Annual notional pension rate
Should the person's marital status change during the overall qualifying period, it is necessary to calculate a bonus reflecting the marital status that applied during different periods of the overall qualifying. Therefore, a notional rate of pension is calculated for the period when the person was a different marital status from their status at the time of grant of pension. In such a circumstance, the following formula is used to calculate the total pension bonus:
Annual notional single pension rate (Step 1) X pension multiple (Step 2) X no. of single years in overall qualifying period (Step 3)
+
Annual notional partnered pension rate (Step 1) X pension multiple (Step 2) X no. of partnered years in overall qualifying period (Step 3)
Step 1
Section 45UH VEA
Section 45UI VEA
Calculate the person's annual notional pension rate as follows:
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If the person is... |
Then the annual notional pension rate for the period the person was... |
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not a war widow/widower-pensioner and is not permanently blind |
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not a war widow/widower-pensioner and is permanently blind |
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a war widow/widower-pensioner and was a war widow/widower-pensioner during the whole of the overall qualifying period that the person was single |
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a war widow/widower-pensioner and was a war widow/widower-pensioner during the whole of the overall qualifying period that the person was partnered |
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a war widow/widower-pensioner and was not a war widow/widower-pensioner during some or all of the overall qualifying period that the person was single |
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a war widow/widower-pensioner and was not a war widow/widower-pensioner during some or all the overall qualifying period that the person was partnered |
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Adjusted percentage
A person's adjusted percentage is the pension payable at the time of grant expressed as a percentage of the maximum rate of pension. In some cases a person's notional rate is calculated by applying the adjusted percentage to derive a proportional rate of pension that would have been payable if the person had been a different marital status at the time of grant.
The adjusted percentage is calculated as follows (note that all amounts are as at the date of grant of pension):
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If the claimant is... |
Then the adjusted percentage is... |
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not a war widow/widower |
annual pension rate/(MBR + pension supplement basic amount) X 100 |
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a war widow/widower and has deferred age service (not subject to a ceiling) or partner service pension for some or all of the overall qualifying period |
the annual pension rate payable, if the person's age or partner service pension rate had not been subject to a ceiling/(MBR + pension supplement basic amount) X 100 |
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a war widow/widower and has deferred age pension for some or all of the overall qualifying period |
if the person had been granted age pension, the rate that would have been the person's provisional annual payment rate under 1064-A1 of the Social Security Act 1991 if it were assumed that Steps 2 and 3 were omitted from the Method statement/MBR + pension supplement basic amount under the SSA X 100 More →
Social Security Act 1991 – Section 1064-A1 Pension Rate Calculator A http://www.comlaw.gov.au/comlaw/management.nsf/lookupindexpagesbyid/IP200401781?OpenDocument |
Calculations for person who becomes war widow/widower during overall qualifying period
When a person becomes a war widow/widower during the overall qualifying period, the bonus is 'apportioned' to allow for this variation in their status. Where the person has changed marital status during the overall qualifying period, an apportioned single/apportioned partnered amount is calculated.
Apportioned single amount
The apportioned single amount is calculated as follows:
[(period not a war widow/widower ÷ single part of overall qualifying period) X provisional payment rate] + [(period a war widow/widower ÷ single part of overall qualifying period) X annual pension rate]
For the purpose of calculating the apportioned single amount, the provisional payment rate is:
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If the person has, for some or all of the single part of the overall qualifying period... |
Then the provisional payment rate is... |
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deferred age service pension (not subject to a ceiling) or partner service pension and the person is not permanently blind |
the adjusted percentage of (MBR + pension supplement basic amount) as at the date of grant and assuming that the person were single at the time |
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deferred age service pension (not subject to a ceiling) or partner service pension and the person is permanently blind |
MBR + pension supplement basic amount as at the date of grant and assuming that the person were single at the time |
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deferred age pension and the person is not permanently blind |
the adjusted percentage of (MBR + pension supplement basic amount under the SSA) as at the date of grant and assuming that the person were single at the time. |
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deferred age pension and the person is permanently blind |
MBR + pension supplement basic amount under the SSA as at the date of grant and assuming that the person were single at the time. |
Apportioned partnered amount
The apportioned partnered amount is calculated as follows:
[(period not a war widow/widower ÷ partnered part of overall qualifying period) X provisional payment rate] + [(period a war widow/widower ÷ partnered part of overall qualifying period) X annual pension rate]
For the purpose of calculating the apportioned partnered amount, the provisional payment rate is:
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If the person has for some or all of the partnered part of the overall qualifying period... |
Then the provisional payment rate is... |
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deferred age service pension (not subject to a ceiling) or partner service pension and the person is not permanently blind |
the adjusted percentage of (MBR + pension supplement basic amount) as at the date of grant and assuming that the person were partnered at the time. |
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deferred age service pension (not subject to a ceiling) or partner service pension and the person is permanently blind |
MBR + pension supplement basic amount as at the date of grant and assuming that the person were partnered at the time. |
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deferred age pension and the person is not permanently blind |
the adjusted percentage of (MBR + pension supplement basic amount under the SSA) as at the date of grant and assuming that the person were partnered at the time. |
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deferred age pension and the person is permanently blind |
MBR + pension supplement basic amount under the SSA as at the date of grant and assuming that the person were partnered at the time. |
Step 2
Calculate the person's pension multiple, using the following formula:
[(0.094) X (no. of years in the overall qualifying period)]
Step 3
Calculate the number of single/partnered years in the overall qualifying period:
- The number of single years in the overall qualifying period is the number of years during the overall qualifying period when the person was single.
- The number of partnered years in the overall qualifying period is the number of years during the overall qualifying period when the person was partnered.
Example of pension bonus calculation - change in marital status during qualifying period
Mr Jones has deferred his pension for 5 full years. He is now claiming single service pension and pension bonus. During his overall qualifying period, Mr Jones was partnered for 2 years and 7 months (214 days) and has been single for the last 2 years and 5 months (151 days). At grant, Mr Jones has in his assessment $50,000 assets and $235.50 income per fortnight.
The following steps are required to calculate his pension bonus:
(Note: These rates are effective at 20 September 2009)
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Step |
Action |
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1 |
His annual pension rate (single) at grant is $14,066 ($541 per fortnight) - |
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2 |
Number of single years is 2 + 151/365 = 2.414 years |
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3 |
Number of partnered years is 2 + 214/365 = 2.586 years |
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4 |
Annualised maximum basic rate plus pension supplement basic amount is $16,520.40 (single) and $12,495.60 (partnered) |
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5 |
Adjusted percentage is (14,066/16,520.40) X 100 = 85.143% |
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6 |
Annual notional pension rate single is (85.143% X 16,520.40) = $14,065.96 |
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7 |
Annual notional pension rate partnered is (85.143% X 12,495.60) = $10,639.13 |
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8 |
Pension multiple is 0.094 X 5 (total years) = 0.47 |
Pension bonus is:
(annual notional single rate) X (pension multiple) X (no. of single years)
+
(annual notional partnered rate) X (pension multiple) X (no. of partnered years)
(14,065.96 X 0.47 X 2.414)
+
(10,639.13 X 0.47 X 2.586)
=
(15,958.96 + 12931.01)
=
$28,890.00 (rounded)