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3.11.3 Payment of Lump Sum Advance
Last amended: 28 July 2022
Advance payment eligible amount
The advance payment eligible amount is the sum of the maximum basic rate of service pension that applies to the person (i.e. single, partnered, illness separated) and the amount (if any) by which the person's pension supplement exceeds the minimum pension supplement amount. For people not receiving a service pension this is calculated as if they were receiving the pension.
Amount of lump sum advance payment
The result of the following process is the maximum advance payable:
Work out 3/52 of the person's advance payment eligible amount.
Work out the annual rate at which pension was payable to the person on the last payday before they applied for an advance payment (excluding any remote area allowance, minimum pension supplement and energy supplement).
Work out the smaller of the result of Step 1 and:
From the result of step 3 subtract:
Round the result of step 4 to the nearest cent (rounding 0.5 cents upwards).
A pensioner can request any amount of lump sum advance providing it is less than the advance payment maximum amount and greater than the advance payment minimum amount.
Minimum amount of advance payment
The minimum advance payable is 1/52 of the person's advance payment eligible amount.
Frequency of lump sum advance
There is no direct limit on the number of lump sum advance payments. In practice, due to the operation of the minimum and maximum amounts, up to three lump sum advances can be granted in any 13 week period.
Service Pensioners or ISS recipients who also receive Disability Compensation Payment
Where an individual has two payments which make them eligible for a lump sum advance, they are entitled to receive a lump sum advance based on whichever payment gives the higher advance amount.
Example of a lump sum advance for a person receiving service pension and Disability Compensation Payment
Anne is a single person who receives fortnightly service pension payment of $530.60 (including pension supplement but excluding energy supplement) and a 15% Disability Compensation Payment of $64.89 (excluding energy supplement). She applies for an advance of $800. A delegate of the Commission determines that she meets all of the eligibility criteria. She has not received any advances in the past 13 fortnights. Based on her service pension (excluding the minimum supplement and energy supplement) her maximum lump sum advance is $975 ([$530.60 – 30.60] x 1.95). Based on her Disability Compensation Payment her maximum lump sum advance is $843.57 ($64.89 x 13). As the service pension advance is higher, but is less than the maximum single advance of $1,005.75, that amount will be her maximum advance. Her minimum advance is $381.05. Based on her service pension, she can receive an advance of $800, but she will not be eligible for another advance for the next thirteen fortnights, as her maximum advance less the $800 advance is lower than the minimum advance payment amount.
Example of a person not able to receive an advance
Bob has a partner and they receive fortnightly service pension payment of $83.10 each (including pension supplement but excluding energy supplement). He applies for an advance of $300. A delegate of the Commission determines that he meets all of the eligibility criteria. He has not received any advances in the past 13 fortnights. The maximum amount of advance he can receive based on his service pension (excluding the minimum supplement and energy supplement) is $117 ([$83.10 – 23.10] x 1.95). However, as this is less than the $287.25 minimum advance amount, Bob is not entitled to an advance.
Example of multiple lump sum advances
Henry has a partner but is receiving the single rate of service pension because his wife is in aged care. He is on the maximum rate of service pension. He has already received an advance of $500, which he has repaid for three fortnights at $38.46 per fortnight, with $384.62 of this advance still outstanding. His maximum advance amount is $505.75 ($1,005.75 less the $500 already advanced in the last 13 fortnights). His minimum advance amount is $381.05. If he takes an advance of $505.75 his repayments will be $68.49 per fortnight ($505.75 + $384.62 divided by 13).
Payment of lump sum advance
If the application is granted, the advance payment is paid as a lump sum, either:
- on the next day that the pension is payable, or VEA →
- on a day stated in the determination (usually within two working days). VEA →
The lump sum advance is generally paid into the same account as the pension payment. The advance may be paid into another account, provided that it is nominated and maintained by the person who is eligible to receive the advance.More →
The pension supplement is added to a person's maximum basic rate. The pension supplement is calculated as a 'combined couple' rate. The 'not a member of a couple' rate is 66.33% of the 'combined couple' rate. The member of a couple rate is 50% of the combined couple rate. From 1 July 2010, the minimum pension supplement amount will be able to be claimed on a quarterly basis rather than on a fortnightly basis.
The minimum pension supplement is an annual rate and is paid fortnightly. From 1 July 2010, the minimum pension supplement became more flexible, with recipients able to elect to receive the payment quarterly. It is calculated as a combined couple rate and is indexed twice a year in line with CPI increases. The 'not a member of a couple' rate is 66.33% of the combined couple rate. The member of a couple rate is 50% of the combined couple rate. The minimum pension supplement commenced on 20 September 2009 and replaced utilities allowance and telephone allowance.
The energy supplement is a fortnightly or quarterly payment designed to help recipients meet the cost of electricity and gas bills.