C21/1999 Social Security Bereavement Payment Retrospective Reassessment of Age Pension

Purpose of instruction

The purpose of this instruction is to provide procedural guidelines and advice relating to retrospective reassessment during a bereavement period for certain age pensioners.  These instructions are supplementary to Departmental Instruction C32/97, “1996/97 Budget Initiative: DVA To Pay DSS Age Pension to Disability Pensioners”.

Excess Payment Rules

DI C32/97, published 18 June 1997, focussed on social security age pension rules that differed from the rules under the Veterans' Entitlements Act 1986 (VEA).

The bereavement payment rules that apply under both the Social Security Act 1991 (SSA) and the Veterans' Entitlements Act 1986 (VEA) generally result in the same amount payable to the surviving partner during the bereavement period.  There is however, a difference in the policy between the two Departments in the case of retrospective reassessment that occurs within the bereavement period.  In the case of age pension, DVA as agent is obliged to follow the Department of Family and Community Services (DFaCS) policy guidelines

Circumstances that may be affected by these rules include:

• where a retrospective grant of war widow pension has occurred; or

• the grant of ISS is not automatic on death notification; or

• retrospective grant or increase to disability pension; or

• overpayment or underpayment of pension.

Grant of war widow pension is the most common cause of such reassessments.

Age Pension Death Processing where ISS is granted

It should be noted that bereavement payment procedures in circumstances where a war widow/er who was receiving age pension paid by DVA is automatically transferred to ISS on the death of their partner is straight forward.  This occurs when it is clear that the person satisfies one of the basic criteria for ISS.

The procedures to follow are the same as for transfer from partner service pension to ISS.

BP Procedures

Relating to Excess Payments

The SSA allows for retrospective reassessment of pension during the bereavement period.  Pension can therefore be retrospectively increased, cancelled or reduced based on the income or assets tests or other circumstances.

The rules that apply to bereavement payment differ depending on whether the bereavement payment is paid:

• as pension payments to the deceased throughout or during part of the bereavement period; or

• as a lump sum.

DFaCS policy if a retrospective reassessment of pension is required is that the bereavement payment already paid will not be readjusted.

SSA BP Continuation Period

In cases where late notification of the death has occurred and pension payments to the deceased continue throughout or during part of the bereavement period, the deceased's pension is treated as bereavement payment during the bereavement rate continuation period, section 83 refers.  At the same time, the surviving partner continues to receive the same rate of pension received prior to their partner's death.

When this occurs, retrospective reassessment of the surviving partner's pension can still arise.  However, there is no complementary retrospective adjustment to the bereavement payment made. ie. deceased persons pension.

In cases where the age pension is completely cancelled, for example when grant of income support supplement is made, the person will receive income support supplement up to the ceiling rate (a maximum of $120.10 per fortnight) from the date of cancellation.  Effectively, the combined pension and bereavement payment received for the period is not equivalent to the combined rate that both partners were receiving prior to death.

There may however, be occasions where an increase in age pension occurs retrospectively during the bereavement payment.  In this situation, the rule not to adjust the bereavement payment may be advantageous to the pensioner.

Lump Sum

S84 of SSA

In cases where the notification of death has been received shortly after death the pension is reassessed to the standard rate.  The lump sum bereavement payment payable is equivalent to 7 fortnights of the difference between:

• the combined pension that the two partners received immediately prior to death; and

• the standard rate payable to the surviving partner.

While retrospective reassessment of the survivor's pension may occur, the bereavement payment already received should not be adjusted.

Combination pension continuation period and lump sum

In cases where some installments of pension have been paid to the deceased partner following death a combination of bereavement payment paid as installment and lump sum occurs.

The same principle that the social security bereavement payments should not be included in any retrospective recalculation still applies.

Conclusion

Retrospective reassessment of income support paid under the VEA during the bereavement period is generally more generous than similar assessments under the SSA.  Retrospective increase or reduction in social security age pension to the survivor may occur however the amount of bereavement payment initially paid should not be altered.

Authorised by

R J HAY

BRANCH HEAD

INCOME SUPPORT