4.3.5.10 How Income from DVA is Assessed

DVA Payment

Treatment for social security purposes

Service pensions for existing recipients in 1973.

Is treated as income, if a recipient has maintained their entitlement since 1973 to BOTH:

- service pension (section 23(1)-'service pension'), and

- social security pension (section 23(1)-'social security pension').

Act reference: SSAct section 23(1)-'service pension', section 23(1)-'social security pension'

Service pensions for all recipients since 1973.

CANNOT receive social security pension or benefit (section 23(1)-'social security benefit').

Act reference: SSAct section 23(1)-'social security benefit'

Service pension received by the partner (1.1.P.70) of a social security recipient.

NOT treated as income. Paid the partnered rate.

Ex-gratia payment of $25,000 to Australian service personnel and civilians held as prisoners of war by the Japanese between 7 December 1941 and 29 October 1945, or to their widow/er.

Act reference: Compensation (Japanese Internment) Act 2001

The ex-gratia payment is excluded from the income test.

The value of a person's assets is permanently reduced by $25,000.

If a person invests the payment, income from the investment is counted under normal income test rules.

Example: This means if the person invests the money in financial investments the investment will be subject to normal income test deeming rules.

Ex-gratia payment of $25,000 to Australian service personnel and civilians held as prisoners of war by the North Koreans between 27 June 1950 and 19 April 1956, or to their surviving partner.

Act reference: Veterans' Entitlements (Clarke Review) Act 2004

The ex-gratia payment is excluded from the income test.

The value of a person's assets is permanently reduced by $25,000.

If a person invests the payment, income from the investment is counted under normal income test rules.

Example: This means if the person invests the money in financial investments the investment will be subject to normal income test deeming rules.

Compensation payments in respect of certain World War 2 internments:

- one-off, ex-gratia payment of $25,000 received by a person's partner for Australian prisoners of war in Europe during World War 2.

Act reference: Social Security and Veterans' Affairs Legislation Amendment (One-off Payments and Other 2007 Budget Measures) Act 2007

The ex-gratia payment is excluded from the income test.

The value of a person's assets is permanently reduced by $25,000.

If a person invests the payment, income from the investment is counted under normal income test rules.

Example: This means if the person invests the money in financial investments the investment will be subject to normal income test deeming rules.

Policy reference: SS Guide 4.3.2.35 Income Exempt from Assessment - s8(11) Exempt Lump Sums

DVA Payment

Treatment for social security purposes

Disability pensions.

ALL ARE treated as income.

Disability pension reduced by 'limitation' period.

ACTUAL (net) amount received IS treated as income.

Explanation: The lump sum previously received by the person was 'adequate consideration' for the reduced pension.

Disability pension payments for children.

- NOT treated as income,

- DOES NOT affect the additional free area for dependent children (1.1.D.70). Information about the Budget 2009-10 changes to the additional free area for dependent children can be found in 4.2.1.20.

A payment under Part VIIAB of the Veterans' Entitlements Act (including a payment made under regulations made under that Part), for example, DFISA and DFISA bonus.

NOT treated as income.

Policy reference: SS Guide 4.3.5.70 About DVA Defence Force Income Support Allowance (DFISA)

Veterans' Children Education Scheme (VCES):

Education Allowance

For more information about the VCES refer to DVA Allowances and select Veterans' Children Education Scheme.

Act reference: Veterans' Entitlements Act 1986 refer to sections 116 to 118

- The VCES is listed as a prescribed education scheme, SSAct section 5(1). Students receiving the VCES are precluded from receiving YA, Austudy, WA or MAA as the multiple entitlement exclusion would apply.

- The VCES precludes payment of education allowance under the scheme where the student receives financial support under any Australian Government education assistance, income support or similar schemes.

Example: A child with a disability turns 16 years of age and claims DSP. The VEA precludes payment of both DSP and education allowance. The SSAct does not contain an exclusion for DSP when VCES is paid.

People known to receive VCES benefits should be encouraged to contact the VCES secretary at DVA in their state for information. If the person does not have their VCES benefits terminated, the allowance IS treated as income for income support payments as it is not specifically excluded under the SSAct.

Policy reference: SS Guide 3.1.6.10 General Payability Provisions

Orphan's pension.

- NOT treated as income.

- DOES NOT affect the additional free area for dependent children. Information about the Budget 2009-10 changes to the additional free area for dependent children can be found in 4.2.1.20.

Loss of earnings allowance.

IS treated as income.

DVA Payment

Treatment for social security purposes

Other allowances paid under VEA.

See 4.3.5.30 About DVA Disability Pensions.

War widow's or widower's pension (which may continue to be received after re-partnering).

For the recipient:

IS treated as income if:

- multiple entitlement exclusion does not apply, or

- income support supplement not paid.

For partner of recipient:

IS treated as income.

Bereavement payment.

NOT treated as income.

Funeral benefit.

NOT treated as income.

Income support supplement (ISS).

For the recipient:

CANNOT receive social security income support payment.

Explanation: Since 20 March 1995 a war widow or widower does not have the opportunity to choose between social security payment and ISS (4.3.5.40).

For the partner of the recipient:

NOT treated as income, because it is excluded as income (amendment to SSAct 8(8)(y) Royal Assent 6 September 2002)

Adequate means of support pension (AMS).

IS treated as income.

Adequate means of support pension (AMS) payment to a disability pensioner's invalid child.

IS treated as income.

Payment

Explanation

Mature age allowance

Newstart allowance

Sickness allowance

Special benefit

Bereavement allowance

Precludes a person from receiving BOTH war widow's or widower's pension and these payments. DVA must be advised of any amount paid after the grant of a war widow's or widower's pension.

A person can, however, receive both if they:

- received social security benefit before 1/11/86, and

- have been continuously receiving war widow's or widower's pension since before 1/11/86.

Widow B pension

Parenting payment

Precludes a person from receiving BOTH war widow's or widower's pension and these payments.

Payment

Service pension

War widow's or widower's pension

Newstart allowance

section 614(1) to 614(2)

section 614(3) to 614(4)

Youth allowance

section 552A

-

Partner allowance

SSAct section 771HI(3)

Mature age allowance

section 660XCF(1) to 660XCF(2)

SSAct section 660XCF(3) to 660 XCF(4)

Austudy payment

section 578A

-

Age pension

section 47(1) to 47(2)

section 47(3) to 47(6)

Wife pension

section 151(1) to 151(2)

section 151(3) to 151(6)

Widow B pension

section 368(1) to 368(2)

section 368(3)

Bereavement allowance

section 321(1) to 321(2)

section 321(3) to 321(4)

Parenting payment

section 500S(1) to 500S(2)

section 500S(3) to 500S(4)

Disability support pension

section 103(1) to 103(2)

section 103(3) to 103(6)

Carer payment

section 202(1) to 202(2)

section 202(3) to 202(6)

Sickness allowance

section 686(1) to 686(2)

section 686(3) to 686(4)

Telephone allowance

section 1061R

section 1061R

Seniors health card

section 1061ZG

-