A person's rate of service pension [2] or ISS [2] is based on a number of factors, including:
(Note: service pension assesses ordinary income, whilst ISS assesses adjusted income)
and whether the pensioner:
The rate of service pension may also be affected by whether the pensioner is a war widow/widower-pensioner [2].
More ? [3]
Unless a person is permanently blind, the amount of service pension or ISS payable to a person depends on their income and assets. If the person is a member of a couple [2], their pension is calculated using 50% of the combined income and assets of the couple, regardless of which member of the couple actually receives the income or owns the assets.
More ? [4]
From 20 September 2009, the income test taper rate increased from 40 cents to 50 cents per fortnight (from 20 cents to 25 cents each for couples). The additional income free area for dependent children was also removed and no longer forms part of the calculation of a person's income free area.
The entitlements of existing pensioners whose pension would be reduced because of the income test changes, will be paid under the transitional rules. The transitional rules will ensure that these pensioners stay on the 40 cents taper and have access to the additional child income free area (if applicable) until such time as the standard rules provide a higher rate of pension.
When pensioners move from the transitional rules to the standard assessment rules, they cannot return to the transitional rules even when their circumstances change and they would again be better off under the transitional rules. The only exception is temporary assessment as a respite care couple.
More ? [5]
The rate of service pension and ISS is calculated on an annual basis, converted to a daily amount, and then paid in fortnightly instalments. The amount payable on a pension payday [2] is the total amount payable for the days in the pension period [2] during which the pension was payable.
Once the pension rate has been assessed, a number of minor adjustments may be made to the rate. The amount payable may also be reduced because of advance payments or overpayments.
More ? [6]
There is a specific order of reduction set out in the VEA [2]. This is so the taxable component of service pension or ISS is reduced by the income or assets test (or the maintenance income [2] test in the case of saved children [2]) prior to any of the non-taxable allowances. The order of reduction of payments depends on the:
A service pension is an income support payment broadly equivalent to the social security age and disability support pensions. It may be paid once a veteran or partner has reached the nominated age or is incapacitated for work.
ISS is an income support payment that may be paid to eligible war widows and widowers under the VEA and persons receiving wholly dependent partners' compensation under the MRCA, and who satisfy the means tests. It is an indexed rate, increased twice-yearly in March and September in line with changes to the cost of living and/or average wages. Income Support Supplement (ISS) legislation commenced on 20 March 1995. It is a payment created to replace the ceiling rate income support age, carer, wife and disability support pensions, paid to war widows/widowers by Centrelink.
According to section 5H of the VEA [18] income is:
An asset means any property, including property outside Australia.
A person's 'partner' is someone who is a member of a couple with that person.
Section 5F(1) of the VEA defines dependent child as having the same meaning as in the Social Security Act 1991. For income support purposes, dependent child is defined as:
Child under 16 years
A child under 16 years cannot be considered a dependent child if:
Child 16 years or older
A young person who has turned 16 years but is under 22 years can still be a dependent child of the pensioner if:
A child over 16 years cannot be considered a dependent child if:
Income includes earning from casual, part-time or full-time earnings.
Note: the meaning of a dependent child for DVA income support pension purposes is not the same as the meaning for Family Tax Benefit purposes.
A remote area is defined as one of the following:
-Macquarie Island,
-Norfolk Island,
-The Territory of Heard Island and McDonald Islands,
-The Australian Antarctic Territory,
-The Territory of Cocos (Keeling) Islands,
-The Territory of Christmas Island, and
-Lord Howe Island,
A person may be regarded as permanently blind in both eyes where:
The Commission Guideline CM5829: Determining 'permanently blind', 'no useful sight' and 'blinded in both eyes' [22]may be instructive in making a blinded/blindness determination.
War widow/widower — pensioner means a person who is receiving a war widow's/widower's pension [2] from the Australian Government.
According to Section 5E(2) [23]of the VEA [23]a person is a member of a couple, if they are:
The term “partnered” is also commonly used.
Commencing from the Thursday falling on 11 July 1991, DVA pension payday falls on each succeeding alternate Thursday. Refer to the fact sheet IS144 [24]Pension Paydays, Allowance Payment Dates & Pension Periods [24]for a listing of these days.
According to subsection 5Q(1) (b), of the VEA a pension period is a period of two weeks that starts two days before a payday (i.e. Tuesday) and ends two days before the next payday (i.e. close of business Monday).
Veterans' Entitlements Act 1986.
According to subsection 5K(1) of the VEA [23], maintenance income in relation to a person, means:
but does not include disability expenses maintenance.
From 1 January 1998 responsibility for administration of most income support child related payments was transferred to Centrelink [2]. However, saving provisions allow any person in receipt of service pension [2] or income support supplement [2] on 31 December 1997 who would be or is financially disadvantaged by the transfer to continue having their child related payments paid by DVA [2]. Saved children are assessed under the rules contained in the VEA as at 31 December 1997.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16020%23comment-form
[2] https://clik.dva.gov.au/%23
[3] https://clik.dva.gov.au/book/export/html/16020#tgt-cspol_part9_ftn1
[4] https://clik.dva.gov.au/book/export/html/16020#tgt-cspol_part9_ftn2
[5] https://clik.dva.gov.au/book/export/html/16020#tgt-cspol_part9_ftn3
[6] https://clik.dva.gov.au/book/export/html/16020#tgt-cspol_part9_ftn4
[7] https://clik.dva.gov.au/book/export/html/16020#tgt-cspol_part9_ftn5
[8] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/91-income-and-assets-test-principles/912-assessment-process
[9] https://clik.dva.gov.au/book/export/html/16020#ref-cspol_part9_ftn1
[10] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/91-income-and-assets-test-principles/913-income-and-assets-tests
[11] https://clik.dva.gov.au/book/export/html/16020#ref-cspol_part9_ftn2
[12] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/924-care-assessment-rules/respite-care
[13] https://clik.dva.gov.au/book/export/html/16020#ref-cspol_part9_ftn3
[14] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/91-income-and-assets-test-principles/914-application-assessed-rate-pension
[15] https://clik.dva.gov.au/book/export/html/16020#ref-cspol_part9_ftn4
[16] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/91-income-and-assets-test-principles/915-order-reduction
[17] https://clik.dva.gov.au/book/export/html/16020#ref-cspol_part9_ftn5
[18] http://clik/health-procedure-library/health-information-and-management-notes-himn/vhc/072014-vhc-veterans-home-care
[19] https://clik.dva.gov.au/book/export/html/16020#tgt-SSA_ftn1
[20] http://www.comlaw.gov.au/Series/C2004A04121
[21] https://clik.dva.gov.au/book/export/html/16020#ref-SSA_ftn1
[22] http://clik.dva.gov.au/compensation-and-support-reference-library/commission-guidelines/cm5829-determining-permanently-blind-no-useful-sight-and-blinded-both-eyes#
[23] http://www.comlaw.gov.au/Series/C2004A03268
[24] http://factsheets.dva.gov.au/factsheets/