DATE OF ISSUE:  25 JANUARY 1996

LIMIT MEMBERS OF A COUPLE TO TH PARTNERED RATE*

*Note : This initiative is an extension of the partner initiative to retain eligibility for partners when the veteran ceases to be paid.

INTRODUCTION

The purpose of this Departmental Instruction is to provide procedural guidelines and background information on the 1995/96 Budget initiative to limit partnered service pensioners to the partnered rate.

BACKGROUND

2.Currently if a veteran is a member of a couple and the veteran's partner is not receiving a service pension, income support supplement or social security pension or benefit, the veteran can receive the single rate of service pension.

3.The rate is calculated using the couple's combined income/assets.  However, the veteran's rate of service pension cannot exceed twice the partnered (married) rate at which service pension would be paid to the veteran if the partner was receiving a service pension, income support supplement or social security pension or benefit.  These are known as Method of Assessment (MOA) 04.

4.Under the changes to the partner provisions announced in the 1995-96 Budget, the rate of service pension for a member of a couple will be limited to the partnered (married) rate even though only one member is eligible for, or chooses to receive, an income support pension.

5.These changes apply to all types of service pension (ie Age, Invalidity, Partner & Carer) or income support supplement paid by DVA.  Therefore, effective from 1 October 1995, any new assessment where a person is a member of a couple will be calculated on combined income and the partnered rates will apply.

6.Cases currently in payment under an MOA-04 will be saved from the impact of this change.

RATIONALE

7.As part of the wider initiatives affecting PSP eligibility, this change is designed in part to ensure that DVA meet its obligation for equitable treatment of its clients by treating all members of a couple in the same way.

8.It ensures parity with the DSS payment rate, particularly in regard to the 1994 Budget initiative affecting the treatment of compensation for loss of income.  At present, where one member of a couple at DSS is not affected by compensation but the partner is, payment is made at the lower partnered rate.  DVA currently pays the higher single rate to the pensioner not affected by the compensation payment.

LEGISLATION

9.The amendments to the VEA were introduced in the Veterans' Affairs (1995/96 Budget Measures) Legislation Amendment Act 1995.  Royal Assent was received on 14 November 1995, giving a commencement date of 1 October 1995.

See Attachment A for a summary of the legislative amendments relating to this initiative.

EFFECT OF DELAY IN ROYAL ASSENT

10.A memorandum detailing instructions for processing impacted cases between the commencement date of these amendments and the date of Royal Assent was forwarded to the State Offices.  (Included in 'On-Line' 34/COMP3; 20/10/95.  See Attachment B).

RELATED LEGISLATION

11.Three related amendments were introduced as part of the same amending Act:

• extension of eligibility to certain partners of veterans and deceased veterans (DI C02/96 refers);

• a minimum age requirement of 50 years for PSP eligibility (DI C05/96 refers); and

• ability to retain PSP eligibility in certain circumstances if the veteran ceases to be paid (DI C03/96 refers).

POLICY CHANGES / PROCEDURAL GUIDELINES

Rate of Service Pension

12.With effect from 1 October 1995, a person who is a member of a couple where only one partner receives service pension will be paid pension at the partnered rate.

Savings Provisions: Overview

13.A savings provision will protect existing recipients of the current MOA-04 (Partnered, partner getting neither pension nor benefit) rate.  The rate of service pension paid to these recipients at 1 October 1995 will be their original saved rate.

14.The savings provisions will operate so that reductions in service pension, as a result of a change in a person's circumstances, will progressively reduce the original saved service pension rate to a new saved rate.

15.However, potential increases in SP as a result of a change in a person's circumstances, or as the result of indexation or other increases in any component of the person's service pension, will not increase the saved service pension rate.  This applies whether the person's saved rate is the original saved rate or a new saved rate.

16.These increases will be offset against the excess pension being received under the MOA-04 (the saved service pension).  While the saved service pension rate is higher than the partnered assessed rate, the savings provisions will continue to apply.

17.When the excess is eliminated (ie when the saved rate equals the rate assessed under the partner rules), the person's service pension will cease to be saved and will then be calculated like any other partnered assessment.

Savings Provisions Cease

18.These savings provisions will also cease to apply to the person if:

• their service pension is cancelled; or

• they cease to be a member of a couple; or

• their partner begins to receive a service pension, an income support supplement or a social security pension/benefit.

19.For examples of how the savings provisions will operate see Attachment C.

Assessment Procedure for 'Saved' Cases

20.Whenever these cases are reassessed due to changed circumstances or at the time of a statutory increase, the examiner will need to do a trial assessment and compare the assessed rate against the saved rate.  If the trial assessed rate exceeds the saved rate then the cases will cease to be saved and will revert to a normal partnered assessment.

21.A worksheet has been prepared for use with these cases to enable the comparison between the saved rate and the trial assessed rate.  A copy is at Attachment D.

Identification of Saved Cases / Action Taken Prior to Implementation

22.Prior to the date of commencement, existing cases to be saved were identified and analysed on a State basis.  This analysis revealed a total of 376 MOA-04 cases which were differentiated into 5 categories:

①Cases incorrectly recorded as MOA-04 on the system.

②Cases assessed as MOA-04 but where, on information held, the partner would be eligible and where the combined partnered assessment rate would be more than the MOA-04 rate.

③Cases assessed as MOA-04 but where, on information held, the partner would be eligible and the combined partnered assessment rate would be equal to the MOA-04 rate.

④Cases assessed as MOA-04 but where the combined partnered assessment rate would be less than the MOA-04 rate because either the partner was not eligible or the case involved a disability pensioner or blinded pensioner with high income or assets.

⑤Cases assessed as MOA-04 because the partner's rate is reduced as a result of the effect of the compensation recovery rules and where the combined partnered assessment rate would be less than the MOA-04 rate.

23.On the basis of this analysis, corrective action was recommended to reduce the total number of MOA-04 cases on the system in order to minimise the impact of this initiative.  (Recommendations included in 'On-Line' 24/COMP 4; 11/8/95.  See Attachment E.)  This action involved:

①Elimination of these cases incorrectly recorded on the system.

②An explanatory letter forwarded to the pensioner couple explaining the situation and inviting the partner to lodge a claim for PSP.  Those claims received were processed and the MOA-04 case converted to normal partnered assessment (MOA-01).

③An explanatory letter forwarded to the pensioner couple explaining the situation and inviting the partner to lodge a claim for PSP.  Those claims received were processed and the MOA-04 case converted to normal partnered assessment (MOA-01).  A review of income and asset details was also performed where appropriate.

④i).  For those cases where the partner was ineligible because of residency status, the couple were contacted and advised of the situation.  When the residency criterion was met, the partner was invited to lodge a claim for PSP.  Those claims received were processed and the MOA-04 case converted to normal partnered assessment (MOA-01).  A review of income and asset details was also performed where appropriate.

ii).  The other cases in this category constitute the 'true' MOA-04 assessments.  These pensioners were contacted by telephone with a follow up letter, explaining the changes and, where appropriate, requesting the pensioner to provide up-to-date income and asset details.

⑤Due to the ongoing changes to the implementation of the compensation recovery rules, these cases were not reassessed.  These cases will be the subject of a further Commission submission in the near future.  State Offices will be kept informed of further developments as they occur.

24.Upon completion of this process, information on the remaining MOA-04 cases was collated and forwarded to the State Offices along with recommendations for further action prior to implementation.  A general overview of how the savings provisions would operate was also provided (included in 'On-Line' 29/COMP 4; 15/9/95.  See Attachment F).

25.Recommended action involved transferring all remaining MOA-04 cases onto manual assessment.  All pensioners remaining on the 'saved MOA-04' assessment were contacted by telephone with a follow up letter advising them of the savings provisions which would apply to their service pension.

26.a final follow up was performed to identify any remaining MOA-04 cases on the system.  This information was then forwarded to the State Offices to finalise the treatment of the saved cases.

SYSTEM CHANGES

27.New grants of SP, for members of a couple, with an effective date on or after 1 October 1995 will be at the partnered rate, except for illness separated couples.

28.This initiative will impact on future grants of SP under MOA-04.

29.The existing MOA-04 (Partnered, partner getting neither pension nor benefit) will be saved at the rate of service pension payable as at 1 October 1995 and will have to be recorded as manual rates (PP.MR).

Note:  When calculating the saved rate for the manual assessment, Pharmaceutical Allowance is included.  HOWEVER, as the system will automatically pay the allowance with any service pension paid, the PA must be deleted from the payment rate recorded on the PP MR screen.

30.Old MOA-04 will cease to exist and will be replaced with two new methods of assessment:

1.a new MOA-04 which will determine the service pension payment rate for a veteran member of a couple where the partner is not in receipt of Service Pension, ISS or DSS Pension or Benefit, and will be calculated at the partnered rate;

2.a new MOA-06 which will determine the service pension payment rate for a partner member of a couple where the veteran with Qualifying Service is not in receipt of Service Pension or DSS Pension or Benefit, and will be calculated at the partnered rate.

DELEGATIONS

31.New delegations are not required for this initiative

ADVICES

32.There will be no impact from this initiative on the daily, fortnightly or quarterly advices.

33.A standard letter advising all saved MOA-04 cases of the impact of the initiative and the savings provisions is at Attachment G.

ATTACHMENTS

34.The following attachments are included:

• A  Legislative changes

• B  'On-Line' 34/Comp3: 20/10/95: "Impact re Delay in Royal Assent for Partner Initiatives"

• C  Examples of savings calculations

• D  Worksheet for rate assessment comparison

• E  On-Line 24/Comp4: 11/8/95: "Service Pension Paid At The Standard Rate Calculated On Combined Income (04 Assessment)".

• F  On-Line 29/Comp4: 15/9/95: "Service Pension Paid At The Standard Rate Calculated On Combined Income (04 Assessment) Saved Cases".

• G  Standard Letter for Saved Cases

ENQUIRIES

35.Any question regarding this DI should be directed to the Policy Implementation Unit, South Australia:

Robyn Del Casale — Assistant Director(08) 213 2321(LAN S-B-PI-1)

Sue Burne — Project Officer(08) 213 2656(LAN S-B-PI-2)

Kathi Ashman — Project Officer(08) 213 2409(LAN S-B-PI-3)

W R MAXWELL

A/G DIVISION HEAD

COMPENSATION

   January 1996

ATTACHMENT A

PARTNER INITIATIVES: LEGISLATIVE AMENDMENTS SUMMARY

ITEM	VALAB	Commencement Date
	2(3)	Veterans' Affairs (1995-96 Budget Measures) Legislative Amendment Act 1995: Effective commencement date on 1/10/95.
	VEA	Definitions
10	38(1A)	Defines a disqualifying provision as used in subsection 38(1).
		Application
1	35B(2)	Amends s35B to require people to make a claim if they wish to establish that their veteran partner or their deceased veteran partner had rendered qualifying service.
2	35C(1)(c), 35C(1)(d)	Amends s35C to allow claims by people, or others acting on their behalf,  who want to establish that their veteran partner or deceased veteran partner had rendered qualifying service.
		Eligibility
3	38(1)	Amendment makes this subsection subject to new subsection 38(1B).
4	38(1)(a)(ii)	Amended to protect PSP eligibility from the effects of all disqualifying provisions on the payability of the veteran's service pension.
5	38(1)(aa)	Extends eligibility for PSP to include people who would qualify for an age pension from DSS and who are members of a couple with a veteran who has rendered qualifying service.
6	38(1)(b)(ii)	Amended to protect PSP eligibility for a non-illness separated spouse from the effects of all disqualifying provisions on the payability of the veteran's service pension.
7	38(1)(c)(i)	Amended to delete requirement for the deceased veteran to have been in receipt of a service pension immediately prior to his or her death.
8	38(1)(c)(ia)	Extended to protect PSP eligibility for a widow or widower from the effects of all disqualifying provisions on the payability of the deceased veteran's service pension prior to his or her death.
9	38(1)(e)	Extends eligibility for PSP to include widow/ers who would qualify for an age pension from DSS and who were the partner or spouse of a deceased veteran who had rendered qualifying service.
10	38(1B)	Introduces the 50 year minimum age requirement for PSP where there are no dependent children.
10	38(1C)	Qualifies the application of new subsection 38(1B) to exclude from its operation those people under 50 years with no dependent children who, before the date of commencement (1/10/95) were eligible and had submitted a claim which had not yet been determined, or had already been determined to be eligible and their pension has not been cancelled.
10	38(1D)	Qualifies the application of new subsection 38(1B) to exclude from its operation those people whose partner is a veteran to whom section 24 (Special Rate of Pension) applies.
11	38(3), 38(3A)	Subsequent to item 9, to include its provisions.
		Payability
12 to 59	41(5) 41-B1, 41-C12, 41-D4, 41-D5, 41-F3, 41-F4, 42(4), 42-B1, 42-D12, 42-D16, 42-E4, & E11 42-G3, & G4 43(3), 43-B1	Amendments to these sections change the rate calculators in sections 41, 42, and 43 by deleting all reference to “partnered-partner receiving neither pension nor benefit”, to ensure that all members of a couple are paid at the married rate.
		Savings Provisions
62	197A	Refers to a set of 'savings and transitional provisions' at Schedule 5 designed to protect existing service pensioners who are members of a couple and are paid at the standard rate.
		Schedules
63	Schedule 5	Details how the savings and transitional provisions operate to protect service pensioners in receipt of the higher rate of pension under the category “partnered-partner receiving neither pension nor benefit” from the effect of the above amendments (items 12 to 59) until the cumulative effect of any changes in their circumstances reduces their 'saved' rate of service pension to the partnered rate.

*Note: Item numbers in first column refer to Schedule 4 of the Veterans' Affairs (1995-96 Budget Measures) Legislative Amendment Act 1995, pp27-33.

ATTACHMENT B

O N   L I N E

20/10/95 Item 34/COMP3

TO: DEPUTY COMMISSIONERS ALL STATES

FROM: R J HAY INCOME SUPPORT COMPENSATION

ISSUE: Impact Re delay in Royal Assent for partner initiatives

ACTION:DATE DUE: AS PER MINUTE

NATIONAL OFFICE DIVISION: COMPENSATION DIVISION, INCOME SUPPORT BRANCH

SUBJECT:IMPACT RE DELAY IN ROYAL ASSENT FOR PARTNER INITIATIVES.

Background

As advised in my earlier LAN messages, the Veterans' Affairs (1995-96 Budget Measures) Legislation Amendment Bill 1995 is yet to be introduced into the Senate.  This memo concerns those parts of the Bill which relate to income support initiatives:

①⇩ Minimum age set for certain partner service pension applicants

②⇩ Limit members of a couple to the partnered rate

③⇧ Extension of eligibility to certain partners of veterans and deceased veterans

④⇧ Retention of eligibility when veteran ceases to be paid

⑤⇧ Extension of Commonwealth Seniors Health Card eligibility

⑥⇩ Clarification of qualifying service in regard to Korea for troops based in Japan

⑦⇧ Extension of eligibility for income support supplement to war widow/er spouses of pensioners or supplement recipients

⑧⇧ Recovery of a spouse's overpaid pension from arrears of a veteran's disability pension

Note: ⇧ means the initiative is beneficial.  ⇩ Means not a beneficial initiative.

Action to be taken

2.The delay in passing the Bill has implications for the date of effect of these changes.  Different processes will need to be followed for individual initiatives.

①Current legislation will apply.  That is, claims can be granted for partner service pension even if the partner is under 50 and has no dependent children.

②Current legislation will apply.  The standard rate is payable where only one member of a couple is a pensioner or is claiming pension.  Given that the system changes have already been implemented, staff will need to manually assess any new cases and record them as 'saved' once the legislation takes effect.  Current '04' cases already transferred to manual assessment will continue to be assessed under the pre 1/10/95 rules (ie their rate of pension can be increased or reduced depending on changes in circumstances).

③ & ④Claims can be processed or pension continued under the new rules in anticipation of having the necessary legislative authority in due course.

⑤Claims can be processed (or the card granted automatically when pension is cancelled) under the new rules in anticipation of having the necessary legislative authority in due course.

⑥ & ⑦Current policy will continue to apply.

⑧Current processes continue to apply.

Recording of claims for partner service pension (PSP)

3.From the date the Bill receives Royal Assent, all new measures will apply.  Appropriate action will be initiated to protect any grant of entitlements made between 1 October 1995 and the date the Bill receives Royal Assent.  Further details of this action will be advised when available.

4.Some idea of the number of clients involved will be necessary.  Therefore, any action taken on a case involving a claim for partner service pension or the current '04' assessment type, where there is a "1 October" impact, should be recorded with the file number, for consideration when a decision is being made on what the appropriate action will be.

Follow up

5.I appreciate your assistance and recognise the inconvenience caused by this unavoidable delay.  As soon as any new information is available, you will be advised.  In the interim, if you have any queries please contact:

Robyn Del Casale — Assistant Director(08) 213-2321(LAN S-B-PI-1)

Sue Burne — Project Officer(08) 213-2656(LAN S-B-PI-2)

Kathi Ashman — Project Officer(08) 213-2409(LAN S-B-PI-3)

RJ HAY

BRANCH HEAD

INCOME SUPPORT

ATTACHMENT C

EXAMPLES OF SAVINGS PROVISIONS

A married service pensioner whose partner receives neither pension nor benefit, who has one dependent child and receives rent assistance, and has no other income.

At 28/9/95

Maximum basic rate (MBR) of pension              $335.90

DCAO              $94.10

RA              $79.40

Total payment rate              $509.40  =  Rate of SP

As at 1/10/95

Partnered MBR of pension              $280.20     (“trial” assessment)

Current saved maximum basic rate              $335.90

DCAO              $94.10

RA              $79.40

Total payment rate              $509.40  =  Saved rate

The saved excess equals the difference between the standard 'saved' MBR ($335.90) and the 'trial' partnered assessment rate ($280.20)  =  $55.70.

As at 12/10/95, commences to receive income of $328.00 pf.

Partnered income reduced rate of pension              $239.20  (280.20 - reduction for income)

DCAO              $94.10

RA              $79.40

'Trial' assessment rate              $412.70

'Saved' income reduced rate of pension              $294.90  (335.90 - reduction for income)

DCAO              $94.10

RA              $79.40

Total payment rate              $468.40  = “New” Saved rate

The saved excess equals the difference between the standard 'saved' MBR ($335.90) and the 'trial' partnered assessment rate ($280.20)  =  $55.70.

As at 26/10/95, student child loses eligibility.

Partnered income reduced rate of pension              $239.20

DCAO              $0.00

RA              $72.40

'Trial' assessment rate              $311.60

'Saved' income reduced rate of pension              $294.90

DCAO              0.00

RA              $72.40

Total payment rate              $367.30  =  “New” Saved rate

The saved excess equals the difference between the standard 'saved' MBR ($335.90) and the 'trial' partnered assessment rate ($280.20)  =  $55.70.

As at 9/11/95, income reduces to Nil.

Partnered income reduced rate of pension              $280.20 (Increase of $41.00)

DCAO              $0.00

RA              $72.40

'Trial' assessment rate              $352.60

'Saved' income reduced rate of pension              $294.90

DCAO              $0.00

RA              $72.40

Total payment rate              $367.30 = Saved rate

The saved excess now equals the difference between the standard 'saved' MBR ($335.90) and the 'trial' partnered assessment rate ($280.20) minus the amount the pension has been increased due to loss of income ($41.00)  =  $14.70.

This calculation follows the steps prescribed by the amending legislation.  In effect, the calculation is simply the difference between the saved rate and the current trial assessment rate.

As at March 1996, with SI of, say, 6%.

Partnered income reduced rate of pension              $297.00

DCAO              $0.00

RA              $76.70

'Trial' assessment rate              $373.70

'Saved' income reduced rate of pension              $290.60

DCAO              $0.00

RA              $76.70

Total payment rate              $367.30  =  Saved rate

The saved excess equals the difference between the standard 'saved' MBR ($335.90) and the 'trial' partnered assessment rate ($280.20) minus the amount the pension has been increased due to loss of income ($41.00) minus the amount pension has been increased due to SI increases ($16.80) minus the amount the RA has been increased due to SI increases ($4.30) = less than $NIL.

This calculation follows the steps prescribed by the amending legislation.  In effect, the calculation is simply the difference between the saved rate and the current trial assessment rate.

Normal partnered assessment at this time is greater than the 'saved' rate:

Therefore, this assessment reverts to a normal partnered assessment so is no longer a manual assessment and is no longer 'saved'.

ATTACHMENT D

04 ASSESSMENT/PARTNER RATE COMPARISON SHEET

NAME:FILE NO:FOLIO:

ATTACHMENT E

O N   L I N E

11/08/95 Item 24/COMP4

TO: DEPUTY COMMISSIONERS ALL STATES

FROM: BRANCH HEAD INCOME SUPPORT

ISSUE: SERVICE PENSION PAID AT THE STANDARD RATE CALCULATED ON COMBINED INCOME (04 ASSESSMENT)

Under the changes to partners announced in the 1995-96 Budget, the rate of service pension for a member of a couple will be limited to the partnered (married) rate even though only one member is eligible for, or chooses to receive the pension.  As from 1 October 1995 any new assessment where a person is a member of a couple will be calculated on combined income and the partner rates will apply.  Details are attached.

ACTION:DATE DUE: PROVIDE DETAILS OF CURRENT CASES — 21 AUGUST 1995

Subject:SERVICE PENSION PAID AT THE STANDARD RATE CALCULATED ON COMBINED INCOME (04 ASSESSMENT)

Background

Currently if a veteran is a member of a couple and the veteran's partner is not receiving a service pension or social security pension or benefit the veteran can receive the single rate of service pension.  The rate is calculated using the couple's combined income/assets.  However, the veteran's rate of service pension can not exceed twice the partnered (married) rate at which service pension would be paid to the veteran if the partner was receiving a service pension or social security pension or benefit.  These are known as type '04' assessments.

Budget changes

2.Under the changes to partners announced in the 1995-96 Budget, the rate of service pension for a member of a couple will be limited to the partnered (married) rate even though only one member is eligible for, or chooses to receive the pension.  As from 1 October 1995 any new assessment where a person is a member of a couple will be calculated on combined income and the partner rates will apply.

Cases currently in payment under an '04' assessment will be saved from the impact of this change.  When details of how these cases will be affected has been finalised I will write and advise you.

Current Numbers of '04' Assessments

3.As at 3 July 1995 the following number of '04' assessments were recorded on the system:

NSW129SA27

VIC58WA33

QLD45TAS84

TOTAL376

(A full case listing has been sent to your Income Support Manager under separate cover).

Note:There are also 80 recipients of carer service pension nationally and it is estimated that a significant number of these may be assessed as type '04'.  As with the other type '04' assessments, the cases in payment at 1 October 1995 will be saved.  Any new grants, where the carer is a member of a couple, will be paid at the partnered rate.

Analysis Of Current Cases

4.An analysis of the twenty-seven '04' assessments recorded in South Australia revealed 5 major categories into which these cases can be differentiated:

①incorrectly recorded as type '04', should be type '10';

②assessed as type '04' but it appears that on current information, the partner would qualify for partner service pension and the combined rate of pensions would be more than the type 04' rate currently being paid to the veteran;

③assessed as '04', however if assessed as a member of a couple, the combined partner rate would be the same as the '04' rate paid to the veteran;

④assessed as type '04' and if assessed as a member of a couple, the rate would be less than the veteran is currently receiving as a type '04'; and

⑤currently assessed as '04' because of the effect of the compensation recovery rules and if assessed as a member of a couple under these rules the rate would be less than the veteran is currently receiving as a type '04'.

Recommended Action

5.Based on the outcome of the cases examined in South Australia, it is likely the '04' assessments in the other States are similar.  Clearly some corrective action needs to be taken in anticipation of the Budget changes.  Below is a list of the type of cases which fall into each category with a suggested format for updating or reviewing these cases.

Category ①

6.Cases which fall into category ① are non-illness separated couples where the spouse details are recorded on the Assessment Control (AC) and Personal Assessment (PA) screen.

Action required: The AC screen will need to be updated to exclude partner details.

Category ②

7.Examples of such cases in Category ②are:

• Spouse in receipt of War Widow pension who, when assessed on the latest income/asset details, would receive ISS.  The combined rate of service pension and ISS would be higher than the current rate of service pension paid to the veteran; and

• Partners of veterans where the case has not been recently reviewed and as a result of increases in the rate of pension, the combined rate is higher.

Action recommended: Income/asset details may not have been updated for some time and may need to be clarified.  Refer to para 16 for suggested review action.

Category ③

8.In the category ③ cases, the veteran is currently receiving, more than twice the married rate (ss41(5) and ss42(4) VEA state that the veteran's payment cannot exceed twice the married rate).  This is a system error and changes to the system which will limit payment to no more than twice the married will be in place by 1 October 1995.

Action recommended: The Communications, Operations and Review Section of National Office are currently taking action which will correct the rate of pension paid to these veterans.  You will shortly receive advice in this regard.  However, these cases will still need to be reassessed prior to 1 October 1995 and it is suggested that they be reviewed immediately.  If the partner does not elect to receive payment and complete an SP2 claim form, the rate under the '04' assessment will be reduced to twice the married rate.

Category ④

9.Category ④ cases are the “true” '04' assessments.  These cases, which on current details would be 'saved' at 1 October 1995, will need to be examined to see if they should be reviewed.  Any unrecorded change in circumstances may result in a change in assessment type.

10.The following types were identified in this group:

(a)the partner does not qualify because of the residency requirements;

(b)'blinded' assessments and the combined income/assets prevent the partner from receiving payment;

(c)the partner is a war widow and combined income/assets prevent ISS being paid.

Recommended action for type (a):  Contact immediately to see if  circumstances have changed.  It is important to note that if the partner is under 50 with no dependent children there are other budget changes which will affect them.  They will need to be aware that they must be an 'Australian resident' and have lodged a SP2 claim form by 1 October 1995 to be eligible for partner pension after that date.  These cases therefore need urgent action.

Recommended action for cases identified in (b) &(c): Review as suggested in para 16.  It is likely that these cases will remain as '04' assessments and be saved.  However, the majority have not been reviewed recently and changes to income and assets may result in a change in assessment.

Category ⑤

11.Category ⑤ cases are '04' assessments because of the application of the compensation recovery rules from 1 January 1995.  These cases are subject to further consideration.  Do not reassess these cases as this time.  Further instruction will be issued.

12.The carer service pension '04' assessments should be examined to establish if they need to be reviewed.  If they are '04' because of their income/asset details, they can be reviewed as per para 16.  If they are '04' because the partner is not eligible, they should be reviewed as appropriate.  (It may only be necessary to advise them of the Budget changes and how they will be saved from the impact.)

13.As a result of the examination of cases in South Australia it is likely that there are a number of cases assessed as type '04' that are incorrect or receiving a lower rate under this method of assessment.  As the Budget changes will prevent further grants under the '04' rules and as the number 'saved' will be reducing it is likely that the remaining '04' assessment will require manual action after 1 October 1995.

14.Details of the cases examined in South Australia are at Attachment A and a summary highlighting the various types in each of the five categories is at Attachment B.

Recommended Review Procedure

15.A suggested format for reviewing these cases and establishing the '04' assessments that are likely to be saved could be achieved by a telephone call in the first instance.  Where necessary and possible, current partner status and income/asset details can be obtained while explaining the purpose of the Budget initiative and alleviating unnecessary concern for the pensioner.  Where appropriate (ie where the partner may need to claim for pension) this telephone contact should be followed up with an SP2 form and covering letter.  (Attachment C should be used for cases in categories 2, 3 & 4).

Further analysis

16.Once you have examined your current cases could you please provide details of the following, including the different types that fit into each outcome (similar format to Attachment B):

• the number incorrectly assessed as type '04';

• the number better off on partner rates;

• the number which on current details are likely to be saved; and

• the number where the '04' and partnered rate is the same.

17.Please forward your reply to Sue Burne, Policy Implementation Project Officer, South Australian State Office by COB 21 August 1995.  Her telephone number is (08) 213 2656 and her E-mail address is S-B-PI-2.

MURRAY HARRISON

BRANCH HEAD

INCOME SUPPORT

August 1995

04 ASSESSMENTS

All rates include PA

Number	Details	Current rate & I/A details	New rate for 1/10 95 based on I/A details on file
(1)	Veteran not partnered (delegate decision folio 126).  Details on PA screen include a partner, needs to be updated to exclude partner detail ie type 10 not 04.	V SP - $331.30 incorrectly recorded	V SP - $331.30 incorrectly recorded
(2)	Veteran not partnered(delegate decision folio 49).  Details on PA screen include a partner, needs to be updated to exclude partner detail ie type 10 not 04.	V SP - $331.30 incorrectly recorded	V SP - $331.30 incorrectly recorded
(3)	Wife not receiving any payment.  On current income/asset details both would be receiving maximum married rate.  As this case has not been reviewed since 1990 it is suggested that we follow up if the wife is still overseas.	V SP - $331.30pf P SP - Nil SP - Com.Inc.$12.12pf SP - Com.Ass.$61,818	V SP - $274.60 P SP - $274.60 *Partner rates more beneficial than 04 if the partner has returned to Australia.
(4)	Wife is not an Australian resident.  This may need to be followed up refer folio 142.	V SP - $331.30 P SP - Nil SP - Com.Inc. $0.01 SP - Com.Ass. $35,511	V SP - $274.60 P SP - $274.60 (Kids not included.) *04 assessment is more beneficial because the wife is not eligible under either assessment.
(5)	Wife is not an Australia resident, therefore not eligible until she becomes an Australian resident.	V SP - $331.30 P SP - Nil SP - Com.Inc. $45.57 SP - Com.Ass. $22,200	V SP - $274.60 P SP - Nil *04 assessment. more beneficial as the wife is not eligible under either assess.
(6)	Wife not receiving any payment.  On the current assessment the veteran is receiving more than the combined married rate.	V SP - $54.50 P SP - Nil SP - Com.Inc. $1,164.50 SP - Com.Ass. $15,815	V SP - $24.50 P SP - $24.50 *Partner rate and 04 assessment should be the same.
(7)	Wife not receiving any payment.  On the current assessment the veteran is receiving more than the combined married rate.	V SP - $111.30 P SP - Nil SP Com.Inc. $1,044 SP Com.Ass. $152,762	V SP - $54.60 P SP - $54.60 *Partner rate and 04 assessment should be the same.
(8)	Wife not receiving any payment.  Delegates decision to assess veteran as living in a defacto relationship effective 19/1/95.  Certified letter sent to veteran 4/4/95 with a 15 day requirement to reply.  Suggest we follow up the reply and take appropriate action.	V SP - $228.90 P SP - Nil SP Com.Inc. $768.80 SP Com.Ass. $34,955	V SP - $123.40 P SP - $123.40 *Partner rate more beneficial (current details need to clarified).
(9)	Wife not receiving any payment  Needs to be reviewed.  On current income/asset details veteran is receiving less than what they would receive together on the married rate.	V SP - $113 90 P SP - Nil SP - Com.Inc$1,033.60 SP - Com.Ass$312,500	V SP - $57.20 P SP - $57.20 *Partner rate more beneficial than 04.
(10)	Compensation case. Partner is receiving a 'CAP', under pension age (60 & half).  Compensation ($824.20pf - direct deduction) results in nil payment to the partner.  On 26/3/97 partner will not be in receipt of a 'CAP' and compo will be assessed as ordinary income.	V SP - $331.30pf P SP - Nil SP - Com.Inc. $0.24 SP - Com.Ass. $13,500	V SP - $274.60 P SP - Nil (eligible after 26/3/97) *04 assessment is more beneficial.
(11)	Compensation case.  Partner is receiving a 'CAP', under pension age (61).  Ordinary income test and compensation ($486.60pf - direct deduction) result in nil payment to the partner.  On 7/8/98 partner will not be in receipt of 'CAP' and compo will be assessed as ordinary income.	V SP - $247 40 P SP - Nil SP - Com.Inc. $499.64 SP - Com.Ass. $34,579	V SP - $190.70 P SP - Nil  (eligible after 7/8/98) *04 assessment more beneficial because of other income and direct deduction compo from partners pension.
(12)	Compensation case.  Partner is receiving a 'CAP' under pension age (61.5).  Ordinary income test and compensation ($320.48pf - direct deduction) result in nil payment to partner.  On 30/4/99 partner will not be in receipt of a 'CAP' and compo will be assessed as ordinary income.  Department of Defence compo??? accepted disabilities however no DP in payment 'strange' check with compensation.	V SP - $161.30 P SP - Nil SP - Com.Inc. $823.20pf SP - Com.Ass. $274,500	V SP - $109.80 P SP - Nil  (eligible after 30/4/99) *04 assessment more beneficial because of other income and direct deduction of compo from partner pension.
(13)	Compensation case.  Partner is receiving a 'CAP', under pension age (63&1/2).  Ordinary income test and compensation ($245.06pf) results in nil payment to the partner.  Letter at folio 76 should be treated as a request for review under s57.  To confirm current assessment is correct we need to establish when compensation was granted to Mr O'Connor.  If this was prior to May 1987 then the compensation is not a $ for $ reduction.  CHECK.  If the assessment is correct as from 5/2/2008 partner will no longer be in receipt of 'CAP' and compo will be assessed as ordinary income.	V SP - $211.50 P SP - Nil SP - Com.Inc. $643.30 SP - Com.Ass. $67,610 95	V SP - $154.80 P SP - Nil  (eligible after 5/8/2008) *04 assessment more beneficial because of other income and direct deduction of compo from partner pension.
(14)	Compensation case.  Partner is receiving a 'CAP', under pension age (63 & half).  Ordinary income test and compensation ($200.00pf) result in nil payment to the partner  Veteran receiving more than double the married rate..	V SP - $110.40 P SP - Nil SP - Com.Inc. $1047.60 SP - Com.Ass. $30,200	V SP - $53.70 S SP - Nil  (eligible after 9/10/1996 *04 assessment more beneficial because of other income and direct deduction of compo from partner pension.
(15)	On current income/asset details partner would be entitled for the ceiling rate $120.10 (wife receiving war widows pension).  Latest details supplied October 1994.  Needs to be looked at immediately. Check that wife is not receiving anything from DSS (SP2 should cover all aspects).	V SP - $331.30 P SP - Nil SP - Com.Inc. $88.84 SP - Com.Ass. $62,699 ISS - Com.Inc. $424.50	V SP - $274.60 P SP - $120.10 *Partner assessment more beneficial.
(16)	On current income/asset details partner would be eligible for the ceiling rate $120.10 (wife receiving war widows pension).  Latest details supplied October 1994.  Needs to be looked at immediately.  Check that wife is not receiving anything from DSS(SP2 should cover all aspects).	V SP - $331.30 P SP - Nil SP - Com.Inc. $83.64 SP - Com.Ass. $60,119 ISS - Com.Inc. $391.92	V SP - $274.60 P SP - $120.10 *Partner assessment more beneficial.
(17)	On current income/asset details partner would be eligible for the ceiling rate $120.10 (wife receiving war widows pension).  Latest details supplied August 1992.  Needs to be looked at immediately. Check that wife is not receiving anything from DSS (SP2 should cover all aspects).	V SP - $331.30 P SP - Nil SP - Com.Inc. $131.74 SP - Com.Ass. $80,909 ISS - Com.Inc. $481.84	V SP - $274.60 P SP - $120.10 *Partner assessment more beneficial.
(18)	Wife in receipt of war widows pension, veteran receiving service pension.  They have other income and were last reviewed in 1991.  On the last details supplied will be better off on ISS and partnered SP.  Needs to be looked at immediately.	V SP - $331.30 P SP - Nil SP - Com.Inc$143.38 SP&ISS Com.Ass.$122,866 ISS - Com.Inc.$493 48	V SP - $274.60 P SP - $120.10 *Partner rates more beneficial than 04.
(19)	Wife is receiving War Widows.  Ex wife is recorded on the screen as a defacto (CDB).  Wife and ex wife are both 'Joyce'.  Veteran is receiving 90% DP and they have other combined income.  Ex wife should be deleted from the CDB and veteran's address needs to be corrected on the PMF.	V SP - $200.80 P SP - Nil SP - Com.Inc. $733.96 SP&ISS - Com.Ass. $25,150 ISS - Com.Inc. $1287.91	V SP - $132.10 P SP - Nil *04 assessment more beneficial because of other income.  DP also counted for ISS rate.
(20)	On current income/asset details partner would not be eligible for any SP.  Veteran is receiving 70% DP,  partner is receiving War Widows and they have other income.	V SP - $171.30 P SP - Nil SP - Com.Inc. $804.00pf SP - Com.Ass. $55,180 ISS - Com.Inc. $1312.65pf	V SP - $114.60 P SP - Nil *04 assessment more beneficial because of other income.
(21)	On current income/asset (including war widows pension) wife would be eligible for small SP.  Full details supplied August 1992 and updated August 1994.  Unless there is major change to income this couple will be reduced by the change in rules.	V SP - $147.50 P SP - Nil SP - Com.Inc. $857.00 SP - ComAss. $90,470 ISS - Com.Inc. $1207.10	V SP - $101.40 P SP - $11.20 *04 assessment more beneficial because of other income.
(22)	Wife in receipt of war widows pension; veteran in receipt of TPI & other income therefore wife not entitled to ISS (income in excess).  If there was no other income apart from TPI & WW partnered combined rates would be greater than 04 assessment.  Last updated on changed details 1994.  Unless there is a major reduction in income this couple will be reduced by the change in rules.	V $130.30 P  Nil SP - Com.Inc. $960.93 SP&ISS Com.Ass. $102,324 ISS - Com.Inc. $1908.93	V SP - $73.60 P SP - Nil *04 assessment more beneficial because of other income.  DP also counted for ISS.
(23)	On current income/asset details partner would not be eligible for any SP.  Veteran is receiving TPI., partner is receiving war widows pension and they have other combined income.  Last reviewed January 1994.  If they was no other income apart from TPI & WW partnered combined rates would be greater than 04 assessment.	V SP - $123.20 P SP - Nil SP - Com.Inc. $980.00pf SP - Com.Ass. $144,866 ISS - Com.Inc. $1927.76pf	V SP - $70.60 P SP - Nil *04 assessment more beneficial because of other income.
(24)	Veteran receiving SP as 'Blinded' 04 assessment.  Wife is receiving war widows pension and veteran is receiving TPI and with other income partner is not eligible for any SP.	V SP - $331.30 P SP - Nil SP - Com.Inc. $536.89 Note - Vet I/A test free. SP&ISS - Com.Ass. $8,600 ISS - Com.Inc. $1484.19	V SP - $274.60 P SP - Nil *04 assessment more beneficial because of other income.
(25)	Veteran receiving SP as 'Blinded' 04 assessment.  On the latest income details under partnered assessment partner would be on a low rate of SP.	V SP - $331.30 P SP - Nil SP - Com.Inc. $1223.27 SP - ComAss. $13,035 Note - Vet. I/A test free.	V SP - $274.60 P SP - $9.80 *04 assessment more beneficial because of income.
(26)	Veteran receiving SP as 'Blinded' 04 assessment.  On the latest income and asset details partner would not qualify for partnered rate.	V SP - $331.30 P SP - Nil SP - Com.Inc.$1331.98 SP - Com.Ass.$53,070 Note - Vet I/A test free.	V SP - 274.60 P SP - Nil *04 assessment more beneficial because of income.
(27)	Asset affected case.  Partner receiving War Widows pension under CX4703.  Needs to be X referenced on the IQ.CI screen.  Assets are in excess for the partner to receive any ISS.	V SP - $114.60 P SP - Nil SP - Com.Inc. $815.00pf SP&ISS - Com.Ass. $312,000 ISS - Com.Inc. $1165.10	V SP - $57.90 P SP - Nil *04 assessment more beneficial because of assets.

Note:  The comments on cases 10 to 14 (Compensation cases) are based on the current assessment, prior to the DI changes stated in the memo.

SUMMARY OF ANALYSIS OF “04” ASSESSMENTS

Situation

Numbers

Details

Incorrectly recorded as type “04” - should be type “10”	2	Cases incorrectly recorded on system
type “04” more beneficial - will be reduced from 1/10	11	2 cases where partners do not currently qualify because of “residency” requirements 7 cases where the partner is a war widow and the combined income prevents ISS being paid 2 “blinded” assessments where combined I/A prevents partner being paid
Compensation affected “04" assessments	5	Cases where the partner is limited to nil because of Compensation
Grant to partner would result in higher combined pensions	7	On current information, the partner would qualify for partner service pension and the combined pensions would be more than the type “04” rate currently being paid to the veteran
Partner rate and type “04” are the same	2	The veteran is currently limited to twice the married rate which means that if the partner is granted their combined rate would be the same as the veteran is currently receiving as type “04”

ATTACHMENT F

O N   L I N E

15/09/95 Item 29/COMP4

TO: Deputy Commissioners

FROM: R J Hay Branch Head Income Support Compensation

ISSUE: Service Pension paid at the Standard Rate calculated on combined income (04 Assessment) saved cases

ACTION:DATE DUE: Record Existing "04" Cases On Pips — 23.9.95 As Manual Assessments

NATIONAL OFFICE DIVISION:  COMPENSATION DIVISION

Subject:SERVICE PENSION PAID AT THE STANDARD RATE CALCULATED ON COMBINED INCOME (04 ASSESSMENT) SAVED CASES

INTRODUCTION

Further to the memorandum entitled 'Service Pension Paid at the Standard Rate Calculated on Combined Incomes (“04” Assessments)'dated 11 August 1995, State Office reviews identified the following:

Categories 4 & 5 cases (if assessed as a member of a couple the combined rate would be less)

NSW — 40 — SA — 16

VIC — 15 — WA — 13

QLD — 14 — TAS — 80*

TOTAL178

*Tasmania have 71 overseas cases where the spouse has no eligibility.

2.From the analysis the remaining “04” assessments were identified as either:

• Category 1 cases (incorrectly recorded as type 04) or

• Categories 2 & 3 (based on current information, the combined rate is the same or higher).

3.The review revealed that there is the potential for a reduction of up to 50% in the number of “04” assessments if both partners of the couples who would be better off under a partnered assessment were to take up their entitlement to pension.

SAVINGS PROVISION FOR EXISTING “04” CASES

4.Savings provisions will protect the rate of service pension paid to pensioners under an “04" assessment as at 1 October 1995.  The savings provisions will operate so that reductions in service pension as a result of a change in a person's circumstances will reduce the 'saved' service pension rate.  However, increases as a result of a change in a person's circumstances, or as the result of indexation or other increases in any component of the person's service pension, will not increase the 'saved' service pension rate.

5.These increases will be offset against the excess pension being received under the “04” assessment (the 'saved' service pension).  While the 'saved' service pension rate is higher than the partnered assessed rate, the savings provisions will continue to apply.  When the excess is eliminated (reduced to NIL), the person's service pension will be calculated as a standard partnered assessment.  For the majority of these cases, this will happen as a result of the accumulation of CPI increases.

6.The savings provisions will also cease to apply to the person if their service pension is cancelled, or they cease to be a member of a couple, or if the person's partner begins to receive a service pension, an income support supplement or a social security pension/benefit.

7.A draft Departmental Instruction detailing the legislative provisions, including examples, will be issued shortly.

STATE OFFICE IMPACT

8.It will be necessary to ensure that all existing “04” cases are now recorded on PIPS as manual assessments (PP.MR).  Effective from 23 September 1995, the system will no longer recognise “04” assessment types and any cases that are not recorded as manual rate cases after this date will automatically receive the partnered assessment when processing action is undertaken.

9.When converting cases to manual rates, text should be recorded (on PP.TE) to the effect that it is a 'saved' assessment case under the old MOA “04” rules.  This information will be useful when manual rate cases need to be considered for any automatic run processing.  A run has been scheduled for 22 September 1995 to identify any “04” cases that have not been converted to manual rates by that time.

10.A standard letter which should be sent to all saved '04' cases is at Attachment A.  The purpose of this letter is to explain the impact of the Budget initiative and savings provisions to affected service pensioners.

11.If you have any questions please contact the Policy Implementation Unit, South Australia:

Robyn Del Casale — 08 2132321 — LAN   S-B-PI-1

Kathi Ashman — 08 2132409 — LAN   S-B-PI-3

Sue Burne — 08 213 2656 — LAN   S-B-PI-2

RJ HAY

BRANCH HEAD

INCOME SUPPORT

ATTACHMENT G

Reference:{Veteran Reference}

Contact:{Contact Name}

Telephone:{Contact Phone}

{Veteran's Name}

{Veteran's Street}

{City} {State} {Postcode}

Dear {Mr/Mrs}{Pensioner's Name}

I am writing to you about the way your service pension is assessed.

Your pension is being paid at a higher rate than that normally available to a married person because your partner is not receiving a pension or benefit.

The Government decided in its 1995 Budget that, from 1 October 1995, all members of a couple should have the same maximum basic amount of service pension payable, regardless of whether only one member of the couple is actually receiving a pension.  This means that, in future, service pension will be paid at the partnered rate rather than the single rate in cases such as yours.

However, the Government did not intend that any current pensioner such as yourself would have their pension reduced as a result of this decision.  This means that you will continue to receive the higher single rate of pension but cost of living adjustments will be offset against the extra pension you are receiving.  This will continue until your single rate of pension equals the amount you would receive if you were being paid the partnered rate of service pension.  From then on you will be paid at the partnered rate.

If there are any changes in your circumstances, such as an increase in your income and assets, they may also affect the rate of pension you will receive after 1 October 1995.

If you have any questions regarding the above, please contact this Office on the above telephone number.

Yours sincerely

Deputy Commissioner.