increments every two years from 55 to 60 over the period 1995 to 2014.  By 1 January 2014, the eligibility ages for males and females will be the same.
  3. The tables on last page show pension age for veterans.

 

Date of Introduction

The service pension was introduced on 1 January 1936 under the Australian Soldiers' Repatriation Act 1935.  Prior to this, war service disability pensions and a range of other benefits and services were payable from the beginning of World War I by the Australian Government, to compensate war veterans and their dependants for war-caused disablement or death.  These benefits were provided under the War Pensions Act 1914 then by the Australian Soldiers' Repatriation Act 1920 and later by the VEA.  In 2004 members, former members and declared members became eligible for pensions and benefits under the MRCA.

 

Original Purpose/Intent

To compensate Australian veterans for the indefinable and intangible effects of war service that could lead to premature ageing and the loss of ability to earn a living.

 

Significant Changes in Criteria or Purpose Since Introduction

Chronology of changes, including those relating to means testing.

1935

Introduction of means test (comprised of an income test and a property test) for service pensions.

1941

Eligibility provisions were extended to include Boer War veterans.

1942

Eligibility provisions were extended to include World War II veterans.

1950

Legislation was amended to include Korean and Malayan War veterans with operational service (later incorporated in the Repatriation (Far East Strategic Reserve) Act 1956).

1960

Free medical treatment benefits were extended to eligible service pensioners.

1964

The single rate of service pension reached parity with war widow's pension (indexable component).

1965

Eligibility for service pension was extended to wives of ex-servicemen.

Wife's service pension was allowed to be continued after the death of a veteran.

Increase to the "standard rate of pension" if a veteran's spouse was in receipt of either unemployment or sickness benefits from the Department of Social Security.

1968

Service pension eligibility was extended to those veterans who had "special service" as defined in the Repatriation (Special Overseas Service) Act 1962.

1970

Service pension was assessed at single rate where the veteran and spouse were permanently separated owing to infirmity.

1972

Wife's service pension rate was made equivalent to a veteran's married rate.

Married rate provision was introduced when veteran's wife was paid by the Department of Social Security.

1973

Age pensions became taxable.

Portability of service pensions was introduced.

25% of war pension (disability pension) disregarded under the income test.  Blind pensioners and pensioners aged 75 or older were exempted from the income test.

1975

Eligibility extended to include veterans of Commonwealth countries, subject to residency requirements.

50% of disability pension disregarded under the income test.  The age at which no means test applied was reduced from 75 to 70 years of age.

1976

Repatriation pension increases became linked with the CPI.

Means test replaced by an income test.  Property test ceases to apply.

1978

Pensioners aged 70 or older remain on the May 1978 rates unless they are entitled to a higher rate under the income test.

1980

Eligibility extended to allied veterans, subject to residency requirements.

1981

60% of disability pension disregarded under the income test.

1982

Eligibility extended to include Australian, Commonwealth and allied mariners, of World War II subject to residency requirements.

100% of disability pension disregarded under the income test.

1983

Special income test introduced for pensioners aged 70 or older.

1985

Assets tests introduced from 14 March 1985 and applies only to pensioners aged less than 70.

1986

Eligibility extended to veterans with bomb or mine clearance service.

1991

Re-write of Part 3 of the VEA (service pension portions).

Basic income limit indexed from July.

Pensioners aged 70 or older become subject to the same income and assets tests as all other pensioners.

1995

Introduction of requirement for certain age service pensioners to test their eligibility for an overseas pension.

The 10 year residency requirement was removed for refugees who hold a permanent entry permit or visa and are permanent residents.

1996

Lump sum advance of pension introduced.

1997

It was legislated that the single rate of service pension be maintained at least at 25% of all MTAWE.  The relativity between single and married rates of pensions was also retained.

1998

The first MTAWE increase occurred on 26 March 1998.

On 1 July 1998, the Government implemented the Pension Bonus Scheme.  The Pension Bonus Scheme offers pensioners a bonus of 9.4% of pension entitlement paid as a lump sum for each full year of work continued beyond the eligible age pension age, to a maximum of five years.  The purpose of the Scheme is to provide a positive incentive for people to delay retirement.

2000

1 July 2000 taper rate on service pension was reduced from 50 cents in the dollar for income over the free area to 40 cents in the dollar.

2004

Service pension was extended to members, former members and declared members under the MRCA.

2007

20 September 2007, the assets test taper rate reduced to 37.5 cents reduction for each $250 of assets over the free areas.

2009

20 September 2009, the first of the changes introduced following the Harmer Review into the adequacy and sustainability of the pension system. Changes include:

  • the tightening of the income test taper from 40 cents in each dollar of income to 50 cents.
  • Transitional arrangements are in place for those who would otherwise be worse off.
  • Single service pension increased to 66.33% of the combined couples rate.
  • GST Supplement, Pharmaceutical Allowance, Utilities allowance and telephone allowance rolled into a single pension supplement and paid fortnightly with pension.
2010

20 March 2010, combined couples rate of service pension indexed and compared to 41.76% of MTAWE.  Single service pension rate set at 66.33% of combined couples rate.

From 1 July 2010, multiple lump sum advances allowed.  Maximum advance set at 1.5 times fortnightly rate of pension.  Minimum advance set at 0.5 times rate of pension.

2012

Clean energy advance payable for the period 1 July 2012 to 19 March 2013 for eligible recipients.

2013

Clean energy supplement commenced 20 March 2013 for eligible recipients.

2014

Clean energy supplement replaced by energy supplement commenced 20 September 2014.

2015 Income test change: from 1 January 2015, income deeming applies to asset-tested income streams (long term) that are account-based. Products held on, and those in reciept of income support since, 31 December 2014 are grandfathered from the change.