What is an obligation?
The VEA provides the Secretary with a wide range of information gathering powers to enable decision-makers to satisfy themselves as to whether a person is or was eligible for a payment, a particular rate of payment or some other benefit, such as treatment. This chapter primarily deals with one of those information gathering powers - obligations imposed under s54 of the VEA, which require a person to notify the Department of an event or change in circumstances that:
- has occurred, or
- is likely to occur, and
- may affect their entitlement to a pension, payment or benefit.
The purpose of recipient obligations
Obligations imposed under s54 of the VEA serve two main purposes:
- they provide a means for the Department to keep control over the expenditure of Government funds, and
- they make people aware of their entitlements.
How are obligations imposed?
Obligations are imposed by way of an obligation notice. An advice letter is most commonly used. An obligations notice must adhere to certain requirements in order to be legally binding on the recipient. Similarly, the recipient must respond to an obligations notice in a specified manner.
Notification periods
An obligation notice specifies the time frame within which the recipient must notify of changes in their circumstances. This specified time frame is called the notification period. There are different notification periods according to the type of pension, payment or benefit the person receives.
Penalties for not meeting obligations
There are penalties for failing to meet obligations, however a person is only expected to comply with an obligation notice to the extent that they are able to comply. There are specific situations that render a person unable to comply. No penalty is applied in these cases.
Obligations where agent arrangements exist
Where an agent has been authorised to receive payments on behalf of a person, both the person and agent are legally obliged to notify the department of changes to the person's circumstances. A person's obligations under sections 54, 54A, 54AA and 127 of the VEA also apply to their agent.
Obligations do not apply to the agent where agency arrangements exist with a group payee.