DATE OF ISSUE: 23 March 1993
EXTENSION OF COMMONWEALTH FRINGE BENEFITS TO ALL SERVICE PENSIONERS
PURPOSE
The purpose of this Departmental Instruction is to provide information about the extension of Commonwealth fringe benefits introduced in the 1992 Budget session.
BACKGROUND
Fringe Benefits
2.Under the existing provisions of the Veterans' Entitlements Act (VEA), all service pensioners (except those classed as blinded) are subject to income and assets tests to determine their entitlement to fringe benefits.
3.If service pensioners have income and assets below a certain level they are automatically issued with Pensioner Health Benefits (PHB) and Transport Concession cards. The Department also issues free rail vouchers on behalf of the NSW, Victoria and Queensland Governments. The PHB card is used by Commonwealth, State, Territory and local Government authorities, as well as other private organisations, as proof of eligibility for the range of benefits and concessions they provide.
4.Service pensioners whose income and assets exceed the prescribed limits are issued a Pharmaceutical Benefits Concession Card (PBC) which entitles the holder to pharmaceutical concessions only.
Fringe Benefit Treatment
5.Australian veteran service pensioners and Commonwealth and Allied veteran service pensioners who were domiciled in Australia immediately prior to enlistment in an overseas force are also eligible to receive a red plastic Service Pensioner Benefit Card (SPBC) and are entitled to treatment at Departmental expense if they satisfy the treatment benefits income and asset tests under Section 53D of the VEA. (If these veterans already hold an STEC or a DTEC, they would get a PTEC instead of an SPBC and an STEC or DTEC).
CHANGES
6.As part of the 1992 Budget, it was announced that the income and asset tests applying to fringe benefits would be abolished and the full range of fringe benefits would be extended to all service pensioners, DSS age pensioners and DSS long-term allowees and beneficiaries. (There was no extension of s53D treatment eligibility.)
7.From payday 1 April 1993, all service pensioners not currently eligible for fringe benefits (in this DI referred to as "newly eligible clients") will be issued with a PHB card. The PBC card will no longer be used.
8.PHB cards will be issued to all newly eligible clients at the end of March for use from 1 April 1993.
9.At this stage it is anticipated that, from 1 January 1994, the PHB card will be abolished and replaced by a new plastic card, the Pensioner Concession Card (PCC).
TELEPHONE ALLOWANCE
10.All service pensioners who are telephone subscribers will be eligible for telephone allowance (TA) from 1 April 1993. A data collection exercise was conducted in conjunction with the January 1993 advice mailout exercise. Any service pensioner client who returned a form, and any client who already has telephone subscriber details recorded should automatically receive TA on payday 1 April 1993.
TARGET POPULATION
11.It is estimated that 52,300 DVA clients will benefit from the initiative to extend fringe benefits. The DSS target population is expected to be over 320,000.
LEGISLATION
12.The eligibility and assessment rules for fringe benefits are currently contained in Part III, Division 15 of the VEA. The VEA has been amended by substituting subsections 53(1) and (2) with new subsections, and repealing sections 53A, 53B and 53C and substituting a new section 53A.
13.The above changes are contained in the Veterans' Affairs Legislation Amendment Act (No. 2) 1992, which received Royal Assent on 24 December 1992. These changes are set out in Attachment A.
FRINGE BENEFIT TREATMENT ENTITLEMENT
14.It is important to emphasise that the rules applying to DVA treatment for veteran service pensioners remain unchanged. Therefore the existing rules and criteria which are applied for the purpose of assessing entitlement to medical treatment under Section 53D of the VEA, including the income period of grace, will continue to be applied. Treatment benefit cut off limits will continue to be indexed twice yearly in March and September.
NEW PROVISIONS
New Criterion
15.As from 1 April 1993 all service pension recipients will be eligible for:
1) full Commonwealth fringe benefits, irrespective of income and assets; and
2) telephone allowance, provided they are telephone subscribers.
The only criterion for assessing fringe benefit eligibility will be receipt of service pension.
16.With the exception of manual rate and special register cases, there will be no procedural changes required, as fringe benefits will be automatically extended as part of the service pension grant.
Period Of Grace
17.As of 1 April 1993 the period of grace (POG) will no longer apply to non-treatment fringe benefits. However the POG will still apply to treatment eligibility for Australian veterans and Commonwealth and Allied veterans who were domiciled in Australia prior to enlistment in an overseas force.
MANUAL METHOD OF ASSESSMENT CASES
18.PHB cards will NOT be produced automatically for these cases. Branches will be required to produce the cards as part of the AL processing. Please note the fringe benefit indicator on the manual rate screen PP.MR should be set to Y for the majority of manual rate cases. Details of the exceptions to this rule are identified below.
Deeming Provisions
19.As from 1 April the fringe benefit saved provisions introduced by deeming will continue to apply, and those non-service pension payees with existing fringe benefit eligibility will remain eligible. In addition, those PBC saved recipients who are not in receipt of service pension will also be issued with a PHB card. These cases will continue to be processed manually in the short term. However, system enhancements will be introduced in Phase 2 of the extension of fringe benefits project in order to automatically record "saved" clients to provide them with PHB cards in the future.
War Widow/ers and Working Rule B Widows
20.A war widow/er who is also a service pensioner in her/his own right will have PHB and Travel Concession cards issued by DVA. A war widow/er in receipt of a pension from DSS will have PHB and Travel Concession cards issued by DSS.
21.However, it should be noted that war widow/ers living in Queensland, Victoria and NSW have already received rail vouchers for the 1993 calendar year and should not be issued with additional vouchers when the PHB card is issued. The vouchers will need to be detached before despatching the card to the client.
22.Clients in receipt of Working Rule B service pension and DSS pension will be issued a PHB card by DSS. No cards will be issued by DVA to these clients.
Overseas clients and Special Register Cases
23.Clients with an overseas address will not receive a PHB card.
24.For each State and Northern Territory, the NCC will print PHB cards for special register (SR) cases and send them to the appropriate Branch Office for despatch.
Pension Loans Scheme and Hardship Provisions Cases
25.Under current rules, if eligible for at least $1.00 service pension under normal asset assessment rules, PLS recipients are eligible for fringe benefits. This provision no longer applies as of 1 April 1993 and all PLS clients will receive PHB cards.
26.With effect from 1 April 1993 all service pensioners assessed under the hardship provisions will receive a PHB card.
Carers
27.Any carer service pensioners not currently eligible for fringe benefits should be manually issued with a PHB card by Branch Offices for use on and from 1 April 1993.Stocks of cards and non-personalised pamphlets will be distributed to Branch Offices (see paragraph 37).
DVA SYSTEMS
28.All PBC card references will be removed from the on-line computer programs. No new PBC cards will be produced or issued after 1 April 1993.
29.Slight format changes to PHB cards have occurred because of this exercise.
30.For the March 1993 bulk issue the PHB card will have printed within the Date of Grant Box:
.'Pre 1993' for clients granted SP prior to 1984; and
.The date SP was granted for clients granted SP after 1984.
31.The PHB card will have printed under the Date of Grant box:
.'Fringe Benefits Date'; followed by
.'01/04/93' (the date fringe benefits was extended to all service pensioners).
32.Please note that, for Queensland cases only, any information that would otherwise be recorded in the space below the Date of Grant box (eg disability pension rate) will NOT be printed.
33.Subsequent daily issues and reissues of PHB cards will be in the current format - relevant programs cannot be changed to reflect the changes made for the bulk issue. Permanent format requirements will be resolved when the PHB card is replaced with the PCC.
IMPLEMENTATION
34.This instruction should be read in conjunction with the System Rules for the March 1993 Bulk Card Issue - particularly for more detail about the manual method of assessment and special register cases - and the March 1993 Quarterly Advices System Rules and Components.
The Mailout Package
35.At the end of March all newly eligible service pensioners are to be sent their PHB card and transport concession card and vouchers (except those war widow/ers mentioned in paragraph 21 above), as well as a non-personalised pamphlet containing the following information:
.a general explanation of the extension of fringe benefits;
.advice about the PHB and transport concession cards and obtaining replacements;
.advice about DVA treatment entitlements cards;
.details of Commonwealth concessions; and
.a list of home-state and inter-state concessions that may be available.
36.The "may" has been emphasised and clients have been advised to contact the relevant concession provider for further information and to confirm eligibility.
Availability Of Pamphlets
37.Stocks of the pamphlets will be forwarded to Branch Offices to enable staff to include a pamphlet with manual method of assessment (MOA) and special register (SR) case advices. Stocks will also be sent to the VAAS units for pensioner enquiries. Any spare pamphlets left over from the automatic run will also be sent on to the appropriate VAAS units. Although only a small number of each pamphlet has been ordered specifically for the VAAS units (and no reprinting will be done), more than enough has been ordered for the manual MOA and SR cases and the automatic run.
Quarterly Advices
38.Newly eligible clients were advised of the extension of Commonwealth fringe benefits as part of the January 1993 general increase bulk advice exercise. A fringe benefits extension paragraph will also be included in the March 1993 quarterly advices.
Payment Advice System (PAS)
39.Substantial changes to the PAS (dailies) and the bereavement advices system in relation to this project have been necessary. However, this should not impact on Branch Office workloads as the relevant paragraphs will continue to be selected automatically. Branches will be issued with an up-to-date copy of the PALPAS advices system paragraph content shortly.
Current Period of Grace Cases
40.The period of grace currently applies to:
1)service pension fringe benefits for non-veteran service pensioners; and
2)service pension fringe benefits and treatment benefits for service pensioner veterans.
41.There will be cases where a service pensioner entered a period of grace within the 13 weeks prior to the production run of 13/14 March and the period of grace is due to expire after 1 April. These clients will have already received a letter advising them that the Department will contact them at a later time about returning any cards they may hold.
42.Service pensioner veterans who may or may not lose their treatment fringe benefits during or at the end of the period of grace will be selected by the system and an appropriate follow-up advice will be automatically produced for all paydays after the 1 April payday. For treatment fringe benefits ons/offs for 1 April, Central Office will examine the relevant reports and despatch an appropriate advice. Please disregard the paragraph in Appendix 7 to the March 1993 Quarterly Advices System Rules and Components paper that advises the Branch Offices to send a proforma advice to clients explaining loss, gain or deferred loss of treatment eligibility.
43.No automatic mechanism has been set in place to list out non-veteran service pensioner fringe benefits recipients already on a period of grace at the time of the 13/14 March production run. This means that an automatic advice cannot be sent advising of continuation of fringe benefits entitlement ie the pensioner should ignore the period of grace advice due to the removal of the fringe benefits income and assets tests.
44.The Central Office project officers are hoping to be able to obtain a report of affected cases and send out an advice about continuing eligibility. If this can't be done, a form of words will be sent to Branches to use in answering queries from any affected clients who contact the Department about returning their cards. A separate instruction about this aspect of the exercise will be sent as soon as we know whether a report can be produced.
EXTENSION OF STATE/TERRITORY FRINGE BENEFITS
45.The Commonwealth provided the States with $17.5 million for the period 1 April 1993 to 30 June 1993 pending the outcome of a joint Commonwealth State Working Party on the understanding the State and Local authorities would also extend fringe benefits for at least this period. Further negotiations with States and Territories are underway in respect of post June 1993.
46.The actual extent of the concessions and benefits that may be made available is at the discretion of the individual authorities. Any client enquiries about eligibility should be redirected to the relevant authority.
ISSUE OF DUPLICATE PHB CARDS FOR USE BY NON-CUSTODIAL PARENTS
47.In DI No. B06/93 Branches were asked to keep records of those service pensioners who were previously issued with duplicate PBC cards, for use by non-custodial parents. These service pensioners should now be issued with a duplicate PHB card if required . The duplicate PHB cards are to be issued manually for use from 1 April 1993.
48.Records of all duplicate card issues will need to be reviewed at the end of 1993, so that duplicate PCCs can be manually issued if required, when the current PHB cards are replaced with PCCs.
FURTHER INSTRUCTIONS
49.The GOSP will be updated to reflect the above changes.
CONTACT OFFICERS
50.Contact Officers for this project are Oona O'Beirne on (02)213 7771 and Liz Lambart on (06)2896405. A list of Branch Contact Officers is at Attachment B.
PETER HAWKER
NATIONAL PROGRAM DIRECTOR
BENEFITS
ATTACHMENT A
Fringe benefits and treatment at Departmental expense for certain service pensioners
59.Section 53 of the Principal Act is amended:
(a)by omitting subsection (1) and substituting the following subsection:
"(1)If a person is eligible for fringe benefits, benefits and concessions of
various kinds may be made available to the person by the Commonwealth, State and Territory governments and authorities and local authorities.
Note:if a person is eligible for fringe benefits in accordance with this Division, benefits and concessions under the National Health Act 1953 may be made available to the person.";
(b)by omitting subsection (2) and substituting the following subsection:
"(2)If:
(a)a veteran is receiving an age or invalidity service pension;
(b)the veteran satisfies the conditions in section 53D;
the veteran may be entitled to certain medical treatment at Departmental expense.".
Repeal of sections and substitution of new section
60.Sections 53A, 53B and 53C of the Principal Act are repealed and the following section is substituted:
Fringe benefits
"53A.A person who is receiving a service pension is eligible for fringe benefits.
Note 1:some persons who would otherwise have lost their entitlement to fringe benefits because of Division 8A of Part III are treated as continuing to be eligible for fringe benefits (see subsection 17(1) of the Veterans' Entitlements (Rewrite) Transition Act 1991).
Note 2:some persons who would otherwise have lost their entitlement to fringe benefits because of investing money or re-investing money in anticipation of, or because of, Division 8A of Part III are treated as continuing to be eligible for fringe benefits (see subsection 17(2) of the Veterans' Entitlements (Rewrite) Transition Act 1991)".
ATTACHMENT B
BRANCH OFFICE CONTACT OFFICERS
NAMEPOSITIONPHONEFAX
NSW — Karen Hanssen — SSO — 02)213 7106 02)281 2083
Julie Anderson — Team
Leader TFN — 02)213 7337 02)281 1939
VIC — Mary Gaynor — 03)284 6420 03)284 6797
QLD — Clare McCorry — SSO — 07)223 8835 07)223 8533
SA — Maria Lewandowski — SSO 08)213 2414 08)213 2412
WA — Rod Mohr — SSO — 09)425 8417 09)221 3095
TAS — Doug McLean — SSO — 002)21 6683 002)21 6602
NT — Tony Wiles — Manager — 089)27 0044 089)45 0384
Debbie Masters " "