Last amended: 5 March 2013
VEA → [2]
The following table shows the steps involved in the overall service pension rate calculation process for a person who is:
Step | Action |
1 | Determine the person's maximum basic rate of service pension. VEA → [4]
|
1A | Work out the amount of pension supplement VEA → [5]
|
1B | Determine the amount of energy supplement [3] |
2 | Determine the amount per year (if any) of rent assistance. More → [6]
|
4 | Add the amounts from steps 1, 1A, 1B and 2 to give the maximum payment rate. |
5 | Calculate any reduction for ordinary income [3]. More → [7]
|
6 | Deduct income reduction from the maximum payment rate to give the income reduced rate. |
7 | Calculate any reduction for assets. More → [8]
|
8 | Deduct assets reduction from the maximum payment rate to give the assets reduced rate. |
9 | Compare the income reduced rate and the assets reduced rate: the lower of the two rates is the provisional payment rate. (If the two rates are equal, the income reduced rate is used). |
10 | Determine the amount per year (if any) of remote area allowance [3]. More → [9]
|
11 | Add any amount obtained in step 10 to the provisional payment rate. The result is the person's rate of service pension. |
Note: current rates are found in the Reference Library.
More → [10]
The above rate calculation process is the standard process for service pensioners.
VEA → [11]
Transitional arrangements protect pensioners who were in payment immediately before 20 September 2009 and whose pension would be reduced under the standard rules [3]. The process for the calculation of pension in these cases is:
The provisional payment rate calculated under the transitional arrangements applies until such time as the standard rules provide a higher rate of pension.
This is for historical reference only.
VEA → [13]
Where a person has saved children [3], the steps set out above for service pension calculation are modified, as follows:
Since 1 January 1998, it has not been possible for any new dependent child to be a saved child [3], unless the claim was lodged on or before 31 December 1997.
Prior to 1 October 1995, if a pensioner's partner was not in receipt of a pension or benefit, the non-partnered maximum basic rate was used to calculate their pension. After that date, the pension of a person with a non-pensioner partner was calculated using the partnered rate.
VEA → [20]
A savings provision protected those partnered pensioners whose pensions were, immediately before 1 October 1995, calculated using the non-partnered maximum basic rate. The effect on the calculation of pension in these cases is:
When the saved rate of pension equals the rate that would apply if the pensioner were assessed at the partnered rate, the savings provision cease to apply and the assessment reverts to a normal partnered assessment.
Circumstances in which the partner would not be receiving a pension are:
The table below lists service pension rate calculation processes used for other pensioners, and provides a link to the relevant calculators in the VEA.
To calculate the rate of service pension for a person who is... | click on the corresponding icon below. |
| VEA → [21]
|
Both:
| VEA → [22]
|
| VEA → [23]
|
Saving provisions applicable to the amendments relating to amounts in respect of children
Schedule 5, Clause 10 [43] of VEA
Saving provisions applicable to certain people who cease to be service pensioners on 1 January 1998
Schedule 5, Clause 11 [44] of VEA
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' [54]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 [3] from the Australian Government.
The energy supplement is a fortnightly or quarterly payment designed to help recipients meet the cost of electricity and gas bills.
The ordinary income of a person for a period means, as described in section 46 of VEA [55], the gross ordinary income from all sources for that period without any reduction, other than a reduction of business income.
Remote area allowance is a supplementary payment added to the rate of income support pension where the pensioner's usual place of residence is situated in a remote area, and where the pensioner is physically present in the remote area.
Rules introduced as part of the Secure and Sustainable Pension Reforms that came into effect on 20 September 2009. For income and assets test purposes the changes include:
From 1 January 1998 responsibility for administration of most income support child related payments was transferred to Centrelink [3]. However, saving provisions allow any person in receipt of service pension [3] or income support supplement [3] on 31 December 1997 who would be or is financially disadvantaged by the transfer to continue having their child related payments paid by DVA [3]. Saved children are assessed under the rules contained in the VEA as at 31 December 1997.
Dependent child add-on is an amount which is included in a person's service pension or ISS [3] where that person has saved children [3].
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.
Guardian allowance is included in the calculation of a person's service pension or ISS [3] where that person has a saved child and where that person is either not a member of a couple [3] or is a illness separated couple [3] or respite care couple. [3]
Rent Assistance is an allowance which may be paid to a service pensioner, income support supplement (ISS) or veteran payment recipient to assist in meeting the cost of rental accommodation.
To receive rent assistance a pensioner must be paying rent (other than Government rent) for accommodation in Australia, and the amount paid must exceed a certain threshold.
Disability compensation payment (known before 2022 as disability pension), for the purposes of service pension, income support supplement and veteran payment, means:
Please note that the Disability Compensation Payment is legally a pension by way of compensation under the VEA so that concessional benefits under state, territory and local government legislation to pensioners/pensions under the VEA are not denied.
From 1 January 1998 responsibility for administration of most income support child related payments was transferred to Centrelink [3]. However, saving provisions allow any person in receipt of service pension [3] or income support supplement [3] on 31 December 1997 who would be or is financially disadvantaged by the transfer to continue having their child related payments paid by DVA [3]. Saved children are assessed under the rules contained in the VEA as at 31 December 1997.
Indexation is the action of adjusting pension and allowance rates, limits and thresholds to maintain their value against increases in the cost of living and average earnings.
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.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16105%23comment-form
[2] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn14
[3] https://clik.dva.gov.au/%23
[4] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn15
[5] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn16
[6] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn17
[7] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn18
[8] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn19
[9] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn20
[10] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn21
[11] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn22
[12] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn23
[13] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn24
[14] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn25
[15] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/94-children
[16] https://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/51-rent-assistance/513-payment-rent-assistance
[17] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/106-maintenance-income
[18] https://clik.dva.gov.au/compensation-and-support-reference-library/payment-rates/historical-payment-rates
[19] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn25
[20] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn26
[21] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn27
[22] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn28
[23] https://clik.dva.gov.au/book/export/html/16105#tgt-cspol_part9_ftn29
[24] clik://LEGIS/VEA/Point SCH6-A1
[25] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn14
[26] clik://LEGIS/VEA/Module B/Part 2/schedule 6
[27] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn15
[28] clik://LEGIS/VEA/Module BA/Part 2/schedule 6
[29] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn16
[30] https://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/51-rent-assistance
[31] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn17
[32] 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
[33] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn18
[34] 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/assets-test
[35] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn19
[36] https://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/52-remote-area-allowance-raa
[37] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn20
[38] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn21
[39] clik://LEGIS/VEA/Part 5/schedule 5
[40] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn22
[41] clik://LEGIS/VEA/section 31/schedule 5
[42] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn23
[43] clik://LEGIS/VEA/section 10/schedule 5
[44] clik://LEGIS/VEA/section 11/schedule 5
[45] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn24
[46] clik://LEGIS/VEA/section 1/schedule 5
[47] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn26
[48] clik://LEGIS/VEA/point SCH6-A1(3)/Schedule 6
[49] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn27
[50] clik://LEGIS/VEA/point SCH6-A1(5)/Schedule 6
[51] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn28
[52] clik://LEGIS/VEA/point SCH6-A1(4)/Schedule 6
[53] https://clik.dva.gov.au/book/export/html/16105#ref-cspol_part9_ftn29
[54] http://clik.dva.gov.au/compensation-and-support-reference-library/commission-guidelines/cm5829-determining-permanently-blind-no-useful-sight-and-blinded-both-eyes#
[55] http://www.comlaw.gov.au/Series/C2004A03268
[56] https://clik.dva.gov.au/book/export/html/16105#tgt-SSA_ftn1
[57] http://www.comlaw.gov.au/Series/C2004A04121
[58] https://clik.dva.gov.au/book/export/html/16105#ref-SSA_ftn1