Purpose

The purpose of this Departmental Instruction is to provide background information and procedural guidelines for the 1996/97 Budget initiative to rationalise income support carer pensions by transferring responsibility for all carer payments to the Commonwealth Service Delivery Agency, Centrelink.

2. Effective Date

This initiative is effective from 11 December 1997.

3. History of DVA carer pensions

• Prior to November 1989, carer service pension (CSP) was only available to the relative of a severely handicapped veteran pensioner.
• The Veterans' Entitlement Act 1986 (VEA) was then amended to extend eligibility to any carer who provided the required level of care.
• From 26 June 1992 a legislative amendment allowed a carer to live either in the home of the veteran or adjacent to it.  Prior to this date a carer had to reside in the veteran's home.
• From 20 March 1995 with the introduction of income support supplement (ISS) for war widow(er)s, a carer stream of ISS was also introduced for those war widow(er)s caring for a severely handicapped person.
• On 20 March 1996 eligibility for CSP was extended to carers of non-pensioner severely handicapped veterans provided the non-pensioner met the minimum family payment income and assets test.
• Also from 20 March 1996 the carer became eligible for a transitional payment of up to 14 weeks following the admission of the caree to permanent institutional care.
• From 4 July 1996 the need for the carer to live adjacent to the caree was removed.

4. Rationale for transfer

At the time of the Budget announcement, DVA provided a carer pension to approximately 100 carers.  The majority of these carers are relatives, as partners of veterans are generally in receipt of partner service pension (PSP).  Centrelink in comparison provides carer payment to over 15,000 clients.

With a small carer population, DVA provides duplication of services to a non-veteran client group and reduced efficiencies in providing this service include:

• manual processing of carer pensions; and
• administration, legislation and policy implementation requiring a high level of inputs versus outputs for a small client group

5. Legislation

The amendments to the VEA were introduced in Veterans' Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997.

6. On-line instructions issued

Procedural guidelines below were issued throughout the transfer process as On-line instructions.

1. On-Line 13 Comp 5 (11/4/97): Review of Carer Service Pensioners Prior to Transfer to DSS.
2. On-Line 16 Comp 2 (25/4/97): Transfer of Carer Service Pensioners to DSS.
3. On-Line 20 Comp 2 (23/5/97): Half Payment and Cancellation of Carer Service Pension Prior to Transfer to DSS.
4. On-Line:  Voluntary Transfer of Carers to DSS Prior to Legislative Changes.
5. On-Line:  Half Payment and Cancellation of Carer Service Pension Prior to Transfer to Centrelink.

7. Carers reviewed

Prior to transfer, State Offices ensured that the personal care and financial information for all transferring carers had been reviewed within the previous 12 months.  On-Line 13 Comp 5 refers.

Details were updated where necessary and any changes to pensioner's payments notified.

8. Transferring carers identified

Transitional provisions for some carers who would have been financially disadvantaged or inconvenienced by transfer were included in the legislation.  These carers were identified as 'saved' cases.

All other carers were transferred.

9. Half payment of pension and cancellation procedure

Because Centrelink carer payment paydays are on alternate weeks to DVA pension paydays, it was necessary to pay a half instalment of pension to the transferring pensioners prior to their DVA pension being cancelled from, 11 December 1997.

10. Deductions from pensions

Any deductions from pension, such as lump sum advance, income tax or overpayment recovery, were identified and treated as required.

11. Payment procedure

All carers receiving bereavement payment or transition payment prior to transfer continued to receive manual payment from DVA until the end of the bereavement/transition period.  At this time they were to be advised of the cancellation of their payment and their options for applying for other pensions or benefits from Centrelink.

12. Payment procedure

From 11 December 1997, there can be no further grants of CSP or carer ISS.

For claims lodged with a date of claim prior to 11 December 1997, if:

1. the claimant falls within one of the 'saved' categories, the claim must be processed and granted where eligible and the claimant becomes a 'saved' carer; or
2. the claimant does not fall within one of the 'saved' categories, the claimant should be encouraged to claim directly from Centrelink as their pension payment will have to be transferred.  Where a new claim is granted by DVA, the NO Project team should be contacted as Centrelink will have to be informed and the transfer arranged.

Any carer claim lodged with a date after 11 December 1997 cannot be granted.  These claims should be forwarded to Centrelink as an 'initial incorrect claim' and the claimant advised.

13. Three (3) categories of saved cases

The table below outlines the 3 categories of 'saved' cases and provides the rationale for the savings provisions:

Category of Carer

Reasons for 'saving' Carer

1. carer service pensioners caring for their veteran service pensioner partner

• will be eligible for PSP on reaching 50 years;
• minimise unnecessary disruption by transferring to one Department and then transferring back;
• policy commitment that there would be no losers [some affected by DSS income rules regarding disability pension (DP)].

2. income support supplement carers

• these carers all transferred from DSS to DVA in March 1995 and have therefore indicated their preference to receive their pension from DVA;
• will all be eligible to receive ISS on reaching 56 years (age equalisation applies);
• minimise unnecessary disruption by transferring to one Department and then transferring back.

3. carer service pensioners caring for their non-pensioner veteran partner

• policy commitment that there would be no losers (affected by DSS income rules regarding DP);
• as partners of T&PI veterans, all will eventually be eligible for ISS if they survive the veteran.

14. Saved carers continue as manual payments

At the transfer date, “saved” carers should continue to be recorded as they are currently.

In order to minimise the ongoing workload for the saved carers and have the ability to monitor them, system changes have been requested to enable carers to be automatically processed and have their own “saved carer” flag.  However, these system changes will not be completed by the time of transfer.

A separate advice will be issued with procedural guidelines when the system changes are available.

15. Continuing care obligations

Until such time as the 'saved' carer becomes eligible to receive and is transferred to another DVA pension, the carer has a continuing obligation to provide constant care to the caree.  The carer's obligation to inform DVA of any change in their circumstances also remains unchanged.

16. Partners of service pension veterans

On or near to the partner's 50 — th birthday, use Pension Transfer Claim form D554 in conjunction with the sample standard letter at Attachment A to transfer the carer to PSP.

17. ISS carers

On or near the pensioner's 56 — th birthday (N.B. age equalisation applies), the carer should be informed that their pension will now be paid on age grounds and that they will no longer have to pass a constant care test.  A sample standard letter is at Attachment B.  This is an automatic transfer and the pensioner will not be required to complete a claim form.

18. Partners of non-pensioner veterans

All this group are partners of veterans receiving DP at the special rate (T&PI).

1.            If the veteran dies, the partner will automatically be granted a war widow(er) pension.  The war widow(er) may also be eligible to apply for ISS.  As a carer service pensioner rather than a partner service pensioner, the grant or issue of claim forms for ISS is not automatic and appropriate claim forms should be forwarded to the war widow(er).  A sample standard letter is at Attachment C.

(ii) As long as the partner continues to provide constant care to the severely handicapped veteran and continues to meet other eligibility criteria, the partner will continue to be saved.

19. Changes to carer provisions in SSA

From 1 July 1997, Social Security Legislation Amendment (Budget and Other Measures) Act 1996 introduced amendments to the carer provisions of the Social Security Act 1991 (SSA).

These amendments are:

1. change of name of pension for carers in the SSA from carer pension to carer payment;
2. changes to provisions relating to the period during which a person may cease to provide care without losing eligibility for carer service pension or carer income support supplement; and
3. correct a technical deficiency that was preventing bereavement payments being paid to carers upon the death of their non-pensioner partner for whom they were caring.

20.  VEA carer provisions also amended

Consequential amendments to the VEA reflecting these changes have been incorporated into the Veterans' Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997.

For full details and procedural guidelines, refer to Departmental Instruction

C59-97.

21. Other changes

When any future changes to the SSA carer payment provisions are introduced you will be advised of any implications for the 'saved' groups of carers.

22. Advices

There will be no changes to advices as a result of this initiative.  Saved carers will continue to be manual payments and normal advice procedures will apply.

The sample standard letters attached at the end of this instruction will be incorporated into the Standard Letter System.

23. Delegations

There will be no changes to delegations as a result of this initiative.

24. Attachments

Attachment A:

• Standard letter for use with Pension Transfer Claim D554 for a carer service pensioner who is about to turn 50 years and will be eligible for PSP.

Attachment B:

• Standard letter for transfer of ISS carer to ISS age when war widow(er) reaches pension age.

Attachment C:

• Standard letter for use with ISS claim form where the non-pensioner veteran caree has died and the partner carer is an eligible war widow(er).

25. Contact officers

Any questions regarding this DI should be directed to:

Robyn Del Casale — Assistant Director — Phone: (08) 8290 0321

FAX: (08) 8290 0232

(LAN: Del Casale Robyn)

Kathi Ashman — Project Officer — Phone: (08) 8290 0237

(LAN: Ashman Kathi)