Adjustments to an Assessed Rate

Last amended: 5 March 2013

Converting an annual rate to a daily rate

The rate of income support pension is calculated on an annual basis and then converted to a daily rate by dividing the annual rate by 364. The pension is then paid fortnightly.    

Rounding of fortnightly instalment

Prior to 12 May 1983, fortnightly instalments of service pension and income support supplement were rounded to the nearest cent. From 12 May 1983 until 19 September 2001, fortnightly instalments of service pension and income support supplement were rounded up or down to the nearest multiple of 10 cents. If an amount was a multiple of 5 cents but not a multiple of 10 cents, the amount was rounded up by 5 cents. Since 20 September 2001, instalments of service pension and ISS have been rounded up or down to the nearest whole cent. Where the remainder is half a cent, the amount is increased to the next cent.

Examples of rounding from 20 September 2001

The following table provides examples of how rounding up and down has been applied to DVA payments since 20 September 2001

Minimum pension payment

From 20 March 2013, the minimum amount of pension that is payable is the minimum pension supplement amount and the clean energy supplement. These amounts may be paid at the single rate, or member of a couple rate, as per the person's status in the assessment of their pension.  The minimum pension supplement amount is a component that must be paid in full, or not at all.  Thus, the minimum amount will be paid even if the person's assessed pension rate reduces to below this level but is greater than nil. This minimum amount will be lost only when the assessed pension rate under the income and assets test is nil.      

Note: This rule does not apply to o — verseas residents or pensioners away from Australia on a temporary basis for longer than 6 weeks, as they are not eligible for the mini — mum pension supplement amount or the clean energy supplement.

Rate adjustment for small amounts

No variation in the fortnightly rate of pension is made if the variation would be less than $1. Not determining pension variations of less than $1 is intended to reduce the level of intrusion into the private lives of veterans, and to eliminate unnecessary pension administration where changes to payability are minimal. However, the $1 minimum rule does not automatically apply in all pension variation cases, as this may breach other assessment requirements provided for by the VEA.

Circumstances when the $1 minimum rule is applied

The $1 minimum rule should be applied to –

• determined increases and reductions under sections 56C and 56D,
• automatic termination/rate reductions under sections 56, 56A and 56B, and
• changes by computer under section 56N.

Circumstances when the $1 minimum rule is not applied

The $1 minimum rule should not be applied when:–

• there are changes to individual components (e.g. as rent assistance) included in the service pension or income support supplement, which are then offset against other payability changes resulting in an overall change of less than $1. (The different taxation treatment of the individual components will not be properly determined if the $1 minimum rule is used in these cases), e.g. when service pension increases by $3.70 and rent assistance is reduced by $3.20 the over all increase is $0.50. Although the pension change is less than $1, the variation will need to be determined because the taxable/non-taxable composition of the payment has changed,
• the pension increase arises through indexation, or
• the pensioner would otherwise be denied a benefit such as a maximum rate of pension, or treatment entitlement.