C09/2004 Assessment of Spousal Maintenance

Purpose

The purpose of this Department Instruction is to confirm the procedures for the assessment, and correct recording of, spousal maintenance amounts in PIPS, for the purposes of the income test under the Veterans' Entitlements Act 1986 (VEA).  This follows an enquiry from a State Office regarding the method of recording spousal maintenance payments received by a pensioner.

Legislation and CLIK reference

The assessment of spousal maintenance under the VEA income test depends on whether the spousal maintenance amounts are being received or paid.

The definition of “ordinary income” contained in subsection 5H(1) of the Veterans' Entitlements Act 1986 (VEA) states that ordinary income does not include maintenance income.

“Maintenance income” is separately defined in section 5K of the Act to include those maintenance payments that are received for the purposes of child or partner maintenance.

Accordingly, child and spousal maintenance amounts that are received by a pensioner are not assessed as ordinary income under the VEA income test.    They are, however, taken into account under the maintenance income test for family payment purposes, and are included in the manual calculation of child related payments.

Spousal maintenance amounts that are paid by a veteran are allowable deductions from other sources of income, if they arise from a legally enforceable agreement.  As these maintenance payments are not available to the pensioner, they fail the income definition that the amounts be for the person's own use or benefit.  It is a policy requirement (set out in P10/C6/S3 of the CLIK Policy Library) that the maintenance payments arise through a legally enforceable agreement.  This is considered necessary to avoid the possibility of deliberate deprivation of income in this area.

Procedures for recording of cases in PIPs

The spousal maintenance screen on PIPS is intended for the recording of paid maintenance amounts only.  Amounts entered on this screen are assessed by PIPS as being negative amounts, and are deducted from other recorded income sources.

PIPS entries should not be made in respect of maintenance amounts received.  As maintenance income amounts which are received are excluded from the definition of income, there is no requirement that they be recorded on PIPS.  Recording received amounts on the PIPS maintenance screen will result in an incorrect deduction from other sources of income.

Review of maintenance cases

It would be appreciated if State Offices could review the recording of existing maintenance payments, to ensure that only paid maintenance amounts are recorded within PIPS.

Contact

Please refer any questions on this matter to Ann Donnelly in Income Support Policy, National Office, on extension 16439.