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Thursday, 4 June 1987
Page: 4064

(Question No. 5310)

Mr Conquest asked the Minister for Social Security, upon notice, on 30 April 1987:

(1) Is it a fact that (a) section 135te of the Social Security Act provides that a pensioner must advise any change in circumstances and (b) failure to inform his Department of increased earnings may result in an overpayment which can be recovered retrospectively.

(2) Does the same recourse to retrospectivity apply when the change in circumstances would have resulted in an increase in the rate of pension applicable; if not is reference manual section 16.620 the appropriate policy interpretation in these cases.

(3) Is any discretion exercised in these cases referred to in part (2) where the change in circumstances can be fully substantiated; if not, is it a long standing policy which has been applied consistently without discrimination.

(4) Will all cases involving a failure to advise a change in circumstances be treated equitably, especially in the area of retrospectivity.

Mr Howe —The answer to the honourable member's question is as follows:

(1) (a) Yes-Where the event might affect the payment of a pension, benefit or allowance.

(b) Consistent with (a) above, failure to notify of increased earnings within the allowable period results in an overpayment commencing from the payday after the increase in earnings occurred.

(2) A decline in income giving rise to a potential increase in pension is generally notified promptly. It is normal practice to increase the rate of pension as from the first pension pay-day on or after receipt of advice from the pensioner. The relevant manual references are 16.620 and 19.200.

(3) Discretion does exist to increase the rate of pension from an earlier date. Officers are instructed that this may be appropriate where:

the department is aware that a pensioner's circumstances will change from a future date, and the case was not noted for review; or

the pensioner alleges that an earlier application for increase was made at or about the time the circumstances changed; or

the request for payment had been delayed through circumstances beyond the pensioner's control and is attributable to causes other than mere ignorance of entitlement or failure to inquire on his or her part (eg. ill health or where incorrect advice has been provided to the pensioner by a person or authority upon whose advice it was reasonable for them to rely).

(4) The Social Security Act specified the date from which an overpayment exists where a change in circumstances leading to reduction or termination of entitlement is involved.

The Social Security and Veterans' Entitlements Amendment Bill 1987 contains an amendment which will promote uniformity of treatment where a change in circumstances leading to an increase in entitlement is involved by specifying that the date of change is the pension payday on or after the day of notification.

Background: Although it is the department's policy to pay an increase from the next pension pay-day at present the legislation does not preclude payment of arrears where a person advises of a change of circumstances that took place some time ago. However, on the basis that a person entitled to an increase in pension will normally notify promptly, the discretion is generally only applied in limited circumstances as outlined in the answer.

The proposed amendment arising from the May measures will give full legal support to this long standing policy of no arrears and will ensure that review activity is not made more complex and costly by the necessity to review entitlement over a lengthy past period.