C57/1997 REMOVAL OF 'SAVED' FRINGE BENEFITS FROM 1 DECEMBER 1997 - (RATIONALISE PENSIONER CONCESSION CARDS)

Purpose

This instruction provides advice on the 1996/97 Budget Initiative to remove 'saved' fringe benefits.

Background

In 1991, deeming provisions were introduced into the VEA.  At that time, a savings provision was also introduced to enable pensioners who would have lost entitlement to fringe benefits as a result of the new deeming provisions, to retain that entitlement under certain circumstances.

In 1992, the number of pensioners with 'saved' fringe benefits was reduced significantly as entitlement to fringe benefits was extended to all pensioners in receipt of a service pension.  However, a small number of pensioners not in receipt of a service pension (due to income and assets in excess) continued to be eligible for fringe benefits under the savings provision.

In the 96/97 Budget, the Government announced that the savings provision that entitles the remainder of these pensioners to fringe benefits would be removed.

Rationale

The rationale behind this initiative is that pensioners who currently have 'saved' fringe benefits are in a more advantageous position than others in a similar financial situation.  It is fair that these pensioners now be brought under the same arrangements that apply to others.

Legislative Amendments

Amendments have been made to the Veterans' Affairs Legislation Amendment Act 1992, Veterans' Entitlements Act 1986, and the Veterans' Entitlements (Rewrite) Transition Act 1991.  The commencement date for this initiative is 1 December 1997.

Pensioners affected

At the time of costing this initiative, it was thought that there were approximately 200 pensioners nationally with 'saved' fringe benefits.  However, after further investigation, it appears that there are very few, if any, 'saved' fringe benefit cases remaining.  The system is unable to identify the exact number of pensioners who are affected.

Issuing of fringe benefits to 'saved' pensioners

The issuing of PCCs to pensioners with 'saved' fringe benefits has been a manual exercise performed by the State Offices during the annual bulk mailout.  Only pensioners who are receipt of a pension are automatically issued with a PCC at the time of the bulk run.

State Offices have advised however, that manual issues have not been made for a number of years.

No further action to 'saved' fringe benefits pensioners

No action will be taken to advise pensioners that they will be losing 'saved' fringe benefits for the following reasons:

• pensioners with 'saved' fringe benefits cannot be identified by the system;
• there are very few, if any, pensioners remaining with 'saved' fringe benefits; and
• a PCC has not been issued to pensioners with 'saved' fringe benefits for some time.

No State Office action required

No action is required by the State Offices.  State Offices should be aware, however, that they may receive a small number of enquiries from previous 'saved' fringe benefit pensioners after this year's bulk PCC run in November.

Pensioners should be advised that they are no longer eligible to receive a PCC.  Pensioners can also be advised that they may reapply for the pension, or if they are not entitled to any amount of pension they may test their eligibility for a Commonwealth Seniors Health Card.

DSS approach

The Department of Social Security has also experienced difficulties in identifying pensioners with 'saved' fringe benefits and will not be writing out to their clients.  They will be ensuring that PCCs are not issued in the bulk run and will deal with enquiries at that time.

Contact Officer

The contact for this initiative is Ric Moore (02) 6289 4707