B08/1990 BEREAVEMENT PAYMENTS

DATE OF ISSUE:  02 March 1990

BEREAVEMENT PAYMENTS

BACKGROUND

Prior to the introduction of the new bereavement payments, upon the death of a service pensioner, pension was cancelled from the payday following death. If the deceased pensioner was one of a married couple, then the surviving partner would have been entitled to receive a payment of Special Temporary Allowance (STA).

2.This consisted of 6 fortnightly instalments of pension calculated at the difference between the combined married rate of veteran and spouse, less the survivor's on-going rate of pension.

3.STA included:

-service pension;

-rent assistance;

-additional pension for children;

-guardian's allowance;

-remote area allowance.

4.In both single and married cases, a claim for funeral benefits could also be made. This consisted of a once-only payment of either $20, $40, or up to $550 to assist with meeting the costs of funerals for veterans and their dependants.

5.Announced in the Budget on 15 August 1989 were several major changes to the way in which STA is to be paid and also the abolition of the lesser rates of funeral benefits. It is recognised that the smaller $20 and $40 rates of funeral benefits bear no relationship to the actual costs of a funeral.

6.From 1 January 1990, these funeral benefit payments were abolished and in their place an additional instalment of service pension and allowances is payable. In the case of a single pensioner, this additional instalment of pension is paid to their estate and in the case of a married couple, this effectively means that the surviving partner receives an "STA-type" payment - to be known as a Bereavement Payment - covering 7 paydays instead of 6 paydays.

7.As with STA , the bereavement payment includes service pension, rent assistance, additional pension for children, guardian's allowance and remote area allowance.

8.An important reason for these changes is to allow the surviving pensioner of a married couple immediate access to their partner's pension and therefore avoid unnecessary additional stress and worry at a time of bereavement. The new arrangements also reduce the incidence of overpayments and the associated intrusion involved in recovery.

CHANGES

Service pension eligibility for single pensioners extended.

9.For those single service pensioners who die on or after 1 January 1990, service pension will no longer be cancelled from the payday following death, but from the second payday after death. This will result in an additional payment being made, which will take the place of the $20 or $40 funeral benefit. In this way, it effectively targets the estates of those pensioners in most need.

10.This additional instalment of pension will be paid to the estate of all single pensioners, whereas the funeral benefit was only payable in respect of those pensioners eligible for fringe benefits.

11.The provision to lodge an application for the $550 funeral benefit up to 12 months after the death of the pensioner still applies. Also, for those who die before 1 January 1990, the $20 and $40 funeral benefit will still be payable, even if the claim is lodged up to 12 months after the date of death.

12.Where the deceased's account is closed and any additional instalments of service pension and allowances payable after death are returned, then they must be reissued to the deceased's estate. Financial institutions have been made aware of the new bereavement entitlements and should therefore co-operate and not automatically return these pension instalments. Should any problems arise when dealing with financial institutions and a copy of the letter sent to the Australian Bankers' Association by DSS (and including references to DVA) is required, this may be obtained from Gwen Stronach of the Victoria Branch Office.

Service Pension bereavement payments for survivor of a married couple.

13.Upon the death of one partner of a married couple, the survivor is entitled to receive a lump sum payment equivalent to 7 instalments of the difference between the combined married rate and the rate actually paid to the survivor. As with single pensioners, the increase from 6 instalments (old STA) to 7 instalments, reflects the amount payable in lieu of funeral benefits.

Disability Pension bereavement payment.

14.Service pension examiners may also be required to process death cases where both service pension and disability pension were payable. It is therefore important to know that from 19 December 1989 (being the date of Royal Assent), there will also be a bereavement payment payable in respect of disability pension. This bereavement payment is payable for the period of12 weeks after death to the widow/widower of a deceased veteran or female veteran in receipt of disability pension.

15.It is intended, as far as practicable, to also pay this bereavement payment in a lump sum.

Death Registration Form.

16.At Attachment "A" is a suggested Death Registration Form which should be completed by the Death Registration clerks and other clerks recording details of the death of a pensioner. Some of the details contained on this form deal with establishing whether or not the deceased pensioner has a spouse - required primarily for DP only cases, where this is not always apparent.

Death Extraction Advices.

17.When raising a Death Extraction Advice (DEA), staff should be aware of these new provisions and ensure that pension instalments are extracted according to the type of case involved.

EXAMPLE

DP only - married veteran: no extraction during bereavement period.

-single veteran: extract from payday after death.

-married spouse or wife/widow: extract from payday after death.

War Widow - extract from payday after death.

SP only - single veteran or spouse: extraction from 2nd payday after death.

-married veteran or spouse: no extraction during bereavement period.

SP/DP - married veteran: no extraction during bereavement period; limitation of DP portion.

-single veteran:extraction from 2nd payday after death; if possible, limitation of DP portion of 1st instalment.

-married spouse: no extraction during bereavement period; limitation of DP portion.

-single spouse: extraction from 2nd payday after death; if possible, limitation of spouse's DP portion.

NB/ It should be remembered that overpayments of less than $50 are automatically waived due to the administrative costs of recovering such a small amount. This fact should be considered when deciding whether or not to extract whole instalments of pension paid after death.

"Ownership" of deceased's partner's pension instalments.

18.Prior to 1 January 1990, any instalments of the deceased partner's pension that were paid out after death were considered overpayments and therefore recovered - often from the survivor's STA.

19.Under the new provisions, any of the deceased partner's instalments paid out after death (to a maximum of the total value of the assessed bereavement payment) become the property of the surviving spouse. Assuming there is no known reason why the spouse would not have access to those instalments, the lump sum bereavement payment will be reduced accordingly.

20.Where the surviving spouse advises of problems in accessing their partner's instalments, then a manual payment should be made to the survivor and the original recovered from the institution holding the payment.

21.Where payments are made by cheque, the survivor may not be able to cash those in their deceased partner's name. Also, where payment is made directly to a nursing home, etc., it is highly unlikely to be transferred to the surviving spouse. It must therefore be assumed when calculating bereavement payments, that such payments have not been accessed by the survivor.

22.Section 57A(11) of the VEA states that where the deceased partner's service pension instalments are paid into a financial institution, the surviving spouse should be given access to such pension. Provision has been made in this section to indemnify the financial institutions from any further claim or legal action from the Department or the estate, etc.

23.Sections 98A(5) of the VEA and Section 24B(5) of the SWPAA contain the same provisions in respect of disability pensioners.

NB/ Banking Industry Associations have been advised in writing of these requirements. There has been no negative reaction as yet, but some problems may arise with individual banks, etc. once pensioners begin trying to access their deceased spouse's pension. This aspect will be monitored and further negotiations made if necessary.

24.To assist with this process of allowing the survivor access to the deceased's pension instalments, a stock letter should be sent with the other initial advices to the widow/widower as proof of right of access. A suggested format for such a letter is at Attachment "B".

Calculation of DP bereavement payment for widow/widower.

25.Upon the death of a veteran, the widow(er) is entitled to receive a lump sum bereavement payment calculated at:

|the rate of disability pension that would have been

6  x|payable to the veteran on the next available payday,

|if the veteran had not died;

less — the $ value of any instalments already released.

26.This is restricted to a maximum of 100% of the general rate, therefore the widow of a veteran in receipt of TPI rate pension would receive a bereavement payment equal to:

(6 x 100% rate) - $ value of payments released.

27.Also the disability pension referred to above includes those allowances listed in section 27 of the VEA, but the combined total of disability pension plus section 27 allowance must not exceed the value of 100% of the general rate. This further clarifies paragraph 23 in Departmental Instruction 42/89.

NB/ There is no restriction on bereavement payment being paid in conjunction with War Widows' Pension.

Calculation of SP Bereavement Payment for survivor.

28.Due to the survivor of a married couple being entitled to the deceased partner's service pension instalments paid out after death, the practice of extracting such instalments (up to a maximum of 7 paydays after death) is no longer required in these cases. Instead, the deceased's service pension is to be cancelled and the survivor's pension reassessed from the next available payday.

29.The bereavement payment is then calculated using the formula (as detailed in section 57A(3)(b) of the VEA):

(7 - PPD)  x  (CMR - NR)

The 7 represents the maximum number of bereavement payments payable.

PPD (Pension Pay Days) means the number of pension paydays after the date of death and before the deceased's service pension is cancelled.

CMR (Combined Married Rate) means:

(i)the amount of pension that was payable to the survivor on the payday prior to the first available payday (ie. prior to it being reassessed); plus

(ii)the amount of pension that was paid to the deceased pensioner on the payday prior to the first available payday (ie. prior to it being cancelled).

NR (Nominal Rate) means the amount of pension that would have been payable to the survivor as a widowed person on the payday prior to the first available payday.

NB/ All these must relate to the rate paid or the rate that would have been paid on the same payday.

The VEA describes NR as New Rate, but this may cause some confusion as it may be a rate that is never actually put into payment, hence the term Nominal Rate.

EXAMPLE

20/01/90 — wife died and is survived by a husband (veteran).22/02/90  is the next payday after notification available for action.  Therefore the spouse's pension instalments for 25/1 & 8/2 have been paid out.  On the payday before 22/02/90, each received maximum married rate service pension and rent assistance ($222.70 + $15 pf) - which in most cases should be the rate shown on the PMF, except where there is an indexation rise, or superannuation run, etc. due for the next payday and the PMF has already been updated.

22/02/90 — SP and RA for spouse are cancelled; SP and RA for veteran are reassessed at the single rate to $267.20 and $30 pf.

Bereavement payment is then calculated as:

(7 - 2)  x  ($475.40 - $297.20)

= 5  x  $178.20

=$891.00

Rate change during bereavement period.

30.It should be noted that the calculation of this bereavement payment does not take into account any rate changes due after the date the deceased was last paid.

31.To use the previous example, if there was an indexation rise or any other rate change due on payday 22/02/90, this would not affect the calculation. As previously explained, the rates used (CMR and NR) would be those payable on 8/02/90.

Adjustments to bereavement payment total.

32.The figure of $891.00 calculated in the previous example, may require further adjustment by the Pension Payments/Payment Administration section. In some cases, some of the deceased pensioner's pension instalments may be returned to the Department by a spouse who is unaware of his/her entitlements, a financial institution, etc. The value of such returned instalments must be added to the total bereavement payment.

33.In other cases, the authority may not be processed prior to "cut off" and therefore may not be actioned on the next available payday. If this occurs then the value of the deceased pensioner's instalment that was inadvertently released must be deducted from the total bereavement payment.

34.As with the SP bereavement payment, the lump sum bereavement payment initially calculated for DP purposes may also require adjustment due to instalments being returned, or additional instalments being released due to processing delays.

SP/TPI veteran dies.

35.Where a married SP/TPI veteran dies, the widow will receive War Widows' Pension commencing from the payday following death. For the purpose of calculating the bereavement payment, the widow's and deceased veteran's service pensions should be cancelled from the the next available payday, therefore the widow's NR after this cancellation will equal NIL. The bereavement payment for the remaining bereavement period will then be calculated as for all other cases, ie. using the formula,

(7 - PPD)  x  (CMR - NIL).

NB/ The instalments of both the widow's and the deceased veteran's service pension paid out after death are considered as part of the widow's bereavement payment and not as regular service pension. This therefore allows the widow to receive both War Widows' Pension and service pension at the same time. (Section 42(1)(d) of the VEA does not refer to these payments).

36.Where War Widows' Pension is granted some time after the bereavement period has ended, but backdated to a payday during the bereavement period, then the bereavement payment must be retrospectively recalculated and any amount owing paid to the widow.

Non-taxable status of SP bereavement payments.

37.The Income Tax Assessment Act still defines STA (to be amended to bereavement payment) as being the amount that "would have been paid to the person's spouse if the spouse had not died." But, due to the current practice of reassessing the survivor's service pension rate during the STA period, the STA paid is more accurately defined as (CMR - NR) x 6.

38.Following the commencement of the new bereavement payment arrangements, the total bereavement payment is still a non-taxable payment. Therefore the non-taxable component should simply consist of the amount calculated as a lump sum plus the value of the deceased spouse's pension instalments released after death.

39.There will still be some manual adjustments required to the Tax Database to deduct from the taxable pension total those instalments released after death.

Use of Bereavement Payment Calculation Sheet and Authority.

40.An example of a Bereavement Payment Calculation Sheet and a Bereavement Payment Authority are shown at Attachments "C" and "D" respectively.

41.Attachments "E" and "F" show completed forms for the following example:

06/02/90 — veteran died;

17/02/90 — notification received;

08/03/90 — next available payday for processing, therefore pension instalments released after death: 08/02/90 and 22/02/90.

22/02/90 veteran in receipt of SP $222.70

DP $150.16 (80%);

wife in receipt of      SP $222.70 only.

(combined income of $130 pf - wife's investments).

Upon reassessment on 08/03/90, wife's SP reduced to $197.70 pf (ie. New Rate).

The total SP and DP bereavement payment calculated was $1839.14

When the Authority reached the Pension Payments or Payment Administration section, it missed the "cut off" date and was subsequently not processed until payday 22/03/90.

The total SP and DP bereavement payment actually paid was $1441.28

$550 funeral benefit payable as well as the bereavement payment.

42.Although the $20 and $40 funeral benefit payments will be absorbed into the bereavement payment payable to both single and married service pensioners, the $550 funeral benefit will still be available. This payment is made in respect of veterans who meet the criteria detailed in Section 99 of the VEA.

43.Legislation does not preclude pensioners from receiving both the bereavement payment and the $550 funeral benefit payment where eligible. This has the effect of increasing the amount of pension/benefit payable towards the cost of the funeral.

Separation due to ill-health or respite care.

44.Service pension couples who are separated due to ill-health, or where one or both are in approved respite care, receive the single rate of service pension and may also receive rent assistance.

45.But, for the purpose of calculating the lump sum portion of the bereavement payment, the couple should be reduced to the married rate from the next available payday. The rates used in the calculation should be as if they were paid the married rate from the payday prior to the next available payday (the formula at paragraph 29 refers).

46.Although this means that those instalments of service pension released after death (before pension is reassessed) are paid at the higher rate, it will NOT be necessary to reduce the lump sum bereavement payment by the difference between the single and married rates. Subsection 57A(6) of the VEA states that only those instalments to be included in the lump sum portion of the bereavement payment must be assessed as though a direction under subsection 47(2) or (2A) was NOT in force.

47.Where a single pensioner enters approved respite care, rent assistance may be payable for the period of such respite care. The bereavement payment instalment paid on the payday after death shall include the rent assistance amount as this payment should reflect the amount the veteran would have received on that payday if he or she had not died.

Bereavement Payment payable where applicant dies before pension granted.

48.Where an application is lodged for either SP or DP and the applicant dies before pension is granted, bereavement payment is still payable where it is established that the applicant would have been entitled to receive payment of pension on a payday before the date of death.

49.This also applies to the estate of single service pension applicants being eligible for the additional instalment of service pension after death, but only where the applicant would have been entitled to payment of service pension on a payday before date of death.

Posthumous DP increase.

50.Where a DP veteran dies, his widow receives a bereavement payment calculated at the disability pension rate payable at that time (to a maximum of the 100% rate). If the disability pension rate is subsequently increased - possibly due to the finalisation of a claim lodged before the veteran's death, or due to a successful appeal - then the bereavement payment originally paid to the wife/widow must be recalculated.

51.Any additional bereavement payment owing should be paid directly to the widow, while the arrears of the disability pension increase are paid to the deceased's estate.

EATS and composite cases.

52.Where a veteran receives two disability pensions, one paid by the Australian Government and the other by an overseas authority, eg. Britain or New Zealand, the bereavement payment is only applicable to the Australian assessed rate. Disability pensions from overseas authorities are still cancelled from the payday following death.

53.It is therefore important to ensure that the Australian assessed rate of the disability pension payment is correctly identified. This can be done by checking the Client Record Summary screen (IQ.CR) on the General Inquiries System. The bereavement payment calculation will have no effect on the formulae currently used to assess the EATS, composite and combined disability pension cases.

Survivor's New Rate is greater than the previous Combined Married Rate.

54.As with the old STA provisions, there will be cases where the survivor's nominal rate of service pension is greater than the previous combined married rate. This may occur when the deceased pensioner had a form of income, such as wages, that ceased upon death.

55.In these circumstances, (where notification of the death is received at a time where the first available payday is one of the 7 paydays after death) the new bereavement provisions enable the survivor to receive service pension at a rate at least equal to the single rate. (Section 57A(3)(a) of the VEA refers.) This will mean that eligible veterans (whether male or female), will be paid at the single rate. But, it will also require wife-widows of deceased veterans to be paid at the single rate.

56.This will be done by calculating the rate of service pension payable to a wife-widow at the single rate by using the TRIAL facility on the PIPS system. This simply requires the "WWII" indicator to be changed to "Yes".

57.The wife-widow will actually continue to receive fortnightly instalments of the reassessed married rate of service pension, but the difference between the assessed single rate and the continuing married rate will be paid in a lump sum as a separate payment - known as a Single Rate Adjustment.

EXAMPLE.

Veteran's SP rate:              $ 92.70 pf(Income: wages of $560.00 pf)

Wife's SP rate:              $ 92.70 pf(Income: NIL)

                            ____________

CMR:              $185.40 pf              (as at payday after death)

Veteran died, therefore wife-widow's rate when assessed at the single rate = $267.20 pf (as at payday prior to being reassessed).

It is therefore established that it would be more beneficial to the wife-widow to pay her the single rate of pension, rather than the usual bereavement payment.

58.  The Single Rate Adjustment would be calculated as follows:

(Assuming the reassessment is being done on the 3rd payday after death, ie. 2 instalments released).

$267.20 pf:wife-widow's SP rate if assessed payday after death as a single                             veteran.

-$185.40 pf:less wife-widow's and veteran's SP rate.

____________

$ 81.80 pf

x   2 — being the number of payments made after death at that rate.

____________

=$163.60

THEN,

$267.20 pf:being wife-widow's SP rate if assessed as a single veteran from                             next available payday.

-$222.70 pf:being wife-widow's new SP rate assessed at the married rate from                             next available payday.

____________

$ 44.50 pf

x   5 — multiplied by the number of paydays still remaining within the

bereavement period:

(7 - 2 already paid out after death)

____________

$222.50

+$163.60(from above)

____________

=$386.10 — Single Rate Adjustment.

59.The wife-widow will actually receive her married rate service pension each fortnight and be paid a lump sum of the Single Rate Adjustment. An example of a calculation sheet and an authority are at Attachments "G" and "H".

NB/ The above calculations should also take into account any rate changes due to indexation (as would occur if the wife-widow were in receipt of single rate pension paid normally.)

Where the surviving service pensioner dies during the bereavement period.

60.After notification of the first death, should the survivor die during the bereavement period, the lump sum bereavement payment, which may already have been calculated and paid out, will still be payable. In service pension cases, the partner who died second will also be entitled to the additional instalment of service pension after death.

Where notification is received of both deaths at the same time.

Service pension cases:

61.Should notification of the second death be received at the same time or before the first death, then the bereavement payments are calculated a little differently (as defined in Section 57A(4) of the VEA).

62.The formula used in this instance is basically the same as for a normal case where one of a married couple dies, except that PPD (Pension Pay Days) means the number of pension paydays in the period from the day after the first deceased pensioner's death to and including the day of the "surviving" pensioner's death.

63.This ensures that the pension instalments of the first deceased pensioner are not paid to his/her estate, but are paid to the "surviving" pensioner's estate by including these amounts in the lump sum bereavement payment calculation. The first deceased pensioner's instalments released after the "surviving" pensioner's date of death must therefore be recovered from the first deceased pensioner's estate.

64.Also, the CMR (Combined Married Rate) is:

(i)the amount of service pension that would have been payable to the survivor;

plus

(ii)the amount of service pension that would have been payable to the deceased pensioner;

(if neither pensioner had died) on the payday after the survivor's death.

65.The NR (Nominal Rate) is:

the amount of service pension that would have been payable to the survivor (if he or she had not died) as a widowed person, on the payday after the survivor's death.

Disability pension cases:

66.Should notification of the second death be received at the same time or before the first death, then the bereavement payment is calculated as that detailed in Sections 24B(3) of the SWPAA and 98A(3) of the VEA:

the amount of DP that would have been payable to the veteran on the first available payday after the death of the widow/widower (up to a maximum of 100% of the general rate);

multiplied by 6.

67.If the deaths occurred at the same time (eg. in an accident), the elder spouse is deemed under law to have died first.

68.As there are so few cases where this occurs, the Bereavement Payment Calculation Sheet and Authority could be amended and still used for such cases, rather than adding to the number of forms to be used.

Spouse paid income/asset-tested pension at DSS.

69.As with the old STA provisions, where the veteran is paid at this Department and the spouse at the Department of Social Security (DSS), the department which is paying pension to the survivor will calculate and pay the lump sum bereavement payment. Except, of course, where disability pension bereavement payment is concerned, DVA will handle the calculation and payment, even if the surviving spouse is paid by DSS.

70.In order for DSS to calculate the bereavement payment for the surviving spouse of a deceased veteran, the suggested form at Attachment "I"  should be completed as soon as possible after the death of the veteran and forwarded to the appropriate DSS regional office. (This replaces the previous stock letter D430).Local procedures for liaison with DSS will be the responsibility of individual branch offices.

DSS treatment of the disability pension bereavement payment.

71.The disability pension bereavement payment will be treated as exempt income by DSS. This exclusion will be included in Subsection 3(1)(q) of the Social Security Act.

Transfer of wife/widow to DSS.

72.Where service pension bereavement payment is payable, including in the form of the Single Rate Adjustment, the wife/widow cannot transfer to DSS until the end of the bereavement period. This bereavement period commences on the payday after death and continues for 7 paydays. DSS may grant pension to the wife/widow from their payday after the end of the bereavement period.

73.Although a portion of the bereavement payment is paid in a lump sum, this payment still covers the period ending 7 paydays after death of the pensioner. Section 42 of the VEA, which precludes dual receipt of these pensions, is therefore still applicable.

Bereavement payment not to be paid to a separated spouse.

74.The previous arrangements allowed for payment of STA to be made to more than one person. For example, where a veteran is separated from his legal wife and has a de facto wife. The new bereavement provisions enable only one bereavement payment in respect of a deceased pensioner. This payment should be made to that person with whom the deceased pensioner was living and is defined under Section 35(1)(p) of the VEA as one of a pensioner couple:

"(a)2 service pensioners each of whom is a married person because of being the spouse of the other pensioner;"

75.A married person, as defined in Section 35(6)(f), covers both service and disability pensioners [due to the inclusion of Section 98A(6)] and refers:

"(i)to a person who is legally married to another person and is not living separately and apart from that other person on a permanent basis; or

(ii)to a person who is living, in the case of a man, with a woman as her husband, or, in the case of a woman, with a man as his wife, on a bona fide domestic basis although not legally married to that woman or man (whether or not the person is legally married to another person who is still alive)."

Bereavement payment extended to carers.

76.Prior to the introduction of the new bereavement payments, carers immediately lost eligibility for carers service pension upon the death of the veteran for whom they were providing care. The new bereavement arrangements have been extended to carers to enable them to continue to receive their carers service pension for a period of 14 weeks after the death of the veteran. (Section 57B of the VEA refers).

77.This will not be paid in the form of a lump sum, but will simply be a continuation of carers service pension for another 7 paydays, before cancellation. During this period, the normal income/assets tests apply, therefore there is no restriction on the reassessment of pension rate.

78.This extension of pension entitlement is quite separate from the additional instalment of service pension payable to the estate of a deceased single veteran or the bereavement payment payable to the widow of a deceased married veteran.

79.The purpose of this extension is to allow the carer some time in which to establish eligibility for another form of pension or benefit, or to reorganise domestic and financial affairs.

Bereavement payment extended to cover the death of a child.

80.A further change to the bereavement arrangements is that a form of bereavement payment will be payable to those service pensioners who, due to the death of a dependant child, suffer a reduction in pension rate following the cancellation of any child-related payments. These comprise:

.Additional Pension for Children;

.Guardian's Allowance;

.Rent Assistance (any reduction);

.Remote Area Allowance.

81.This bereavement payment will consist of a lump sum equivalent to 7 fortnights of the cancelled child-related payments. (This does not include any reduced service pension due to the child-deduction being cancelled). Section 57C(2) of the VEA sets out the formula for calculating the bereavement payment as:

PCRP  -  CCRP

PCRP (Previous Child-Related Payments) means the amount that would have been payable during the bereavement period in child-related payments, if the child had not died.

CCRP (Current Child-Related Payments) means the amount (if any) of child-related payments that are, after the child's death, payable during the bereavement period.

82.It should be noted that, unlike the other lump sum bereavement payments, the calculation of a child related bereavement payment will have regard to any rate changes that would have occurred if the child had not died.

EXAMPLE.

Child aged 12 dies on 3/01/90(13th birthday: 8/02/90)

Pensioner couple in receipt of:SP $445.40 pf ($222.70 ea)

APC $ 48.00 pf

RA $ 40.00 pf ($20 each)

_____________

TOTAL$533.40 pf.

Next available payday for processing is 25/01/90.

Bereavement Payment Calculation:

PCRP  $48 (APC) + $10 (RA)=$58

- applicable for paydays 11/1 & 25/1/90

CCRP  $nil (APC) + $nil (RA)=$NIL

_______

Bereavement Payment Rate =$58 pf.

multiplied by 2 paydays — x — 2

_______

SUB-TOTAL$116

PCRP  $68.20 (APC) + $10 (RA)=$78.20

- applic for payday 8/02/90 to end of B. period

CCRP  $nil (APC) + $nil (RA)=$NIL

________

Bereavement payment Rate =$78.20

multiplied by 5 paydays — x — 5

________

SUB-TOTAL$391.00

+$116.00

________

$507.00

less child-related payments released after death-              $ 58.00

(11/01/90) ________

LUMP SUM BEREAVEMENT PAYMENT PAYABLE:$449.00

Family Allowance paid by DSS.

83.Where a family was receiving Additional Pension for Children (APC) in respect of the deceased child, then DSS will pay a similar lump sum bereavement payment for Family Allowance. It is therefore necessary in such cases, to advise DSS as soon as possible of the fact that DVA is intending to pay a bereavement payment which includes an APC component, so that their Family Allowance payment can be made without delay.

84.The reason why DSS will only pay Family Allowance bereavement payment when APC was payable in respect of the deceased child, rather than to all Family Allowance recipients, is because those families in receipt of APC would be considered low income families and would therefore have more need for financial assistance with the cost of a funeral.

85.A suggested proforma for advising DSS of the death of a child where APC was payable is at Attachment "J".

METHOD OF PAYMENT.

86.It will be left to each State to decide on the most efficient method of payment to suit their local procedures. But, the overriding consideration should be the client and ultimately payment of the lump sum bereavement payment should be made in the most expedient manner. This should remain flexible to suit the occasions where the widow(er) requests payment in a particular form, ie. by direct credit instead of by cheque, or vice versa.

OVERPAYMENT RECOVERY.

87.Section 205(4) of the VEA has been omitted and replaced with Section 57A(10). This has basically removed the provision that disallowed direct recovery of an overpaid pension instalment, paid after death into a joint account, where it can otherwise be recovered from STA.

88 In its place, Section 57A(10) states that where pension instalments are paid out after death, except where this amount exceeds the total bereavement payment payable, these are not recoverable from the surviving spouse or personal representative, but the bereavement payment is reduced accordingly.

89.Although this section of the VEA indemnifies financial institutions against any claim or demand by the Commonwealth, this only covers those payments to which the survivor is entitled.

ADVICES.

90.Naturally, as a result of these new bereavement measures, the current advices sent out following the death of a pensioner must be updated. As each Branch Office has their own stock letters, this should become the responsibility of each branch and may also be covered under the new Benefits Advices.

91.Debbie Fitzgerald from the Brisbane branch (in consultation with Mark Molloy) is currently working on a "handout" that can be issued to pensioners to answer many queries regarding bereavement payments.

PUBLICITY.

92.The Department of Social Security will cover DVA bereavement payment measures in their Age Pension News publication, as well as in letters to Banking Industry Associations, Funeral Industry and Public Trustee Offices. A pamphlet and information folder is also being prepared by Mark Molloy's team in Central Office.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR

BENEFITS PROGRAM