Last amended: 20 September 2011
Eligibility criteria
A person may be granted Income Support Supplement [glossary:(:]ISS[glossary:):] on the basis of invalidity if:
- the person is eligible for a war widows' pension or a war widowers' pension paid under the VEA, or eligible for compensation as a MRCA wholly dependant partner; and
- is permanently incapacitated for work.
A war widow/widower may be automatically accepted as being permanently incapacitated for work for ISS purposes without the need for medical investigation if they:
- have qualified for disability support pension from Centrelink within the last 2 years, or
- are permanently blind in both eyes, or
- can provide evidence that they are manifestly disabled.
Change in incapacity status
A war widow or war widower granted income support supplement on the grounds of permanent incapacity will retain payability if they regain their health or reach age pension age, however, the tax exempt status of the income support supplement will be lost.
Lodging a claim
Although a person may meet the eligibility criteria for invalidity ISS, the payment cannot be made until a proper claim is lodged.
When a claimant has indicated on a Form D2663 Claim for pension by a war widow or other dependant of a deceased veteran form that they wish to claim for the ISS in addition to war widows/widowers pension, this may be considered as a proper claim for ISS. They will still however need to lodge form D0648 Claim for service pension or income support supplement Part B – Income and Assets before payability can be determined.
Form D0571 Invalidity Income Support Supplement Claim – Medical and Work details must also be lodged for invalidity ISS to establish whether the war widow/widower meets the permanent incapacity criteria. This applies unless the person:
- has qualified for disability support pension from Centrelink within the last 2 years, or
- is permanently blind in both eyes, or
- is manifestly disabled.
There is no advantage to a person claiming ISS on the basis of permanent incapacity for work if they are over age pension age. This is because the tax exempt status of the payment is lost once the person reaches age pension age. Therefore, where an ISS claimant is over age pension age, they should be advised to lodge a claim for ISS, rather than invalidity ISS.
Payability
There are a number of situations where a person may be eligible for invalidity income support supplement but that pension is not payable to them.
Taxation
Invalidity income support supplement is non taxable when paid to a person who is under age pension age. When the invalidity income support supplement recipient reaches age pension age, the pension become taxable.