4.1.1 — Obligation notices are issued:
An overpayment arising from an omission or a failure to comply with the notification provisions of the VEA may only be raised if the pensioner has been issued with a valid notice.
4.2.1 The authority to impose an obligation is contained in the following sections of the Veterans' Entitlements Act 1986 (VEA).
4.2.2 Section 54 [4] VEA gives the Secretary the power to place an obligation on a person in relation to income support pension matters. These obligations include the requirement to notify of a change in circumstances or any event that will affect the rate of payment (e.g. divorce, loss of custody of a child) within 14 days (or 28 days if the person lives overseas or receives remote area allowance).
4.2.3 Section 54A [4] VEA gives the Secretary authority to require a pensioner to provide information which may affect the payment of income support pension, fringe benefits or treatment. This request may be made using departmental forms, such as the Statement of Circumstances Form (D2589).
4.2.4 Section 54AA [4] VEA gives the Secretary authority to require an income support pensioner to provide information, produce documents or appear before an officer of the Department relating to matters that might affect their pension.
4.2.5 Section 127 [4] VEA requires notification by a pensioner of change of circumstances which may affect payment and also lists the penalties for false/misleading statements in the terms of fines or jail terms, but it no longer has an enforceable pension impact. That is, this section does not enable an enforceable change to the rate of pension. For more information refer to this manual's Section 4.13 Notification Provisions Post Assets Test – Pre VEA.
4.2.6 Section 128 [4] VEA gives the authority to obtain information from non-pensioners or pensioners, for the purpose of investigation. A section 128 [4] VEA notice should NOT be issued to a pensioner unless the pensioner is a third party in respect of an investigation being carried out on another pensioner. In accordance with section 129 [4] VEA, a notice under section 128 [4] VEA is not admissible in evidence against a pensioner in any criminal proceedings, unless those proceedings are for an offence under section 128 [4] VEA. Information requested from a disability compensation recipient who is not in receipt of service pension or age pension should be sought under section 31 [4] VEA, section 32 [4] VEA or section 127 [4] VEA.
4.2.7 Section 214 [4] VEA deals with the delegation of the Secretary's authority. Under the VEA only the Secretary may issue an enforceable notice. However, this section provides that a valid notice may be issued by a person who has the Secretary's delegated authority. When issuing an obligation notice, the notice must be signed by an officer as a “Delegate of the Secretary”.
4.2.8 Any officer who needs to send a notice to a person under section 54 [4] VEA, section 128 [4] VEA, or section 54A [4] VEA must have the Secretary's delegated authority to do so. To be valid, the notice must be signed by that person as a Delegate of the Secretary. An incorrect delegation will invalidate the request i.e. quoting “Delegate of the Repatriation Commission” when the authority is the Secretary of the Department.
Note:Section 54 VEA and section 54A VEA are important because the question of whether a person has or has not met their obligations under the VEA is basic to most decisions to reduce or cancel income support pension. If a person has not met their obligations a decision to reduce or cancel pension usually results in a recoverable overpayment. If a person has met their obligations, the VEA specifies the date for the pension reduction/cancellation, however, the delegate does have the discretion to waive the overpayment under the waiver guidelines.
4.3.1.1 — Commission policy is that full obligation information is provided:
4.3.1.2 — The 2 and 5-yearly provision of obligations to pensioners is done via the June mailout when payment summaries (previously group certificates) are issued. The letter advises pensioners of their obligations in respect of domestic, residential and financial circumstances as well as providing the pensioner with their assessment details and right of review.
4.3.2.1 — The frequency with which the computer generated advice letters are sent are:
Note:Where obligations are issued, the Secretary's delegation is required. The signature block of advice letters should read “delegate of the Secretary and Repatriation Commission”.
4.3.3.1 — Obligation letters are issued under section 54 [4] VEA. Section 54 [4] VEA specifies that the period for compliance shall be not later than 14 days. Prior to 13 July 1999, the period given for compliance was at least 14 days (21 days in practice). Subsection 54(5A) [4] VEA provides for a notification period of up to 28 days in special circumstances. The Secretary has determined that a person shall have 28 days to comply with their notification obligations if they live overseas or receive remote area allowance. Subsection 54(5AA) [4] VEA provides for the notification period to be taken as complied with if notification of a death is received within the 98-day bereavement period.
4.4.1.1 — A person receiving service pension, age pension or income support supplement has a legal obligation to notify the Department of changes that might affect the amount of pension payable. This section provides a list of changed circumstances that should be notified.
Note:This list is not exhaustive.
Note:Assets tested pensioners have no obligation to advise the Department of an increase in the value of an existing asset. Where it is determined that a pensioner has increased the value of an existing assessable asset, it is advisable that the expenditure relating to that increase be investigated. The expenditure may not necessarily be reflected in financial institution accounts. This may trigger a query by the examiner that the pensioner may have an additional source of income.
4.5.1 — The table below shows significant changes relating to the issue of obligation notices, the legislative basis and the dates of introduction.
When introduced |
Section of the Act |
Changes |
1976 |
Section 96 in the Repatriation Act 1920 (Repat Act) |
Income test introduced obligations regarding income. |
1977 |
Section 98A in the Repat Act |
Supplementary assistance (rent assistance) |
27 October 1983 |
Section 96 in the Repat Act |
Pensioners over 70 no longer free from obligation to advise of change of circumstances. |
14 March 1985 |
Section 121 in the Repat Act carried over in the Transitional provisions |
Assets test introduced. |
22 May 1986 to 1 July 1991 |
Section 127 [4] VEA |
Pensioners obliged to advise DVA within a specified period of any changes in circumstances. |
1 December 1986 |
Section 127 [4] VEA |
Bulk exercise to issue half of recorded service pensioners with obligation advices. These were not issued to pensioners residing overseas. |
1 November 1987 |
Section 127 [4] VEA |
Bulk exercise to issue remaining half of pensioner population with obligation advices. These were not issued to pensioners residing overseas. Capital growth letter also included as insert. |
21 March 1991 |
Section 127 [4] VEA |
Computer generated advice letters for Consumer Price Index (CPI) increases. |
1 July 1991 |
Section 54 [4] VEA |
Replaces Section 127 [4] of the VEA. Full advice to pensioners on less than maximum rate service pension. |
September 1991 |
Section 54 [4] VEA |
Full advice to all service pensioners. |
March 1992 |
Section 54 [4] VEA |
Shortened advice issued to all service pensioners. |
1 July 1992 |
Section 54 [4] VEA |
Start of quarterly advice issue for payday 9 July 1992. Service pensioners advised of full obligations once each year. |
1 July 1996 |
Section 54 [4] VEA |
Deemed income rules extended to the full range of financial assets. This resulted in changes to both daily and quarterly advices to pensioners. For less-than-maximum rate pensioners, the June 1996 quarterly advice included details of the new deemed income rules, including: an explanation of the changes to the income test, a list of the pensioner's financial assets and an information sheet explaining how the new rules work. Affected pensioners also received an explanation of the saving of their eligibility for treatment benefits. A FREECALL 1800 hotline was established to deal with pensioner queries arising from receipt of the quarterly advice. The daily advices system was modified to incorporate the changes to the deemed income rules. |
15 April 1997 |
Section 54 [4] VEA |
The previous policy of a minimum period of providing full obligations and assessment information every 12 months, has been extended to: 5 years for maximum rate pensioners; and 2 years for reduced rate pensioners. Full obligations to be provided via the June mailout. |
26 March 1998 |
Sections 67 & 68 in the SSA |
Age pensioners not issued with You and Your Pension (Y&YP), but were issued with full obligations on transfer from the then Department of Social Security and were reminded that previous obligations issued continued to apply. |
June 1998 |
Section 54 [4] VEA |
Y&YP distributed to all service pensioners and ISS recipients with the annual mailout of group certificates and Medicare Levy exemption certificates. Since that date a copy of the booklet is sent to all new grants of service pension or income support supplement with their grant advice. Full obligations provided if Y&YP not available. |
13 July 1999 |
Section 54 [4] VEA |
June quarterly advice to all income support pensioners advising that section 54 obligations have changed from 21 days to no more than 14 days. This was due to the introduction of the 1997/98 Date of Effect Budget initiative. Also refer Clause 22, Part 3, Schedule 5 [4] VEA. |
23 July 2001 |
Section 54 [4] VEA Sections 67 & 68 in the SSA |
2 — nd Edition of Y&YP issued to all new grants of service pension, income support supplement and social security age pension (paid by DVA). Booklet considered legal notification of obligations under sections 67 & 68 in the SSA. Full obligations provided if Y&YP not available. |
1 July 2002 |
Section 54 [4] VEA Sections 67 & 68 in the SSA |
Full obligations issued to all less than maximum rate service pensioners, income support supplement recipients and age pensioners via June 2002 Statutory Increase (SI) advice letter, Payment Summary (formerly named Group Certificate), and Medicare Levy Exemption Certificate mailout. |
1 July 2002 |
Section 54 [4] VEA |
Disposal of assets rule changes – DI 28/2002. Paragraph inserted into full obligations that pensioners must inform the Department if they give away $10,000 in a tax year or $30,000 in a rolling five year period. |
30 June 2003 |
Section 54 [4] VEA |
Full obligations issued to all maximum rate pensioners maximum rate pensioners in line with the Repatriation Commission policy that pensioners receiving maximum rate of pension be provided with their full obligations at a minimum interval of once every five years. |
1 September 2003 |
Section 54 [4] VEA |
Y&YP provided to all pensioners in payment following End of Bereavement (EOB) processing. Stateline 31 July 2003. |
6 October 2003 |
Section 54 [4] VEA Sections 67 & 68 in the SSA |
3 — rd Edition of Y&YP issued to all new grants of service pension, income support supplement and social security age pension (paid by DVA). Also provided to all pensioners in payment following EOB processing. |
7 October 2003 |
Sections 67 & 68 in the SSA |
Y&YP not considered a legal notice of obligations for age pensioners receiving payment from DVA. Full obligations to be provided to all grants of age pension with Y&YP issued as an information booklet (DI 26/2003). |
Note:In June 2000 full obligations were not issued to less than maximum rate service pension, and income support supplement recipients. Full Obligations were withdrawn at the last minute as it was thought that they were inadvertently sent in 1999. Reprints of less than maximum rate pensioners showed they were not issued with FULL OBLIGATIONS.
4.6.1 — Veterans and dependants must notify the Department within 14 days in the following circumstances:
Note:This list is not exhaustive, and the normal obligations and review provisions apply to veterans participating in the Veterans' Vocational Rehabilitation Scheme.
4.7.1 — If a pensioner has not been issued with an obligation notice advising them to notify the Department within a prescribed time limit of particular changes in circumstances, and the pensioner then fails or omits to notify of the change, no overpayment exists. However, if the overpayment is caused by a false or misleading statement, the overpayment is fully recoverable. It is an offence under section 208 [4] VEA to intentionally make a false or misleading statement:
Clause 22 of Schedule 5 [4] VEA provides for the new notification of obligations that were introduced as part of the 1997/98 Date of Effect Budget initiative. These are effective from 13 July 1999, even if an old section 54 [4] VEA obligation notice was not revoked.
4.8.1 — If an obligation advice has been issued it is necessary to establish:
4.8.2 — Once a breach has been established, the commencement and end dates for the overpayment period can be determined.
4.8.3 — Where a loss of eligibility has occurred, be aware that under the Repatriation Act 1920 if a person met their obligations and advised of the change within the 14 day period then no overpayment should be raised, even if it took 12 months to effect the cancellation.
4.8.4 — However, under the VEA, if a person advises in time, but a delay in processing causes them to continue to receive payments for some time, a recoverable overpayment exists for the amount paid from the day after the end of the notification period (14 days, or 28 days if living overseas or receiving remote area allowance).
4.8.5 — If an overpayment is increased because the Department failed to action advice from a pensioner in a timely manner, a delegate may use his/her discretion to waive the portion of the overpayment caused by administrative delay (refer to this manual's Section 7.18 Waiver).
4.8.6 — Where a pensioner has complied with their obligations under section 54 [4] VEA, section 56 [4] VEA allows for the income support payment to be reduced from the day after the end of the notification period.
4.8.7 — Where a pensioner has not complied with their obligations under section 54 [4] VEA, subsection 56A(1) [4] VEA and section 56B [4] VEA allow a reduction or cancellation to take effect from the day of event.
PIPS will not default to joint advices for age pensioners paid by DVA if either member of the couple has not been recorded on the CO.CO screen of the Mainframe as having signed an authority for DVA to release personal information to their partner. PIPS will default to separate advices unless authorisation has been provided.
The Department's Legal Services Group has advised that it is not appropriate to advise pensioners of any overpayments in a joint advice letter. Each debtor must be contacted individually so they have a chance to reply to the letter personally.
As PIPS does not notify the delegate of an overpayment prior to authorisation, it is impossible to identify whether an overpayment exists prior to the advice letter being generated. If it can be reasonably determined that an overpayment may arise from a pensioner's assessment, the joint advice default should be set to single.
However, pensioners should not be discouraged from providing information over the telephone, nor should they be told that all information must be placed in writing. There may be valid reasons for the pensioner to opt for verbal advice (e.g. illness or illiteracy).
In some circumstances, written advice will be necessary. For example, a section 127 [4] VEA notification specifically requests written advice. Staff should not alienate a pensioner by insisting on a strict adherence to this requirement. In certain circumstances, such as requesting information in relation to Self Managed Superannuation Funds, the nature of the documentation requested, will require the pensioner to supply the documentation by mail.
4.10.1 — For the purpose of people receiving social security payments from DVA, the authority to impose an obligation is contained in the following sections of the Social Security (Administration) Act 1999.
4.10.2 — Section 63 in the SSAA gives the Secretary of FaCS the power to notify anyone who has claimed or who is receiving a payment or who has claimed or holds a concession card that they are required to: come to a DVA office, contact DVA, or provide specified information.
Section 67 in the SSAA gives the Secretary of FaCS the authority to notify a person who has claimed a Social Security payment that they must advise DVA if a specified event or change in circumstances has occurred or is likely to occur, or give DVA a statement about a matter relevant to their payment.
Section 68 in the SSAA gives the Secretary of FaCS the authority to issue to a person who is receiving a social security payment or holding a concession card a notice which requires the person to advise DVA if a specified event or change in circumstances has occurred or is likely to occur, or give DVA a statement about a matter relevant to their payment or qualification for the concession card.
Section 69 in the SSAA gives the Secretary of FaCS the authority to issue to a person who has received a social security payment or has held a concession card a notice which requires the person to advise DVA if a specified event or change in circumstances has occurred, or give DVA a statement about a matter relevant to their payment or qualification for the concession card.
Subsection 23(1D) in the SSA provides that if a person's primary payment (social security income support payment) is nil, but defence force income support allowance (DFISA) is payable, the person is considered to be a social security recipient. If the person's primary payment application was submitted to and administered by Centrelink, then their obligations reside with Centrelink. If the person's age pension application was submitted to and administered by DVA, then their obligations reside with DVA and paragraphs 4.10.1 to 4.10.5 apply.
4.11.1 — Recipients of social security payments paid by DVA receive full obligation information under the same guidelines as VEA income support recipients. The signature block of advice letters must read “delegate of the Secretary”. For more information refer to this manual's Section 4.3 Notification of Obligations.
Note:While the You and Your Pension booklet is issued to social security age pensioners at grant it does not provide a legal notice of obligations. Full obligations for age pensioners are to be included in the grant advice. Y&YP may be issued as an information product only, the advice is the notice of obligations.
4.12.1.1 — Section 96 in the Repatriation Act 1920 (Repat Act) contained provisions similar to those of section 121 in the Repat Act and section 127 [4] VEA, and was carried forward in the Veterans' Entitlements (Transitional Provisions & Consequential Amendments) Act 1986. However, obligation notices issued under section 96 in the Repat Act specified that the pensioner must advise the Department within 14 days if the average weekly income in any period of 8 consecutive weeks exceeded a prescribed amount. It did not specify that the pensioner must advise the Department within 14 days if income exceeded a prescribed amount in any week. The method of calculating the effective date when an 8-week rolling period is involved is discussed in this manual's Chapter 6 Calculation. A prescribed rate notice issued prior to March 1985 constitutes a notice under section 96 in the Repat Act.
Note:Section 96 in the Repat Act contained a statutory obligation for the pensioner(s) to advise the Department of a change in circumstances or an event which would affect the rate of pension payable. There was no requirement for the issue of a notice by the Department in order to raise an overpayment.
4.12.1.2 — Some service pension claim and review forms (SP1, SP2 and SP3) in the past included a declaration signed by the pensioner to the effect that he/she undertook to advise the Department of any changes from the details declared in the form. These declarations have no legislative basis and they pose an impossible obligation on the pensioners. However, Section 96 in the Repat Act does not require the issuing of a notice in order to raise an overpayment.
4.12.2.1 — Section 98A in the Repat Act related to a pensioner's obligations to notify the Department of changes affecting their RA within a prescribed period. This section was not carried over by the Transitional Act, which meant that rent allowance (now rent assistance) overpayments could not be raised under the VEA unless or until a section 127 [4] VEA notice was issued. This oversight was rectified in the Veterans' Affairs Legislation Amendment Act 1987, by continuing the person's obligation under section 98A in the Repat Act until such time as they were issued with a section 127 [4] VEA notice. DI B14/87 refers.
4.13.1 — Section 121 in the repealed Repat Act was continued under the Transitional Act when the Assets Test was introduced on 14 March 1985. It remained in force until the introduction of the VEA on 22 May 1986, and the Transitional Act ensured a section 121 in the Repat Act notice remained in force until a notice was issued under section 127 [4] VEA. A prescribed rate notice issued after March 1986 constitutes a notice under section 121 in the Repat Act. If no notice was issued under section 121 in the Repat Act, then the previous provisions continued to apply until a notice was served under section 127 [4] VEA.
Transitional Provisions
Section 45 in the Veterans' Entitlements (Transitional Provisions & Consequential Amendments) Act 1986 continues obligations imposed on pensioners under the repealed Repatriation Act 1920. That is, they were obliged to notify of changed circumstances (except changes in rent assistance) affecting pension entitlement. Those obligations continued until the pensioner was issued with a notice under section 127 [4] VEA, which detailed their obligations under the VEA.
A notice issued under section 127 [4] VEA is the same as a notice issued under section 54 [4] VEA. This is because section 8 in the Veterans' Entitlements (Transitional Provisions & Consequential Amendments) Act 1986 contains the authority for notices issued prior to the rewrite, and these notices are to be treated as if they were issued under the appropriate sections of the rewritten Act. Prior to the rewrite of the VEA in 1991, a section 127 [4] VEA notice was the same as the current section 54 [4] VEA notice. However, after the rewrite a section 127 [4] VEA notice did not authorise a cancellation or reduction of pension.
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