C21/1996 EXTENSION OF CARER SERVICE PENSION AND INCOME SUPPORT SUPPLEMENT TO PEOPLE CARING FOR NON-PENSIONERS AND CONTINUATION OF CARER SERVICE PENSION OR INCOME SUPPORT SUPPLEMENT DURING TRANSITION PERIOD

DATE OF ISSUE:  5 MARCH 1996

EXTENSION OF CARER SERVICE PENSION AND INCOME SUPPORT SUPPLEMENT TO PEOPLE CARING FOR NON-PENSIONERS AND CONTINUATION OF CARER SERVICE PENSION OR INCOME SUPPORT SUPPLEMENT DURING TRANSITION PERIOD

PURPOSE

The purpose of this Departmental Instruction is to provide procedural guide-lines and background information on the 1995/96 Budget initiatives that:

• extend eligibility for carer service pension (CSP)) to include a person who cares for a severely handicapped veteran who is not in receipt of a service pension (a non pensioner);

• extend eligibility for the carer stream of Income Support Supplement (ISS) to include a war widow(er) who cares for a severely handicapped person who is not in receipt of income support (a non pensioner); and

• provides for the continued payment of a CSP or the carer stream of ISS, to a carer for 14 weeks after the person requiring care is admitted permanently to an institution.

2.              These initiatives are effective from 20 March 1996.

BACKGROUND

Extension to a carer of a non-pensioner

3.              The Veterans' Entitlements Act, 1986 provides for two types of payment to carers.  There is the CSP (Division 6 Part III) and also one of the eligibility streams of ISS (section 45AB of Part IIIA).

4.              At present a person (the carer) is eligible for these carer payments if:

• the carer provides constant care for a person (the caree) who is a severely handicapped veteran (CSP) or a severely handicapped service pensioner, social security pensioner or income support pensioner (carer stream of ISS) who requires constant care; and

• the carer lives in the same home as the caree, or in an adjacent house; and

• the caree receives a service pension, ISS or a Social Security pension.

5.              The effect of the last requirement above is that carer payment is restricted to situations where the caree must be in receipt of income support from the Department of Veterans' Affairs or the Department of Social Security (DSS).

6.              From 20 March 1996, CSP and carer stream of ISS can also be paid to a person who is caring for a severely handicapped veteran (CSP) or person (ISS) who has been excluded from receiving income support because of their income and assets.  However, in order to ensure that the carer payment correctly targets those in need of financial assistance, an income and assets test, modelled on the Family Payment income and assets tests (see paragraphs 38-49), will be applied to the person requiring care.

Transition Payment

7.              Currently, when a caree is admitted permanently to an institution, the carer's pension is cancelled.  However, where the caree dies, the carer is entitled to receive payment for a further 14 weeks.

8.              From the 20 March 1996, the CSP or carer stream of ISS will continue to be paid to the carer for a period of 14 weeks after the caree is permanently admitted to an institution.  This initiative addresses the above discrepancy by extending the same assistance provided to carers where the caree dies, to carers who cease care due to the caree being permanently institutionalised.

RATIONALE

Extension to a carer of a non-pensioner

9.              There are some people needing care who are not eligible for income support because of their income or assets but whose income is not sufficient to pay for a carer.  Unless adequate support is extended to include carers of this group, there is an increased likelihood that the caree will be institutionalised, thereby imposing a greater cost on the community.

Transition Payment

10.              The continued payment of CSP or carer stream of ISS, following the caree being permanently institutionalised, allows the carer time to adjust to new responsibilities and to prepare for the loss of their income support payment by developing other sources of income.

LEGISLATION

11.              The amendments to the VEA were introduced in the Veterans' Affairs Legislation Amendments (1995-96 Budget Measures) Act (No. 2) 1995.  Royal Assent was received on 11 December 1995.

RELATED LEGISLATION

12.              A related 1995/96 Budget initiative is the removal of the requirement for the carer to live in the same home or in a home adjacent to the caree.  This amendment to the VEA was also introduced in the Veterans' Affairs Legislation Amendments (1995-96 Budget Measures) Act (No. 2) 1995.  This initiative has a commencement date of 1 July 1996 and is the subject of a separate Departmental Instruction.

13.              Changes to the Bereavement Payment (BP) legislation were introduced in Schedule 8 of the Veterans' Affairs Legislation Amendments (1995-96 Budget Measures) Act (No. 2) 1995.  These amendments repeal all current bereavement provisions and replaces them with new provisions in a new Division 12A of Part IIIB.

14.              Changes to the definitions of residing in a nursing home and in residential care were introduced in Schedule 1 of the Veterans' Affairs Legislation Amendments (1995-96 Budget Measures) Act (No. 2) 1995.

EXTENSION OF CSP & CARER STREAM OF ISS TO PEOPLE CARING FOR NON PENSIONERS

ELIGIBILITY CRITERIA

Carer

15.              To be eligible for the CSP or the carer stream of ISS, the carer will still have to respectively satisfy the requirements of sections 39 or 45AB of the VEA, which include the following:

• the application of an income and assets tests;

• personal provision of constant care for a severely handicapped veteran (for SP) or person (for ISS);

• Australian residency.

Care Receiver

16.              Care receiver is defined in ss5Q(1) of the VEA.  To be eligible as a care receiver, the person will need to:

• satisfy the Family Payment (FP) income and asset limits for one child; and

• be an Australian resident; and

• be over 16 years of age; and

• meet the other requirements for a severely handicapped veteran or person as defined respectively in sections 39(3) and 45AB(5) of the VEA.  A medical report to establish the nature and severity of the disability is needed in most cases (see paras 31 and 32 for exceptions).

17.              Please note that the VEA will require amendment to provide that the care receiver is an Australian resident and is over 16 years of age.  Until legislative amendment is obtained, policy requires the care receiver to be an Australian resident and over 16 years of age.

Qualifying service not required

18.              This initiative enables a veteran without qualifying service to be eligible as a
care receiver, providing they meet the other eligibility criteria and satisfy the income and assets tests.

19.              A veteran is defined in s5C of the VEA and includes a Commonwealth veteran, allied veteran or allied mariner.

20.              As an example, a severely handicapped T&PI rate veteran without qualifying service, who was precluded from receiving any type of pension or benefit from DSS because disability pension is income for pension purposes, and whose income/assets are under the FP limits for one child would be eligible as a care receiver (disability pension is not taxable income).  The veteran's partner could receive CSP, providing the couple's combined income/assets are not in excess of the service pension limits (T&PI rate pension is not income for CSP purposes).

PROCEDURES

Claim for Pension

21.              In order to determine the carer's eligibility for pension, certain information is needed to establish whether a care receiver is also eligible.

22.The appropriate claim forms are:

• CSP - forms Claim for Service Pension by a Carer (amended form D505) plus any additional forms depending on circumstances and Statement of Details from a Non Pensioner Care Receiver (new form D552);

• carer stream of ISS - forms Claim for Income Support Supplement by a War Widow or Widower (D529) plus Carer Form (D539) plus any additional forms depending on circumstances and Statement of Details from a Non Pensioner Care Receiver (new form D552).

23.When a person initiates a claim for CSP or carer stream of ISS for the care of a non-pensioner, both the claim form for the carer and the Statement of Detail for the care receiver should be issued together.  The forms should be accompanied by an advice explaining that a decision cannot be made until both sets of completed forms are lodged at the Department.

24.              If the carer claimant requests the forms in a face-to-face meeting, this advice could be given verbally.  If the request is received over the telephone or in writing and the claim forms are posted out to the carer claimant, a standard letter containing this advice should be included.  A sample standard letter is at Attachment A.

25.              If the care receiver is a member of a couple, their partner's income and assets are also taken into account.  The authority to obtain this information from the care receiver is contained in new section 54F of the VEA.

File Recording

26.              All details concerning the carer's claim and the care receiver's claim should be maintained together in the same file:

• if the carer is caring for a veteran, the file will have the veteran's file number;

• if the carer is a war widow/er, the file will retain the deceased veteran's file number.

27.              Where more than one file number is involved, normal cross referencing procedures will apply.

Claim Processing

28.              When all relevant details about the care receiver have been obtained, the claim for CSP should be processed in the normal way, ie manually.  However, a claim for carer stream of ISS can be processed automatically.  In order to pay ISS through the carer stream, it is necessary to record “CA” in the Class field on PP.PI.

29.              See ADVICES section below for sample standard letters for the grant and rejection of claims.

30.              The rate of pension should be determined under the relevant Rate Calculator as specified in section 39N of Part III of the VEA for CSP, and Division 5 of Part IIIA of the VEA for ISS.

Extreme disablement adjustment

31.              Where the veteran is receiving the extreme disablement adjustment (EDA) rate of disability pension, form D.505A, Carer Service Pension Claim, Medical Report, need not be completed.  Sub paragraph 22(4)(c) of the VEA prescribes impairment and lifestyle ratings that would satisfy the requirements of a 'severely handicapped veteran' in section 39(3)(a)&(b) of the VEA.

32.              DI C05/96, MINIMUM AGE SET FOR PARTNER SERVICE PENSION, notified that the Repatriation Commission decided that a partner who is caring for a veteran receiving EDA and who is under 50 years of age with no dependent children, will be considered to automatically satisfy the level of care requirement providing the couple are not living apart.

Domiciliary nursing care benefit

33.              Domiciliary nursing care benefit (DNCB) is a payment administered by the Department of Health and Family Services.  It may be paid to anyone caring for a chronically ill or disabled person over the age of 16 years who would otherwise be admitted to an institution.

34.              The payment is not means tested and is tax free and may be paid to a person who may or may not be in receipt of pension.  The payment is not considered as income when calculating rates of payment for pension purposes.

35.              Claim forms may be obtained from doctors, district nursing organisations or capital city offices of the Department of Health and Family Services.

36.              Receipt of DNCB is an indication of the level of care being provided by the carer to a severely handicapped person.  Eligibility for DNCB is based on a definition of severely handicapped and a level of care test more stringent than we currently use.  Therefore, a carer in receipt of DNCB will pass our level of care requirement.  In addition, the completion of the Carer Service Pension Claim, Medical Report, (form D.505A) will not be required where there is evidence that DNCB is paid to the carer claimant in respect of the non pensioner care receiver.

37.              Claimants not in receipt of this benefit should be advised to test their eligibility.

CARE RECEIVER INCOME AND ASSETS TESTS

38.              Income and asset provisions relating to the eligibility of a care receiver are contained in new Division 11A of Part IIIB of the VEA.

39.              Within this Division a FP child has the meaning as defined in the Social Security Act.  Sections 832 to 836 of the SSA refer.

Income Test

40.              A care receiver will pass the income test if their taxable income is less than the income ceiling.  This ceiling is the amount below which a person with one dependent child receives minimum FP (currently $63,766) and is indexed each January.  The income test generally applies to the taxable income of the care receiver (and their partner) as assessed for the base tax year.  The 'base tax year' is the tax year that ended on 30 June immediately prior to the calendar year in which the relevant carer payday (or date of claim) falls.  For example, if a carer lodged a claim for CSP on 18 April 1996, the relevant base tax year would normally be 1 July 1994 to 30 June 1995.

41.              In some cases a different tax year can be requested and an estimate of taxable income used.  For example, circumstances may have changed significantly from the base tax year to the current tax year, or there is a change of circumstance that is likely to alter the taxable income in the current year.

42.              The income assessed is the person's taxable income for the purposes of the Income Tax Assessment Act, 1936.  Disability pension is not taxable income.  Therefore if the care receiver (including any partner) is receiving a disability pension, ie T&PI, War Widow/er etc., it would not be included in the care receiver's taxable income figure or estimate (if applicable).

43.              The care receiver's claim form requires that their Tax Notice of Assessment for the relevant base tax year is attached.  Please note that normal work practices apply in respect of treatment of Tax File Numbers to ensure the requirements of the Privacy Act are met.

Assets Test

44.              A care receiver passes the assets test if the total value of their assets, plus the assets of any partner and FP children, is less than the asset value below which a person can receive maximum FP (currently $393,750).  The total asset value excludes the value of the family home.  If the value of the care receiver's assets is above the value for maximum FP, they may still meet the assets test if they satisfy certain exemption criteria.  Attachment B provides details of the exemption criteria.  Briefly, under the exemption criteria, if the care receiver's assets are below the FP cut out (currently $584,500) they will satisfy the assets test.  They will still need to satisfy the income test.

45.              Asset values are calculated in accordance with the general principles for asset values that apply to all income support pensions.

46.              If the care receiver:

• disposes of assets and receives no payment, or inadequate payment, for the asset; or

• disposes of assets for the primary purpose of enabling a carer to be eligible for CSP or ISS,

the value of the disposition can be maintained as an asset.  Disposal of assets prior to 9 May 1995 (date of the Budget announcement re this change) are not affected by this provision.

Assets Test Exemption Provisions

47.              If the care receiver's total assets are in excess of the level at which a person can receive maximum FP (currently $393,750), they may still be eligible if a delegate of the Repatriation Commission determines that they are exempt from the care receiver's assets test (new s53AN of the VEA refers).  A request for consideration under the exemption provisions must be in writing and on a form approved by Commission.  Form D552 Statement of Details from a Non Pensioner Care Receiver is an approved form and Question 27 has been included to allow exemption to be considered where requested by the care receiver.

48.              Certain criteria must be met for exemption from the assets test and the relevant information will not always be available on the Statement of Details form.  Where further information is sought in relation to the care receiver's 'liquid assets' or current income, or where a claim for consideration of exemption from the assets test is invited, approved form D552A, Statement of Details from a Non Pensioner Care Receiver, Exemption from the Assets Test should be used.  A sample standard letter for use with this form is at Attachment C.

49.              A care receiver must provide a reasonable estimate of their current income to be considered for exemption from the assets test.  Providing this estimate is accepted by a Delegate of the Repatriation Commission, the care receiver may be exempted from the assets test if the value of their assets, liquid assets and income threshold amount falls into certain groups.  See the reference guide at Attachment D for an income and assets test flowchart for exemption from the assets test.

REVIEW OF DECISION

50.              Under new s57AA of the VEA, the care receiver has the right to request a review of a decision where the delegate has rendered a person ineligible as a care receiver because of the application of ss53AN(1), Exemption from care receiver assets test.  The request must be in writing and provide grounds on which it is based.  The request for a review must be in writing.  The request must also be made within 3 months of the decision being notified to the care receiver.

51.              The carer has the right to request a review under s57 of the VEA if their claim for carer payment is rejected.

NOTIFICATION OBLIGATIONS

52.New sections have been added to the VEA to place similar notification and obligation provisions on the care receiver to those provisions that apply to a person receiving or claiming SP or ISS.  These sections are as follows:

• Section 54D - requires the care receiver to notify the Department of an event or change of circumstance relevant to the payment of a carer payment.  Notifiable events are covered under new section 53AC;

• Section 54E - allows a notice to be given to the care receiver about a matter that is relevant to the carer payment.  Form D552, Statement of Details from a Non Pensioner Care Receiver should be used to obtain the relevant information

• Section 54F - allows a notice to be given to the care receiver that requires them to produce information/documents or appear before an officer of the Department to answer questions, all of which relate to a matter which may affect or relate to a claim for carer payment;

• Section 54G provides that documents served with the s54D notice are part of the notice;

• Section 56H deals with the interpretation of the definitions of care receiver obligations.

CANCELLATION

53.              The date of effect of cancellation decisions for CSP or carer stream ISS relating to taxable income of the care receiver is contained in two new sections ie:

• where notification obligations are met - section 56BB of the VEA; and

• where obligations are not met - section 56BC of the VEA.

54.              The date of effect of cancellation for any other reason is covered in existing provisions.

OVERPAYMENTS

55.              Overpayment of CSP or carer stream of ISS arising because of:

• an underestimate of the care receiver's income; or

• an amendment of an assessment of the care receiver's taxable income; or

• the care receiver not informing the Department of the occurrence or likely occurrence of a notifiable event,

are not a debt due to the Commonwealth unless it was reasonable for the carer to know of the situation that led to the debt.

56.              Because the care receiver's affairs may not be known to the carer, it is not reasonable in all cases to raise a debt against the carer due to the act or omission of the care receiver.

57.              Should the possibility of such an overpayment arise, previous file records may provide some indication as to the carer's knowledge of the care receiver's affairs.  Unless there is some definite indication of the carer being involved in the care receiver's financial affairs, the raising of a debt should not be considered.

58.              If consideration is given to raising the debt, the carer should be advised of the provisions of subsection 205(1AA).  If the carer is able to show that it was not reasonable for them to know the circumstances that led to the overpayment, no debt should be raised.

59.              Debts arising because of the carer not complying or fulfilling their obligations are covered by existing provisions.

CONTINUATION OF CSP OR ISS DURING TRANSITION PERIOD

PERSON RECEIVING CARE ADMITTED TO AN INSTITUTION

60.              Institution means 'residing in a nursing home' as defined in new ss 5N(8) of the VEA and 'in residential care' as defined in new ss 5NAA(2) of the VEA.

61.              Where a caree is admitted permanently to an institution, the carer can continue to receive pension for 7 paydays after the date they would have ceased to be eligible due to their ceasing care.  New Division 12B of Part IIIB of the VEA provides the legislative basis for continuing the carer payment.

62.              The admission to the institution should be permanent.  This means that based on available evidence, the admission will continue for the foreseeable future.  A caree who is admitted to a hospital for an operation or procedure and who is expected to return home in the near future could not be considered to have been permanently institutionalised.

NOTIFICATION

63.              It would normally be expected that the Department would be advised of the admission to the institution by the carer or the caree, in accordance with their notification obligations.  Alternatively, advice may be received from the institution following the admission of the caree.  It will be necessary to verify as per existing work practices that the admission is permanent.  If the admission is not permanent, respite provisions should be considered.

DATE OF EFFECT FOR THE COMMENCEMENT OF TRANSITION PAYMENT

64.              The date of effect for commencement of transition payment should be the date of cancellation of SP or ISS that would apply but for the transition payment.  For example:

• if the carer advises the Department that the caree will be admitted permanently to an institution from a future date, CSP or ISS ceases from the payday following admission.  The carer will receive 7 further payments from that payday.

• If advice is received after admission, the carer is eligible for the 7 further payments from the payday following admission.

• Should advice be received outside the 7 payment period, it will be necessary to look at the obligation provisions and establish if any excess payment is a debt.

65.              The cancellation date for manual cases and the carer stream of ISS system cases will in effect be the end date of the transition period.  Normal work practices apply for giving effect to the cancellation date.

RATE OF TRANSITIONAL PAYMENT

66.              The rate of CSP or ISS is assessed having regard to the carer's actual circumstances.  The rate payable during the transition period may be different to the rate paid to the carer prior to the caree being permanently admitted to an institution.

67.              If the carer and the caree were a member of a respite care couple prior to admission, the partner rate is paid to the carer during the transition period.

ASSISTANCE TO CARER

68.              When the caree is permanently admitted to an institution, the carer should be contacted as soon as possible and advised of their eligibility for the transition payment.  See Attachment E for a sample standard letter for this purpose.

TRANSFER TO ANOTHER PENSION OR BENEFIT

69.              If the carer is eligible for another type of pension or benefit when the caree is permanently admitted to an institution, they can elect to receive this pension or benefit.  However, they are not entitled to receive the transition payment and another pension or benefit at the same time.

BEREAVEMENT PAYMENTS

70.              All bereavement provisions are now contained within a new Division 12A of Part IIIB of the VEA.  The commencement date of the new provisions is 1 January 1996.

71.              BP during the transition period is only a consideration if the former caree was an income support pensioner when they died.  This excludes BP in respect of care receivers.

Death of the former caree

72.              If the former caree dies after beginning to reside in an institution, including during the 7 fortnights of the transition payment period, subsection 53X(6) provides that the former carer is not entitled to BP.  Therefore the former carer cannot receive BP as a carer as well as the transition payment.

73.              However, if the former carer is the partner of the former caree, under new section 53P of the VEA they are entitled to a BP (of one instalment of the deceased pensioner's pension) as the non-pensioner partner of a deceased pensioner.  The amount of BP is specified in new section 53Q of the VEA.

Death of the former carer

74.              If the former carer dies during the 7 fortnights of the transition payment period, subsection 53X(5) of the VEA provides that the former caree is not entitled to a bereavement payment because of the former carer's death.

ADVICES

75.Several new standard letters are required for these initiatives.  The scenarios that need to be covered are:  Care receiver

• Advice of rejection of eligibility as a Care Receiver: Income/Assets in excess; not severely handicapped; not needing level of care. Attachment F

• Advice of rejection of eligibility as Care Receiver: No exemption from assets test; assets in excess. Attachment G

• Advice of grant of eligibility as Care Receiver (normal I&A test). Attachment H.

• Advice of grant of eligibility as Care Receiver (exemption from assets test). Attachment J

Carer

• Rejection of claim as a carer because care receiver not eligible. Attachment K

• Transition payment eligibility.

ATTACHMENTS

76.The following attachments are provided:

• A              Letter to carer re:  care receiver statement of details

• B              Assets test exemption criteria

• C              Sample standard letter to care receiver re:  assets test exemption application

• D              Income and assets tests flowchart.

• E              Sample standard letter to carer re:  transition payment

• F              Sample standard letter to care receiver re:  rejection

• G              Sample standard letter to care receiver re:  rejection of assets test exemption

• H              Sample standard letter to care receiver re:  eligible through normal I&A tests

• J              Sample standard letter to care receiver re:  eligible through exemption from assets test

• K              Sample standard letter to carer re:  rejection:  care receiver not eligible

ENQUIRIES

77.Any questions regarding this DI should be directed to the Policy Implementation Unit, South Australia:

Robyn Del Casale — Assistant Director(08) 213 2321 (LAN S-B-PI-1
Sue Burne — Project Officer(08) 213 2656(LAN S-B-PI-2)
Kathi Ashman — Project Officer(08) 213 2409(LAN S-B-PI-3).

W R MAXWELL

DIVISION HEAD