B56/1992 BUDGET #92 INITIATIVE: TO INCREASE REMOTE AREA ALLOWANCE WEF 7 JANUARY 1993

DATE OF ISSUE: 17 December 1992

BUDGET #92 INITIATIVE: TO INCREASE REMOTE AREA ALLOWANCE WEF 7 JANUARY 1993

The purpose of this Departmental Instruction (DI) is to provide background information concerning the Budget 1992 initiative to increase the basic rate of remote area allowance (RAA) with effect from 7 January 1993.

2.This DI should be read in conjunction with DI B53/92, dated 27/11/92, which outlines the overall Advice/ADP processing strategy for all changes occurring on 7 January 1993.

BACKGROUND

3.Generally, RAA is paid to a service pensioner whose usual place of residence is situated in a remote area of Australia and who is physically present within that remote area.  However where a service pensioner receiving RAA is temporarily absent from the remote area (but still within Australia) the pensioner will be taken to be physically present in the remote area for the first 8 weeks of temporary absence.

4.The allowance was first introduced in 1984 to help offset the higher than normal costs incurred whilst living in remote areas of Australia.

5.A "remote area" is an area described in paragraph 1 or 2 of Part 1 of Schedule 2 to the Income Tax Assessment Act 1936, and the territories of Cocos (Keeling) and Christmas Islands.  Please refer to the General Orders Service Pension for a detailed list of areas regarded as "remote areas".

CHANGE

6.As part of the 1992 Budget, the Government announced that RAA would be increased with effect from 1 January 1993.  For DVA clients, payment of the increase will occur from

7 January 1993, being the first DVA pension pay-day following the effective date of the decision.

AIM

7.The increase in RAA is in accordance with a simultaneous increase in the base levels of taxation zone rebates which have not been increased since 1 November 1984.  The increase is aimed at restoring the rebates and allowances to their 1984 "real" value.

8.It should be noted that although the rate of  RAA has not varied since 1984 there have been some factors which have compensated clients residing in remote areas to some degree, including improvements to transport and communications as well as dependent child rebates.  Therefore the increases to RAA alone do not reflect an actual return to their 1984 real value.

NEW RATES OF RAA

9.With effect from 7 January 1993 the new rates of RAA are as follows:

(i)$17.50 per fortnight to:

.an unmarried service pensioner;

.a widow/er service pensioner;

.a married service pensioner who is separated other than because of ill-health or infirmity;

.a married service pensioner who is separated due to ill-health;

.a married service pensioner whose spouse is not eligible for remote area allowance under the Social Security Act or similar allowance under the Tuberculosis Act 1948.

(ii)$15.00 per fortnight to any other service pensioner i.e. a pensioner who               is regarded as a member of a couple.

10.It should be noted that there will be no increase to the dependent child allowance which will remain at $7.00 per fortnight for each child.

11.It is also important to note that the increase in RAA is "one off" in nature and is therefore not subject to annual or twice yearly indexation.  Any future increases, as in the present case, need to be considered in the Budget Context.

TARGET POPULATION

12.There are approximately 1200 service pension clients in receipt of RAA.

PROCEDURES

13.As mentioned in paragraph 2, the processing strategy, including advices for this "one off" increase are set out in DI B53/92.

ENQUIRIES

14.Contact Officers for this project are Peta Stevenson, Project Manager, on telephone no. (06) 289-6408 and Oona O'Beirne, Project Officer, on telephone no. (02) 213-7771.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR

BENEFITS