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DVA Factsheet
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This Factsheet explains what a lump sum advance of pension is, who is eligible for it, how much can be paid and how the repayments are worked out.
If you are receiving a pension from DVA and you require additional funds for any purpose you might be able to get some of your pension paid in advance.
A lump sum advance may be spent for any purpose. For example, it could help you with unplanned expenses such as car repairs, household maintenance or emergency replacement of your refrigerator or washing machine. You can get up to $500 of your pension paid in advance to help you meet these sorts of expenses.
The advance payment is paid as a single lump sum. You can pay the advance back over 13 fortnights with no interest.
You are eligible for a lump sum advance if you are being paid one of the following payments:
· age service pension
· invalidity service pension
· partner service pension
· income support supplement
· war widow’s or widower’s pension
· disability pension
· social security age pension by DVA (some different rules apply).
You are not entitled to an advance of pension from DVA if the only payment you receive from DVA is:
· a benefit under the Veterans’ Children Education Scheme (VCES)
· a ‘saved’ dependant’s pension, e.g. if you are the partner of a disability pensioner receiving the dependant 10% rate of $0.84 per fortnight
· Defence Force Income Support Allowance (DFISA) by DVA. You should contact Centrelink to enquire whether you are eligible to claim a lump sum advance of your Centrelink payment.
To be eligible for a lump sum advance you have to be:
· entitled to be paid one of the pensions previously mentioned; and
· in receipt of a pension from DVA or Centrelink continually during the three months before your application for an advance; and
· able to afford to repay the advance without suffering severe financial hardship; and
· an Australian resident living in Australia at the time you apply.
You are not eligible for a lump sum advance if you:
· have been paid an advance in the last 12 months; or
· owe a debt to the Commonwealth because you have been overpaid pension by DVA or Centrelink; or
· have been paid an advance of pension which you have not yet fully repaid.
You can be paid up to $500 of your pension in advance, providing your normal pension payment is at least $38.50 per fortnight (not including any remote area allowance you may be paid).
If your normal pension payment, including all allowances other than remote area allowance, is less than $38.50 per fortnight the maximum advance you can be paid is reduced. In this case the maximum amount is the amount of your fortnightly payment multiplied by 13.
You can also apply for less than the maximum amount if this is all you need.
If you are receiving a social security age pension through DVA the rules are a little different. As an age pensioner the minimum amount you can have advanced is $250. The maximum amount of age pension you can be advanced is the lesser of:
· 6% of your annual pension rate; or
· $500.
You can only get a lump sum advance once in any 12 month period. If you do not apply for the full advance you are entitled to, this does not mean you can apply for the rest before the 12 month period is up.
Example: Mr Smith applies for a lump sum advance of his pension. He is entitled to apply for the maximum $500, but only needs $300. Mr Smith is paid the $300 on 14 June 2008. This means Mr Smith cannot apply for another lump sum advance until 14 June 2009.
Repaying a lump sum advance means you will have to get by on less than your normal rate of pension until it is paid back. This is because the repayments are taken out of your pension before it is paid to you each fortnight.
Before you apply for a lump sum advance you will have to decide whether you can afford the repayments. DVA can give you a form to help you add up your living expenses and work out your repayments (Form D0557 Lump Sum Advance Payments - Income Expenses Calculator).
The DVA officer who deals with your application will also need to be satisfied that you can afford the repayments without causing yourself financial hardship. We may ask you for more information about your circumstances if we are not sure.
The repayments are worked out by dividing the full amount of your advance by 13. The repayments are worked out in this way so that the advance will be paid back over 13 fortnights. Your pension payment will be reduced each fortnight by the amount of the repayment for 13 pays. For example a $500 advance would be repaid in 12 instalments of $38.47 each, and a final instalment of $38.36.
You will not have to pay any interest on your lump sum advance. If you can afford to, you can pay the advance back more quickly, either by lump sum payments or by asking for more to be taken out of your pension each fortnight.
If you get an advance and the repayments mean you have trouble getting by, you should contact DVA straight away. We may be able to reduce your repayments.
You would have to show that you have had an unexpected and exceptional change in your circumstances and would suffer severe financial hardship if your repayments were not reduced.
No. You do not have to tell us why you want a lump sum advance.
DVA will be able to give you the right form to apply for a lump sum advance (Form D0556 Application for Lump Sum Advance Payment of a Pension).
If the application is granted, the advance payment is paid as a lump sum, either:
· on the next day that the pension is payable; or
· on a day stated in the determination (usually within two working days of your application being approved).
If you need the money urgently you should tell us when you apply.