C16/1999 DETERMINATION OF MEMBER OF A COUPLE

Introduction

The purpose of this Departmental Instruction is to replace DI C07/99 Determination of a member of a couple, and to provide further direction on the use of Section 5R(3) of the Veterans' Entitlements Act 1986 (VEA).  Section 5R(3) provides the discretion to treat a person who is a member of a couple as not being a member of a couple.

Sub-section 5R(3)

Sub-section 5R(3) states:

“Person may be treated as not being a member of a couple”

(3) The Commission may determine, for any special reason, that a person who is a member of a couple is not to be treated as a member of a couple for the purposes of this Act.”

Background

A number of issues relating to the determination of a member of a couple have been identified since the policy was introduced in 1995 and there has been a degree of inconsistency regarding the use of the above sub-section in relation to assessing cases where the outcome of the application of the legislation could be considered inequitable.

Partnered assessments prior to October 1995

Prior to October 1995, if a veteran was a member of a couple and the veteran's partner was not receiving a service pension or social security pension or benefit, the veteran could receive the single rate of service pension.  The rate was calculated using the couple's combined income/assets and the partnered income free areas and assets free areas.

However, the veteran's rate of service pension could not exceed twice the partnered (married) rate at which the service pension would be paid to the veteran if the partner was receiving a service pension or social security pension or benefit.

1995 Budget changes

Under changes announced in the 1995-96 Budget, the rate of service pension for a member of a couple was limited to the partnered (married) rate.  This applied even where only one member is eligible for, or chooses to receive the pension.

From 1 October 1995 any new assessment where a person is a member of a couple is calculated on combined income and the partner rate applies, except for illness and non illness separated couples or under exceptional circumstances.

This change was designed in part to ensure that DVA met its obligation for equitable treatment of its clients by treating all members of a couple in the same way and also to ensure parity with the DSS rate payable to those assessed under the economic loss compensation provisions.  Under the Social Security Act 1991 (SSA) where one member of a couple is not affected by compensation but the partner is, payment is made at the lower partnered rate.   DVA was previously paying the higher single rate to the pensioner not affected by the compensation payment.

Unintended consequences

Whilst this change to the VEA was the intention and provided equity, a number of unintended consequences have resulted.

In some cases, a veteran may marry a person overseas but is reduced to the married rate as soon as he/she notifies DVA of his/her marriage.  The spouse may not be able to enter Australia because he/she may have failed medical tests or may be awaiting the correct visa.  In this case, the VEA precludes payment to the spouse as he/she is not in Australia or an Australian resident (as defined by section 5G(1)), and the veteran is required to support both of them on the married rate pension.

Other reasons may be that the spouse is residing in Australia without the correct visa for payment by DVA and is also subject to a 2 year waiting period preventing payment from Family & Community Services or the spouse may simply be under the required pension age limit.

Application of S5R(3)

Sub-section 5R(3) gives discretion to treat a member of a couple as not a member of a couple under special circumstances.

The determination of a member of a couple policy was not intended to disadvantage people in real need of financial support.  S5R(3) should be the basis for decision in all future cases where one member of a couple is not eligible for a pension from DVA or a pension, benefit or allowance from Centrelink.

That is including all cases where:

• The partner of a veteran is overseas awaiting the correct visa or medical tests to come to Australia; or

• The partner of a veteran is in Australia but has not got the correct visa to be payable by DVA and is subject to the 2 year waiting period before being eligible for a pension, allowance or benefit at Centrelink; or

• The partner of a veteran who is not a TPI and the partner is under the age of 50 with no dependent children and therefore unable to receive partner service pension from DVA and is not eligible to receive any pensions, allowances or benefits from Centrelink.

The discretion to regard a veteran as not a member of a couple should be exercised only where a full consideration of all the circumstances relevant to the individual's case would make it unjust or unreasonable not to do so.

Calculation of pension rate

When calculating pension using the discretionary option of 5R(3), pension is assessed using the partnered assessment, partnered IFA/AFA but excess income/assets subtracted from single rate not partnered rate service pension.

Historical cases

The new guidelines on treatment of sub-section 5R(3) will take effect from the day this DI is issued.

Cases that have been more harshly assessed under the previous guidelines governing treatment for the use of sub-section 5R(3) can be re-assessed under the new guidelines if the situation meets the requirements outlined in this DI.

This would only be for particular cases that come to light as it is not possible to identify all cases where re-assessment using the discretionary option of sub-section 5R(3) would be beneficial.

Related pensions

The Determination of a member of a couple policy only affects service pension at DVA and the discretionary option should not be considered when assessing age pension under the SSA.  For these cases the Centrelink guidelines should be followed.

Inquiries

Any question regarding this DI should be directed to the Policy Section in National Office:

• Jeanette Ricketts, Director               (02) 6289 6085

• Jodi Curran, Project Officer             (02) 6289 6120