Instalment of pension
Service pension and ISS are paid fortnightly in arrears. An instalment of pension is payable in respect of the number of days in each fourteen day pension period for which the person is eligible and the pension is payable. The instalment for the pension period will be payable on the next pension payday after the end of the pension period.
Eligibility and payability for service pension and ISS
Daily entitlement
'Daily entitlement' is the amount of pension that is payable on a given day. This method of calculating pension payments means that the pension for each payday will be made up of an amount for each day of the fourteen day pension period. The rate of pension payable to a person for a day is calculated by dividing the annual rate of pension by 364. This figure represents 26 fortnights multiplied by 14 days. A system of daily entitlement will mean that:
- an instalment of pension can be made up of one or more pension rates, and
- pension variations may be effective from any day in the fortnight.
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Calculation of pension rates
Allowances included in daily entitlement
Rent assistance, pension supplement, and remote area allowance are added into the pension rate calculation before it is converted into daily entitlement. This means that these allowances and supplements are treated as a component of the rate of service pension or ISS and are thus paid at a daily rate.
Example of daily entitlement and allowances
A single pensioner receiving service pension and rent assistance is eligible and payable for only four days out of a pension period. He will receive only four days worth of rent assistance as part of his service pension daily rates.
Exception - Pension Supplement Minimum Amount
If a person is only eligible and payable for three days of the pension period they will receive three days worth of pension supplement as part of their daily rate.
However, if a person's full 14 day instalment of service pension is less than the fortnightly minimum amount of pension supplement, their instalment of pension will be rounded up to equal the fortnightly minimum amount of pension supplement.
Example - Pension Supplement Minimum Amount
A single pensioner receives SP only. The sum of the daily rates of service pension for an entire pension period is $2.90. This would be rounded up to $30.20, i.e. the minimum amount of pension an SP only pensioner can receive is the fortnightly minimum amount of pension supplement.