DATE OF ISSUE: 21 MARCH 1995
OPERATION OF CURRENT PROVISIONS OF THE VEA DEALING WITH DATE OF EFFECT FOR AN INCREASE IN RATE OF SERVICE PENSION
The purpose of this Departmental Instruction is to clarify the operation of the current provisions of the Veterans' Entitlements Act 1986 (VEA) dealing with "date of effect" for an increase in rate of service pension.
Background
2.Apparently the recent issue of a draft of the ASO 2 "Effective Dates" GOSP training module highlighted the fact that in the past there has been some variance between State Offices in what date was taken to be the effective date for an increase in rate of pension.
3.Reaction to that training module draft revealed that, where it has been determined that an increase to the rate of service pension is payable, some State Office staff have been increasing the rate of pension with effect from the day or pay-day on which the change of circumstances advice was received, if that day was a pay-day.
Current VEA provisions dealing with date of effect for an increase in the rate of service pension
4.Contrary to current thought in some State Offices, there have been no recent changes to Repatriation Commission policy or to the provisions of the VEA which deal with date of effect for an increase in rate of service pension.
5.Current subsections 56G(1) and (2) of the VEA (see Attachment A) continue to provide that a determination to increase the rate of service pension (a "favourable determination") takes effect from the first pension pay-day following a person advising the Department of a change of circumstances leading to the "favourable determination", or on the day on which the change occurred, whichever is the later.
6.In the case of the favourable determination being made following the death of a service pension partner or a non-pensioner partner, and subject to certain conditions being satisfied, subsections 2A, 2B or 2C are applicable and provide that the date of effect for the increase in rate of service pension for the surviving partner is the day after the day on which the deceased partner died.
7.Given the clear instruction which section 56G provides relating to the date of effect of an increase in the rate of service pension, any action to increase rate of service pension with effect from the day or pay-day on which the change of circumstances advice was received (if that day was a pay-day) is contrary to the provisions of the VEA and as such this practice should cease.
Pre rewrite provisions of the VEA and current SSA provisions
8.The provisions of the pre rewrite version of the VEA were not altered in intent by the 1991 rewrite of the VEA. Subsection 58(3) and paragraph 58(3A)(a) (see copy at Attachment B) of the pre-rewrite VEA had the identical effect and intent as the current subsections 56G(1) and (2).
9.Further, the effect and intent of the current VEA subsections 56G(1) and (2) date of effect provisions do not differ from the effect or intent of the current equivalent provisions of the Social Security Act 1991 (SSA) - subsections 80(1) and 80(5) (see copy at Attachment C).
Error in GOSP re effective date for increase in rate of pension
10.It seems that an error in the General Orders Service Pension (GOSP) may have caused some concern in some State Offices that policy and/or the VEA provisions in respect of date of effect for service pension rate increases had changed.
11.The error was contained in the "Increase In Rate Of Pension" section of the "Effective Dates" chapter of the GOSP, which stated as follows (emphasis added):
"A pension increase that results from a selective review (SDIR) will be increased from the pension payday following lodgement of a Form SP3 or SP3A or, if lodged on a pension payday, from that day."
12.The emphasised statement is in fact incorrect, in that a service pension increase resulting from a selective review is also subject to the provisions of subsections 56G(1) and (2) as noted above ie., the increased rate of service pension will be effective from the first pension pay-day following lodgement of the review form or on the day on which the change of circumstances occurred, whichever is the later.
13.The above-mentioned error has been corrected and appropriate amendments have been incorporated in the latest release of the GOSP due in mid-March.
Queries
14.Any queries regarding this Instruction should be directed to Martin Dibb, telephone 06-2896440.
ASSISTANT SECRETARY
INCOME SUPPORT BRANCH
ATTACHMENT A
Extract from the current VEA
Subsections 56G(1) and (2)
"56G.(1) The day on which a determination under section 56C or 56F (in this section called the favourable determination) takes effect is worked out in accordance with this section.
(2) Subject to subsections (2A), (2B) and (2C), if:
(a)the favourable determination is made following a person having advised the Department of a change of circumstances; and
(b)the change is not a decrease in the rate of the person's maintenance income;
the determination takes effect on the first pension pay-day after the day on which the advice was received or on the day on which the change occurred, whichever is the later."
ATTACHMENT B
Extract from pre rewrite version of the VEA (prior to 1/7/91)
Subsection 58(3)
"(3) Where the Commission is satisfied that, having regard to any matter that affects the payment of a service pension, the rate of service pension is less than it should be, the Commission may, by determination in writing, increase the rate of service pension."
Paragraph 58(3A)(a)
"(3A) A determination under subsection (3) takes effect:
(a)if the determination is made following the service pensioner having advised the Department of a change in circumstances (other than a change consisting of a decrease in the rate of the service pensioner's maintenance income)- from the first pension pay-day after receipt of that advice or from the day on which that change occurred, whichever is the later;"
ATTACHMENT C
Extract from the Social Security Act 1991
Subsection 80(1)
"(1) The day on which a determination under section 76 or 79 (in this section called the "favourable decision") takes effect is worked out in accordance with this section."
Subsection 80(5)
"(5) Subject to subsections (5A) and (5B), if the favourable determination is made following a person having advised the Department of a change in circumstances, the determination takes effect on the day on which the advice was received or on the day on which the change occurred, whichever is the later."