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C16/2006 Exemptions from Payment by Direct Credit
DATE OF ISSUE: 18 July 2006
Exemptions from Payment by Direct Credit
National Manager Income Support Service Delivery Group
Directors Income Support Service Delivery Group
Directors Income Support and Aged Care Policy Group
Client Contact Management Group
CC:General Manager Service Delivery
CC:General Manager Policy and Development
This Departmental Instruction is to advise service delivery areas of policy changes regarding exemptions from payment by direct credit.
Section 122(4) of the Veterans' Entitlements Act 1986 (VEA) provides that a pension shall be paid in such manner as the Commission determines.
Payment of pensions and benefits by direct bank credit has been the preferred and approved practice since 1986. Exemptions from direct credit (i.e. payment by cheque) were however allowed in certain circumstances. These included remoteness or isolation of the pensioner, inadequate local financial services, language or cultural difficulties or legal/administrative barriers to operating an account.
In 1999 the Commission agreed to abolish the exemption criteria existing at that time, and approved the following two exemption criteria only:
By removing all previous exemptions the Commission Decision resulted in a significant tightening of the rules regarding exemption from direct credit, reflecting the security and cost issues associated with cheque payment. As part of this decision the Commission also requested that a substantial approach be made to existing cheque payees, inviting them to change to direct credit.
Policy changes were not notified
Following a recent enquiry it became evident that the Commission Decision (CM5053 of 21 July 1999) was not properly circulated at the time to service delivery areas, and was also not incorporated within internal policy guidelines.
There is evidence that copies of the Commission Decision may have been made available to State Offices, but a related Departmental Instruction or Stateline was not prepared. Action was not taken at the time to amend the CLIK Policy Library to reflect the more restrictive rules regarding cheque payment.
Policy changes now in production
The CLIK Policy Library, at P11/C5/S3 Exemptions from Payment by Direct Credit has now been amended to include the changes arising out of the Commission Decision.
The contact person is Brian Butler, Income Support and Aged Care Policy, on ext. 16110.
Income Support and Aged Care Group
18 July 2006