Reasons the standard calculation formula may not apply
It is possible for a person whose marital status has remained the same throughout the overall qualifying period to either:
- defer more than one pension during that period, or
- defer the same pension throughout the whole period but claim a different pension from that deferred.
Note: In these cases the standard formula will not apply.
Person changes pension being deferred during overall qualifying period
This may occur where a person who has been deferring age pension or service pension becomes a war widow/widower during the overall qualifying period, but without changing their marital status. That is, a person who was already widowed, but had not claimed war widow's/widower's pension at the time.
Person claims different pension from the one deferred
It is possible for a person who has not changed their marital status throughout the overall qualifying period, to claim a different pension from the one deferred. For example, a person is deferring age pension, becomes a war widow/widower and immediately claims income support supplement (ISS).
In either case, apply the following formula to calculate the total pension bonus:
apportioned amount X pension multiple X no. of years in overall qualifying period
The resulting figure is to be rounded to the nearest 10 cents (with 5 cents being rounded up).
Apportioned amount
The apportioned amount is:
period not a war widow/widower / no. of days in overall qualifying period X provisional payment rate
+
period a war widow/widower / no. of days in overall qualifying period X annual pension rate
Provisional payment rate
For the purpose of calculating the apportioned amount, the provisional payment rate is:
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If the person has for some or all of the overall qualifying period... |
Then the provisional payment rate is... |
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deferred age service pension (not subject to a ceiling) or partner service pension and the person is not permanently blind |
the person's provisional payment rate under method statement 1 in SCH6-A1(2) as at the date of grant, if it were assumed that the person's maximum payment rate (Step 4) were their maximum basic rate (MBR) + pension supplement basic amount. VEA →EA→
SCH6-A1(2) of VEA |
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deferred age service pension (not subject to a ceiling) or partner service pension and the person is permanently blind |
MBR + pension supplement basic amount as at the date of grant. |
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deferred age pension and the person is not permanently blind |
the person's provisional annual payment rate under the method statement in point 1064-A1 of the SSA as at the date of grant, if it were assumed that the person's maximum payment rate (Step 4) were their MBR + pension supplement basic amount More →ore→
Social Security Act 1991 – Section 1064-A1 Pension Rate Calculator A http://www.comlaw.gov.au/comlaw/management.nsf/lookupindexpagesbyid/IP200401781?OpenDocument |
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deferred age pension and the person is permanently blind |
MBR + pension supplement basic amount under the SSA as at the date of grant. |
Example of pension bonus calculation – change in pension deferred
Mrs Glover has been deferring age pension since 3 December 2004. Her husband, who was a veteran, died in 199 — 6 but she did not claim war widow's pension until October 200 — 9. She became a war widow from 3 October 200 — 9.
Initially Mrs Glover thought she would continue working and deferring pension, so she registered for the DVA pension bonus scheme. Her registration was dated from 3 October 200 — 9. However, she soon realised that because of the war widow's pension she could afford to stop working and claim ISS. She was granted ISS from 14 November 200 — 9. At the time of grant Mrs Glover has in her assessment $75,000 in asset — s, $200.00 per fortnight in ordinary income (including deemed income) and a total of $724.70 adjusted income (including war widow/widowers pension (WWP) of $524.70) per fortnight. She also owned her own home.
The following steps are required to calculate her bonus:
(All rates are as at 20 September 2009).
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Step |
Action |
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1 |
her provisional payment rate in respect of the deferred age pension is: MBR (annual rate) $635.40 x 26 = `$16,520.40 less income test reduction ($724.70 income less income free area (IFA) of $1 — 42 X 5 — 0% x 26)$7,575.19 $8,945.30 |
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2 |
her annual pension rate at date of grant of designated pension (ISS) is: $5,265.00 (ISS ceiling rate of $202.50 x 26) |
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3 |
her periods of accrual were:
Her overall qualifying period is 1807 days. |
|
4 |
the apportioned amount is: period not a war widow/widower / overall qualifying period X provisional payment rate + period a war widow/widower / overall qualifying period X annual pension rate = 1765 ÷ 1807 X $8,945.30 + 42 ÷ 1807 X $5,265.00 = $8,737.38+ $122.37 = $8,859.76 |
|
5 |
pension bonus is: $8,859.76 X 0.094 X 4.951 X 4.951 = $20,411.80 (rounded) |