DATE OF ISSUE: 22 FEBRUARY 1995
DVA/DSS CLEARANCES
INTRODUCTION
The purpose of this instruction is to confirm current policy on clearance and adjustment procedures between the Department of Social Security (DSS) and the Department of Veterans' Affairs (DVA).
BACKGROUND
2.The need for clarification has been highlighted by an apparent level of confusion regarding the procedures for the recovery of excess payments which may occur when a person transfers from one Department to the other, or when a retrospective grant or increase of Disability Pension (DP) is made to a DSS pensioner.
GENERAL PRINCIPLES
3.The primary source of this confusion seems to arise from a misconception of when is an excess payment an overpayment and when is it purely an excess payment.
4.An overpayment can only occur where an excess or incorrect payment had been made as a result of a breach of the Act - ie where the client has
mislead the Department; or
failed to notify of an event , and the event which caused the excess entitlement to be paid was a notifiable event; or
where loss of basic eligibility had occurred -eg divorce.
6.Where loss of basic eligibility or a breach of the Act has not occurred, the excess payment has been made as a result of administrative error, and no overpayment exists. Although, at "law" excess payments may be recovered, it is administratively inefficient and does not reflect well on the Department.
EXCESS PAYMENTS
7.Excess payments can be caused by :
i)Transfer from one Department to another, where there is a bar against receipt of dual payment. For example, where a DSS age pensioner is granted a service pension (SP), the DSS payment ceases to be payable from the date of grant of SP, and a debt for the amount of DSS payment paid since the date of grant of the SP is created.
ii)Grant of pension which affects the benefit currently being received.
For example where a DSS income support pensioner is retrospectively granted DP or a war widow pension (WWP), any amount of income support which would not have been payable during the period if the DP or WWP had then been in payment, is the excess payment or "adjustment" amount.
CLEARANCE PROCEDURES
8.The clearance process is used to prevent dual payments upon transfer between Departments or where a grant or increase in DP/WWP has occurred. It ensures that the losing (ie the first) Department's payments are cancelled from the date on which the gaining (ie the second) Department commences payment. It also ensures that backdated amounts are adjusted if a period of overlap occurs, and that income support payments from DSS are correctly adjusted when increases or grants of DP/WWP are made.
Recovery of Excess Payments
9.An "adjustment" of any overlapping payments should be made prior to grant of benefit by the gaining (ie the second ) Department. Therefore it is the responsibility of the gaining Department to ensure that payment is not released prior to receipt of adequate clearances from the losing Department. Note that any request for clearance should clearly show the effective date for grant of the new entitlement.
10.The losing Department should advise the gaining Department of the cut-off date and amount of pension paid per fortnight. It is then the responsibility of the losing Department to calculate the adjustment amount from date of grant to date of cut-off - ie the gaining Department recovers the excess payment on behalf of the losing Department.
11.The adjustment is usually made from any arrears of pension payable upon grant of the new entitlement. Accordingly, it is the responsibility of the gaining Department to ensure that arrears are not released prior to receipt of relevant clearances from the losing Department.
12.Similarly, if a DSS pensioner is retrospectively granted DP or WWP, or receives a backdated increase to current rate of DP, than the amount of DSS pension which would not have been paid had DP or WWP been payable at the time needs to be adjusted. DSS should calculate the adjustment amount, which is then deducted from any arrears of DP or WWP payable by DVA.
Appeals against the calculation amount should be directed to DSS.
13.If DVA releases arrears prior to receipt of a DSS clearance, and it subsequently becomes apparent that an excess payment had occurred, the overpaid amount has been caused by administrative error, and is an excess payment. Although it is possible to recover an excess payment in these circumstances, it is also possible for a very strong case to be argued for waiver. Therefore, every effort must be made to ensure clearance/adjustment amounts are received BEFORE arrears are released.
14.Where arrears are insufficient to cover the excess payment, the gaining Department is responsible for recovery from ongoing pension payments. However, the calculation of the adjustment amount is the responsibility of the losing Department and any questions should be directed to that Department.
DVA Clearance Procedures
15.In ALL new cases of grant or restoration of service pension, a copy of the particulars of income and assets and assessment of service pension,
should be sent to DSS, together with a request for clearance. These documents should include a record print of income and asset details and indicate the reason for the preparation (ie pension clearance or for information only).
Under no circumstances should arrears of pension be released prior to receipt of reply from DSS.
16.Similarly, when DP or WWP is granted, or DP is increased retrospectively, a request for a clearance should be sent to DSS and arrears withheld pending notification from DSS.
17.Any difficulties with the clearance process should be brought to the attention of the Director, Communications Operation and Review Section (CO&R), in Central Office. (David Holloway on telephone 06 2896429). Any queries regarding recovery action of excess payments should be directed to Freda Widawski of the Policy Administration and Advice area, who can be reached on telephone 06 2896751.
GARY COLLINS
NATIONAL PROGRAM DIRECTOR
BENEFITS