Definition of non-accruing membership
Non accruing membership – Commission's discretion
Section 45TO VEA
Under the VEA, non-accruing membership status is given for a specified time when a person:
- triggers a disposal preclusion period,
- triggers a carer preclusion period by receiving either carer payment from Centrelink or ISS as a carer, or
- is a specified kind of non-accruing member, as declared by the Commission in a legislative instrument made under section 45TO VEA.
While the work test does not apply during non-accruing membership, a person's PBS membership is not automatically non-accruing if they cannot meet the work test. Non-accruing membership applies only in specified circumstances, during which the person remains a member of the scheme but cannot add to their bonus periods.
Impact of non accruing membership on accrual
During periods where a person is a non-accruing member of the pension bonus scheme [glossary:(:]PBS[glossary:):], the person is still a member of the scheme but does not accrue a bonus. Periods of accruing membership are considered to be continuous provided they are connected by unbroken periods of non-accruing membership. This means that if a member is:
- an accruing member of the scheme,
- triggers a non-accruing period, and
- becomes an accruing member at the end of that non-accruing period,
the non-accruing period, in effect, did not exist. However, no bonus accrues during the non-accruing period.
Disposal preclusion period
Section 45TN(1) VEA – Non-accruing membership—disposal preclusion period
Section 45UT VEA – Disposal preclusion period—dispositions before 1 July 2002
Section 45UTA VEA – Disposal preclusion period—dispositions on or after 1 July 2002
If a person or their partner disposes of assets to a value sufficient to become assessable under the deprivation rules, the person and their partner are subject to a disposal preclusion period. This period begins on the first day an amount would be included in the assessment because of the disposal, and ends five years from that date. If there are a number of disposals, it is possible for one 5-year period to overlap or follow another. During this period or periods, they are non-accruing members of the pension bonus scheme. After the 5 year disposal preclusion period has ceased, and the person is not yet a post 70/75 member, they may be able to revert to accruing membership of the scheme.
Disposal preclusion period – change of marital status
If a person ceases to be a member of a couple for any reason, and they are subject to a preclusion that took place wholly because of the disposal of a particular asset by their partner, their disposal preclusion period ends.
Disposal preclusion period – consideration subsequently received
If a person who disposes of assets on or after 1 July 2002 subsequently receives full or partial consideration for the disposal and consequently would no longer have a deprived asset in their pension assessment according to Subdivision BB of Division 11 of Part IIIB of the VEA, their disposal preclusion period will cease.
A person who disposed of assets prior to 1 July 2002 will remain in a disposal preclusion period for 5 years from the date of disposal of assets regardless of whether they later receive consideration for the disposal.
Carer preclusion period
Section 45TN(2) VEA – Non-accruing membership—carer preclusion period
Section 45UU VEA – Carer preclusion period
A person is in a carer preclusion period throughout the period for which they receive one of the following:
- a carer payment, or
- carer service pension, or
- an income support supplement payable under sub-clause 8(3) of Schedule 5 of the VEA.
During this period the person is a non-accruing member of the pension bonus scheme.
Compensation preclusion period generally does not apply to DVA scheme
Because compensation recovery rules under the VEA only apply to those under pension age, a compensation preclusion period would not generally apply to people participating in the pension bonus scheme at DVA.
Compensation preclusion period – Centrelink scheme
If a person who has been deferring age pension becomes a war widow/widower and subsequently claims pension bonus, any bonus period(s) they accrued under the Centrelink scheme may be included in the calculation of their bonus. If that person would have been subject to a compensation preclusion period while deferring age pension, they would have been subject to a non-accruing period for that time.
Section 93V of the Social Security Act
http://www.comlaw.gov.au/comlaw/management.nsf/lookupindexpagesbyid/IP200401781?OpenDocument
Non-accruing membership – Commission's discretion
The Commission has declared by legislative instrument certain kinds of members are non-accruing members. These include a PBS member who:
Legislation Library – Income Support – Pension Bonus
VE-DECLARATION/2007-Pension Bonus Scheme-Non‑accruing Member — s
- is a participant in the community development employment project (CDEP), or
- is in prison, or
- is in psychiatric confinement because they have been charged with committing an offence, or
- is not working but has a working partner, who is not yet a member but intends to be a member of the pension bonus scheme at DVA or Centrelink.
The person is a non-accruing member for as long as they meet one of the above descriptions.
Non-working partner
If the person is a member of the scheme who relies on their partner's work to meet the work test, then they are non-accruing members and cannot accrue bonus periods until such time as their working partner qualifies for a designated pension and registers as a member of the scheme.
Non-accruing membership with maximum periods
A person's membership of the scheme can also be non-accruing if the member would otherwise fail the work test because of the following circumstances/event:
|
Circumstances/event |
Duration of non-accruing membership |
|
Member's partner dies |
Up to a maximum period of 13 weeks from the date of death |
|
Prior to 1 January 2008, the person takes a continuous period of sick leave of at least 4 weeks |
Up to a maximum of 26 weeks |
|
On or after 1 January 2008, the person takes any paid leave or unpaid leave from employment (or any combination of leave types) |
Up to a maximum of 26 weeks |
|
On or after 24 August 2006, the person suffered a reduction in the amount of gainful work they performed because of a major disaster as defined in section 23 of the Social Security Act 1991 |
Up to a maximum of 13 weeks |
|
On or after 1 March 2006, the member suffered a reduction in the amount of gainful work performed because of Cyclone Larry |
Up to a maximum of 13 weeks |
|
Member receives compensation |
Up to a maximum period equivalent to the preclusion period that would apply if:
|
Leave from employment
Leave from employment covers all paid and unpaid leave where the PBS member's employment is not terminated and a return to the same employer is expected after their period of leave, or where the person's employment does not terminate until after the leave is taken. This includes self-employed members who will return to self-employment after their leave.
Treating periods of leave as non-accruing membership from 1 Jan 2008
If a member is already on leave as at 1 January 2008 the start of the 26 week limit on non-accruing membership for leave will start on the date that the member commenced leave.
Membership status after non-accruing period
At the end of a non-accruing period, the person's membership will revert to be accruing and they must pass the work test to remain in the scheme. A member must have a period of accruing membership between any periods of leave that are treated as non-accruing membership if they do not wish to exit the scheme.