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Non-indexed Payments and Rates
Last amended: 18 December 2014
Items that are non-indexed
There are a number of payments, limits and rates that are not subject to indexation. These include:
- Energy supplements,
- without adequate means of support pension allowances,
- defence force income support allowance (DFISA),
- funeral benefits,
- decoration allowance,
- remote area allowance,
- education entry payment,
- additional income free area for children,
- allowable gifting limit,
- deeming interest rate, and
- taper rates under the income and assets tests.
Items that are derived from indexed amounts
There a number of payments, limits and thresholds that are not indexed themselves but are derived from other amounts that are indexed. These include:
- income at which service pension ceases,
- assets at which service pension ceases,
- income at which eligibility for treatment ceases,
- assets at which eligibility for treatment ceases,
- adjusted income before income support supplement (ISS) reduces,
- adjusted income at which ISS ceases,
- assets at which ISS reduces,
- assets at which ISS ceases,
- maximum pension bonus,
- minimum rent to be paid maximum rent assistance,
- aged care standard pensioner contribution (under the Aged Care Act 1997), and
- aged care assets thresholds (under the Aged Care Act 1997).
Indexation is the action of adjusting pension and allowance rates, limits and thresholds to maintain their value against increases in the cost of living and average earnings.
A form of pension that prior to 6 June 1985 was granted to the dependants of a veteran whose death was service related where those dependants were without “adequate means of support”. Dependants who could be paid the pension included the wife, husband, widow(er), child, parent or other members of the veteran's family. AMS pensions could also be granted to the invalid child of an incapacitated veteran.
From 6 June 1985, there have been no new grants of AMS pensions, however, a small number of AMS pensions are still in payment.
Defence Force Income Support Allowance (DFISA) is an income support payment to be made by DVA to people whose income support payment under Social Security Law is reduced, or not payable, because of the impact of adjusted disability pension. DFISA is the difference between the person's existing entitlement, and what the entitlement would have been had adjusted DP been exempt, but was assessed in the calculation of rent assistance.
Remote area allowance is a supplementary payment added to the rate of income support pension where the pensioner's usual place of residence is situated in a remote area, and where the pensioner is physically present in the remote area.
Education Entry Payment (EdEP) is a payment to assist eligible pensioners with the costs of enrolling in a course of study in order to develop their skills, obtain a qualification and improve their employment prospects. It is paid once a year in accordance with section 118AAC of VEA.
The taper rate is used to reduce the rate of a person's service pension or income support supplement if they or their partner have any ordinary income in excess of the ordinary/adjusted income free area (IFA). Any income in excess of the IFA will reduce the maximum payment rate by a 'taper rate' of 50 cents in the dollar (or 40 cents for transitional rate of pension). The result is the income reduced rate.
In addition to the income test taper, any assets in excess of the assets value limit will reduce the maximum payment rate per fortnight by 37.5 cents for every $250 over the Asset Value Limit. The result is the assets reduced rate