Last amended: 23 March 2010
The income stream [2] provisions have no general saving provisions. This means that all income streams are assessable under the current legislation unless an exemption has been granted.
VEA ? [3]
The Minister has the power to exempt a pensioner from the current income stream assessment rules if the pensioner:
A decision on whether a person has entered into a binding arrangement is determined by a delegate of the Commission. Only if a case satisfies this criterion should consideration be given to seeking a ministerial opinion in respect of significant disadvantage. A binding arrangement exists if the product:
The exemption from assessment of an income stream applies to individual income streams held by individual pensioners. If a pensioner has multiple products, then each product held by that pensioner will need to be considered separately against the exemption criteria. Granting an exemption to an individual pensioner in respect of an income stream product is not a precedent to granting an exemption to other pensioners with the same product. As most products affected by the 20 September 1998 amending changes can be commuted, and contracts can generally be renegotiated with the agreement of the parties involved, it is expected that few pensioners will meet the criteria for a binding arrangement.
A request for exemption will generally be granted on the grounds of significant disadvantage if the assessment under the new rules reduces the person's total income to below the maximum rate of pension/allowance plus the income free area [2] under the income test [2]. Effectively, significant disadvantage exists where:
(New rate of pension + other income) is less than the (maximum rate of pension + income free area).
A pensioner must have been in continuous receipt of an income support payment since 19 September 1998 to continue to have the benefit of an exemption. Transfer from one payment to another is acceptable, but if an income support pension ceases to be payable for a period, and pension is reinstated at a future date, the exemption is lost unless the Minister makes a new written declaration that the person's income stream be exempt from assessment under the current rules.
According to subsection 5J(1) of the VEA [9], an income stream includes:
but does not include any of the following:
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.
A Social Security payment refers to the following:
The income free area is the amount of income that an income support pensioner may receive without suffering any reduction in pension under the income test.
One element of the means test [2] for income support pensions whereby the rate of pension payable to a pensioner reduces progressively as their income increases above a certain threshold known as the income free area (IFA) [2].
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16546%23comment-form
[2] https://clik.dva.gov.au/%23
[3] https://clik.dva.gov.au/book/export/html/16546#tgt-cspol_part10_ftn645
[4] https://clik.dva.gov.au/book/export/html/16546#tgt-cspol_part10_ftn646
[5] https://clik.dva.gov.au/legislation-library
[6] https://clik.dva.gov.au/book/export/html/16546#ref-cspol_part10_ftn645
[7] mailto:PAIS@dva.gov.au
[8] https://clik.dva.gov.au/book/export/html/16546#ref-cspol_part10_ftn646
[9] http://clik.dva.gov.au/legislation-library