Source: http://clik.dva.gov.au/print/book/export/html/16208
Timestamp: 2019-09-23 13:03:08
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﻿ 5.6.1 Overview of the Pension Bonus Scheme
Home > Compensation and Support Policy Library > Part 5 Income Support Allowances and Benefits > 5.6 Pension Bonus Scheme > 5.6.1 Overview of the Pension Bonus Scheme
What is the pension bonus?
The pension bonus is a once only, tax-free lump sum payable to a person who, on reaching pension age [2] voluntarily defers retirement for at least one year. A person can accrue a maximum of 5 qualifying bonus periods, that is equivalent to 5 years. The bonus is calculated using a multiple of the annual rate of basic pension paid at the time of actual pension grant.
The pension bonus scheme closed to people who have not reached pension age or qualifying age before 20 September 2009. People who were eligible before that date, but had not yet applied were able to register for the scheme until 1 July 2014. The scheme closed to new registrations from 1 July 2014. Existing members can remain in the scheme while they continue to meet the work requirements to accrue a pension bonus. The work bonus was introduced as an alternative to encourage workforce participation.
The pension bonus scheme [2] provides incentive for older Australians to remain in the workforce and defer receipt of income support pension [2]. The incentive is a non-taxable “one off” lump sum amount payable if all eligibility criteria and rules are satisfied. There are two pension bonus schemes:
the DVA [2] scheme, and
the Centrelink [2] scheme.
The DVA scheme
The DVA scheme is accessible to people of pension [glossary:or:] qualifying age [2] who are eligible to receive:
service pension [2], or
income support supplement [2].
By registering for the pension bonus scheme prior to 1 July 2014 and deferring pension for at least one full year, a bonus may be paid by DVA when a pension is granted. To be eligible for the bonus all requirements of the scheme must be met.
Deferring age pension through DVA
A disability pensioner or their partner who would qualify for social security age pension and who has registered for the pension bonus scheme prior to 1 July 2014, may choose to defer their age pension [2] and participate in the pension bonus scheme through DVA. The rules under social security law [2] would apply. In certain circumstances a war widow/widower may be eligible for a bonus under the DVA scheme on the basis of having deferred the age pension at Centrelink.
Centrelink scheme
The Centrelink scheme is accessible to people of age pension age [2] who are eligible to receive the age pension. Having deferred age pension for a minimum of a year, a bonus may be paid to the person when the age pension is granted.
The objectives of both schemes are identical. That is, to:
increase labour market participation of people of pension age,
increase the level of individual savings for retirement, and
restrain growth in pension outlays.
These objectives will be met by offering a bonus to people willing to defer their pension by maintaining an attachment to the workforce through gainful employment and who have registered for the pension bonus scheme prior to 1 July 2014.
Key components of the DVA scheme
The key components of the scheme are as follows:
a person has attained pension age/qualifying age,
other relevant eligibility criteria for pension payable on the grounds of age are met, More ? [5]
there has been no prior receipt of an income support pension or benefit (other than carer payment [6][glossary:,:] carer service pension or income support supplement paid to a carer) since the person's special date of eligibility [2] and before making a claim for the pension bonus, More ? [7]
the income support pension [2] (or, where a person has been eligible for more than one pension since reaching pension age, the pensions) must be deferred,
the person has registered for the scheme prior to 1 July 2014, More ? [8]
the person does not need to have pension payable in order to register,
between at least one and up to five qualifying bonus periods may be accrued, More ? [9]
the work test [2] must be passed to accrue a bonus period, More ? [10]
a minimum of 960 hours of gainful work [2] be performed during a year, More ? [11]
a minimum of two thirds (640 hours) of the gainful work must be performed within Australia,
work outside Australia can be regarded as work in Australia if special circumstances are met, More ? [12]
the rate of bonus is dependent on the number of accrued bonus periods and the person's annual rate of pension on grant of pension, and More ? [13]
the person has a lodgment period [2] within which they must claim a bonus (usually within 13 weeks of the end of the last bonus period). More ? [14]
[glossary::]
Section 5.6.7 Calculating the Bonus [15]
Section 5.6.11 Bonus Payable to a War Widow/Widower who has Deferred Age Pension [17]
Section 3.1.2 Age Service Pension [19]
3.1.4/Eligibility for Partner Service Pension [20]
Chapter 3.2 Income Support Supplement (ISS) Eligibility [21]
Section 5.6.2 Eligibility for Participation in the Scheme [23]
Section 5.6.3 Registration as a Member of the Scheme [25]
5.6.4/Bonus Period [27]
5.6.4/Work Requirements of the Pension Bonus Scheme [29]
5.6.6/Lodgement Period for a Claim [34]
The pension bonus scheme closed to new entrants on 20 September 2009. Existing members can continue in the scheme under the rules that existed prior to 20 September 2009. The pension bonus scheme provided an incentive for older Australians to remain in the workforce and defer receipt of income support pension [36]. The incentive was a bonus, payable if all eligibility criteria and rules were satisfied.
The pension bonus was a once-only, tax-free lump sum payable to a person who, on reaching their special date of eligibility [37], voluntarily deferred retirement for at least one year and registered as a member of the scheme. The pension bonus was claimed at the same time as claiming pension and is calculated using the annual rate of basic pension payable at grant, multiplied by the bonus periods accrued.
Qualifying age is defined in section 5Q(1) of the [38]VEA [38]and is equivalent to the pension age for a veteran which is described in section 5QA VEA as:
An age pension is a means tested [2] income support payment [2] paid by Centrelink [2] or DVA [2] on behalf of the Department of Families, Housing, Community Services and Indigenous Affairs. The majority of age pensions are paid through Centrelink. However, eligible veterans [2] who have an accepted disability [2] or receive a disability pension [2] from DVA, but do not have qualifying service [2], may be paid their age pension by DVA. Their partner may also receive their age pension from DVA, if eligible.
Special date of eligibility is defined in section 45TB VEA [39] and relates to the pension bonus scheme. A person's special date of eligibility for:
The Commission [2] has discretion to treat an activity as gainful work.
For a full definition see subsection 45UL of the VEA [38].
Source URL (modified on 20/10/2014 - 3:25pm): http://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/56-pension-bonus-scheme/561-overview-pension-bonus-scheme
[1] http://clik.dva.gov.au/user/login?destination=node/16208%23comment-form
[3] http://clik.dva.gov.au/book/export/html/16208#tgt-cspol_part5_ftn157
[4] http://clik.dva.gov.au/book/export/html/16208#tgt-cspol_part5_ftn158
[5] http://clik.dva.gov.au/book/export/html/16208#tgt-cspol_part5_ftn159
[6] clikpopup://DEF/Carer payment
[7] http://clik.dva.gov.au/book/export/html/16208#tgt-cspol_part5_ftn160
[8] http://clik.dva.gov.au/book/export/html/16208#tgt-cspol_part5_ftn161
[9] http://clik.dva.gov.au/book/export/html/16208#tgt-cspol_part5_ftn162
[10] http://clik.dva.gov.au/book/export/html/16208#tgt-cspol_part5_ftn163
[11] http://clik.dva.gov.au/book/export/html/16208#tgt-cspol_part5_ftn164
[12] http://clik.dva.gov.au/book/export/html/16208#tgt-cspol_part5_ftn165
[13] http://clik.dva.gov.au/book/export/html/16208#tgt-cspol_part5_ftn166
[14] http://clik.dva.gov.au/book/export/html/16208#tgt-cspol_part5_ftn167
[15] http://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/56-pension-bonus-scheme/567-calculating-bonus
[16] http://clik.dva.gov.au/book/export/html/16208#ref-cspol_part5_ftn157
[17] http://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/56-pension-bonus-scheme/5611-bonus-payable-war-widowwidower-who-has-deferred-age-pension
[18] http://clik.dva.gov.au/book/export/html/16208#ref-cspol_part5_ftn158
[19] http://clik.dva.gov.au/compensation-and-support-policy-library/part-3-income-support-eligibility/31-service-pension-eligibility/312-age-service-pension
[20] http://clik.dva.gov.au/node/16873
[21] http://clik.dva.gov.au/compensation-and-support-policy-library/part-3-income-support-eligibility/32-income-support-supplement-iss-eligibility
[22] http://clik.dva.gov.au/book/export/html/16208#ref-cspol_part5_ftn159
[23] http://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/56-pension-bonus-scheme/562-eligibility-participation-scheme
[24] http://clik.dva.gov.au/book/export/html/16208#ref-cspol_part5_ftn160
[25] http://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/56-pension-bonus-scheme/563-registration-member-scheme
[26] http://clik.dva.gov.au/book/export/html/16208#ref-cspol_part5_ftn161
[27] http://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/56-pension-bonus-scheme/564-membership-requirements/bonus-period
[28] http://clik.dva.gov.au/book/export/html/16208#ref-cspol_part5_ftn162
[29] http://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/56-pension-bonus-scheme/564-membership-requirements/work-requirements-pension-bonus-scheme
[30] http://clik.dva.gov.au/book/export/html/16208#ref-cspol_part5_ftn163
[31] http://clik.dva.gov.au/book/export/html/16208#ref-cspol_part5_ftn164
[32] http://clik.dva.gov.au/book/export/html/16208#ref-cspol_part5_ftn165
[33] http://clik.dva.gov.au/book/export/html/16208#ref-cspol_part5_ftn166
[34] http://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/56-pension-bonus-scheme/566-claiming-bonus/lodgement-period-claim
[35] http://clik.dva.gov.au/book/export/html/16208#ref-cspol_part5_ftn167
[36] clikpopup://DEF/Income%20support%20pension
[37] clikpopup://DEF/Special%20date%20of%20eligibility
[38] http://www.comlaw.gov.au/Series/C2004A03268