C19/2008 Extension of Income Support Supplement (ISS) eligibility

Purpose

The purpose of this Departmental Instruction is to inform staff of extension to Income Support Supplement (ISS) eligibility and the associated changes to the Consolidated Library of Information and Knowledge (CLIK) and information products.

Background

From 1 July 2008, all Australian war widow/ers including MRCA wholly dependent partners are eligible for ISS if they satisfy the income and assets tests.  It is no longer necessary to be of qualifying age, have a dependant child, be permanently incapacitated for work, or be the partner of an income support recipient, to be eligible for ISS.

Legislation

The legislative amendments to extend ISS to all Australian war widow/ers regardless of age are contained in Schedule 2 of the Veterans' Entitlements Amendment (2007 Election Commitments) Act 2008  (the Act) which received Royal Assent on 25 June 2008.

Qualifying age

While the new measure means there is no longer any age restriction on eligibility for ISS, qualifying age remains relevant for accessing particular schemes and certain mean-test rules, such as:

• eligibility to defer ISS under the Pension Bonus Scheme;
• eligibility for ISS recipients to participate in the pension loans scheme;
• compensation recovery rules for ISS recipients; and
• exemption of superannuation managed investments from the income and assets tests for ISS recipient — s.

ISS Invalidity

War widow/ers may still apply to be granted ISS (Invalidity) on the grounds of being permanently incapacitated for work.  There are no changes to the criteria or procedures for these cases.  ISS (Invalidity) is a non-taxable payment if received by a war widow/e — r who is under age pension age.

Previously deferred cases

ISS claims which have been identified under the pre-eligibility claims process outlined in a DI C07/2008 will now be re-assessed to grant ISS with effect from1 July 2008.

War widow/ers under qualifying age who have lodged a claim for ISS may now be granted ISS with effect from 1 July 2008 through PIPS.

Mailout to under age war widow/ers

Invitation letters and claim forms have been sent to 1,364 war widow/ers who do not currently receive ISS to inform them of the extension.  The mailout included under age war widow/ers who did not have an outstanding ISS new claim, or have had an ISS new claim processed since 9 April 2008.   (Cases processed after this date were subject to the arrangements for pre-eligibility claim identification.)

Receipt of claim by DVA

As the Act does not contain backdating provisions, payments can only commence from:

• the date the claim is lodged, or
• the date on which the war widow/er registered their intention to claim ISS and this was followed by a formal claim within 3 months.

For war widow/ers who became eligible for ISS under this initiative, the earliest date of grant is 1 July 2008.

PIPS changes

PIPS Worksheets created with an Effective Date on or after 1 July 2008 will allow only two selections in the Adult Details screen for Pension Type/Class field in relation to ISS:

• ISS – Age  -  should be selected in all cases, regardless of the age of the war widow/er, who are not granted ISS on the basis of invalidity.
• ISS – Invalidity  -  should be selected only for cases granted ISS on the basis of invalidity.

Existing additional ISS Pension Type/Class selections will remain available for PIPS Worksheets with an Effective Date prior to 1 July 2008.

Existing Information Messages for war widow/ers under qualifying age will also remain available for PIPS Worksheets with an Effective Date prior to 1 July 2008.  There will be no messages produced relating to ISS eligibility based on the age of the war widow/er for PIPS Worksheets with an Effective Date on or after 1 July 2008.

Interactions with grants of war widow's pension

Changes to DPS have been promoted to grant ISS to war widow/ers under qualifying age who were in receipt of partner service pension and where the date of grant of war widow/er's pension is on or after1 July 2008.

No changes have been made to CCPS at this stage.  Changes will be made to CCPS to grant war widow's pension and income support supplement to claimants under qualifying age who previously received partner service pension as part of the next scheduled release.

Grants of war widow/er's pension through DPS and CCPS that take effect prior to 1 July 2008 for war widow/ers who are:

• under qualifying age; and
• were receiving partner service pension

will require manual action.

Procedural guidelines regarding the processing of these cases will be issued to Bereavement Units and relevant VC staff.  The manual action will ensure ISS is granted from 1 July 2008, allow for any necessary adjustment to the bereavement payments and replace the duplicate automatic advice with a consolidated standard letter to be issued to the war widow/er.

Fact sheets

The fact sheets listed below have been updated to reflect the changes to the eligibility for ISS:

IS03 – Income Support Supplement Overview

IS04 – How to Claim Income Support Supplement

IS46 – Income Support Supplement

Policy updates – CLIK

The key policy reference for this topic is CLIK Policy Library P3/C2 – Income Support Supplement (ISS) Eligibility.  The chapter has been amended to remove the obsolete eligibility criteria.

References to qualifying age and pension age in the CLIK Policy Library have also been reviewed to clarify how they relate to particular entitlements and pension assessment rules.

Forms

The approved forms and related booklet which have been amended for this initiative are:

D529 Claim for Income Support Supplement Part A – Eligibility;

D529B About Claiming Income Support Supplement; and

D2663 Claim for Pension by a Widow, Widower or other Dependant of a Deceased Veteran.

Standard Letters

Changes have been made to the following standard letters under the New Claim tab:

ISS Under Age pre 1 July 2008 - removed

ISS New Claim reject - removed

ISS – reject Invalidity – new

Contact

Any queries should be directed to Elaine Tse, Income Support Policy Implementation, on ext 16011, or David Turner, Income Support Service Delivery, on ext 27619.