C30/2007 Changes to assets test hardship provisions and assessment of loan value

Purpose

The purpose of this Instruction is to provide information about changes to the assets test hardship provisions and assessment of loan value.

The Repatriation Commission recently agreed that the readily available funds limits in the assets test hardship provisions be increased to the current maximum rate of service pension. As at 20 September 2007, these rates are as follows:

Not a member of a couple: maximum single annual rate of service pension

= $13,980

A member of a couple: maximum combined annual rate of service pension

= $23,353

The Commission also agreed that a reduced asset value of a failed loan will be determined from when a creditor's meeting has decided on liquidation of the deed. Income support payment will then be able to be re-assessed back to the date when the company was placed in administration, as long as this date is not more than 6 months before the pensioner applied to access the financial hardship rules. Any arrears can then be paid if necessary.

Purpose continued

Appropriate changes have been made to the following references in the CLIK policy library:

• Part 3/Chapter 10/Section 5 – Determining Severe Financial Hardship - Readily Available Funds,
• Part 3/Chapter 10/Section 5 – Differentiating between Temporary and Long term Severe Financial Hardship, and
• Part 10/Chapter 2/Section 4 – Assessing Failed Loans and Debts.

Fact Sheet IS117 Financial Hardship has also been updated to reflect these changes.

Contact officer

Any queries about this Instruction or clarification on this issue should be directed to Nat Policy Advisings Income Support.