Non-accruing membership of the Pension Bonus Scheme (PBS) 065-07030020

To accrue bonus periods the customer needs to meet the flexible work test requirement of 960 hours per annum.

During a non-accruing period a registered PBS member retains membership of the scheme but does not accrue bonus periods. The time spent in a non-accruing period is not counted as time that the person deferred claiming Age Pension.

The most common reasons for a non-accruing period are:

• non-accruing period for a non-working person relying on their partner's work prior to their partner reaching pension age (to be used only for periods before 20 September 2009)
• deprivation non-accruing period
• non-accruing due to illness
• receipt of compensation
• receipt of Carer Payment (CP)
• non-accruing due to other work-related leave
• other acceptable non-accruing reasons

Non-accruing period for a non-working person relying on their partner's work prior to their partner reaching pension age.

From 20 September 2009

From 20 September 2009 customers who are non-accruing members of the scheme because they are not working and have a working partner who is not qualified for Age Pension, and the partner intended to register in the scheme when they do qualify for Age Pension, cannot remain as non-accruing members of the scheme. Generally, unless these customers recommenced meeting the work test, or are non-accruing members for another reason, they were required to claim their Pension Bonus within 13 weeks of 20 September 2009.

Before 20 September 2009

Any period before 20 September 2009 is considered to be a non-accruing period, when a person who was a member of a couple:

• was a registered member of the scheme
• was not meeting the work test, and
• had a partner who was working and was not a registered member of the PBS but intended to become a registered member when they reached age pension qualification.

There is no discretion in applying a non-accruing period in these circumstances.

Customers who had under Age Pension age working partners, or partners who were not residentially qualified for Age Pension, may have been affected by the closure of the scheme to new members. These customers must be referred to the Financial Information Service (FIS).

If a PBS registered member or their partner exceeds the allowable gifting amount in any year or any 5 year rolling period then a 5 year non-accruing period applies starting from the date the gift exceeds the allowable limit. There is no discretion in applying a non-accruing period for deprivation.

If a decision is made that a gift has been returned the disposal preclusion period ceases from the date of return of the gift.

If a member of the PBS is absent from work due to illness then their membership of the scheme becomes non-accruing.

Sick leave - There is a 26 week limit on the amount of time that a person can be absent from work due to illness and remain a non-accruing member of the PBS.

Prior to 1 January 2008 - the person takes a continuous period of sick leave of between 4-26 weeks (whether or not in receipt of sick leave payments), up to a maximum of 26 weeks duration. Non-accruing membership does not apply to sick leave less than 4 weeks.

On or after 1 January 2008 - Sick leave taken on or after 1 January 2008 is treated the same as all other types of work-related leave, for instance, there is no requirement that the member take more than 4 weeks of sick leave in order to be eligible to be made non-accruing during that leave. There is discretion in applying a non-accruing period for sick leave. A non-accruing period should only be applied where the customer would otherwise fail the work test.

From 6 September 2008 - Consecutive periods of work-related leave and sick leave longer than 26 weeks cannot be recorded on the system.

If the customer or their partner is registered for the PBS, then the leave may affect their entitlement to the Pension Bonus. The case should be referred to the Senior Practitioner to consider if the entitlement to the Pension Bonus is likely to be affected. If so, a Financial Information Service (FIS) is required.

Compensation - A non-accruing period applies while the customer is in receipt of regular payments of compensation or a compensation lump sum that would preclude the customer from pension if the member lodged a claim due to a preclusion period applying. There is no limit to the length of a non-accruing period due to compensation. There is no discretion in applying a non-accruing period under these circumstances. Note: in special circumstances, compensation payments can be treated as not having been received under section 1184K(1) of the Social Security Act 1991 and the person's membership is therefore assessed as accruing for example, when a customer is receiving periodic compensation as a 'top up' to their employment income and they are otherwise meeting the work test.

Carer Payment - A non-accruing period applies when the customer is in receipt of CP. There is no limit to the length of a CP non-accruing period. There is no discretion in applying a non-accruing period where the member is in receipt of CP.

On or after 1 January 2008 - any paid or unpaid leave from employment (or any combination of leave types) for up to a maximum of 26 weeks can be considered a non-accruing period where the customer would otherwise fail the work test. That is, there is discretion in applying a non-accruing period for work-related leave.

From 6 September 2008 - Consecutive periods of work-related leave and sick leave longer than 26 weeks will unable to be recorded on the system.

Non-accruing periods also apply to customers:

• Who are a Community Development Employment Project (CDEP) wages participant (no discretion applies).
• Are in prison (no discretion applies).
• Are in psychiatric confinement because of being charged with an offence (no discretion applies).
• Following the death of the partner of a registered Pension Bonus Scheme (PBS) member, if the customer does not meet the work test requirements, a 13 week non-accruing period applies (discretion applies). From 6 September 2008 non-accruing periods longer than 13 weeks due to bereavement cannot be recorded on the system.
• Who are over 75 years of age and continue to meet the work test become non-accruing members of the scheme (no discretion applies). Note: there are some exceptions.
• If, on or after 24 August 2006, the person suffered a reduction in the amount of gainful work they performed because of a major disaster as defined in section 23(1) of the Social Security Act 1991. A maximum period of 13 weeks as a non-accruing member applies (discretion applies).
• If, on or after 1 March 2006, the member suffered a reduction in the amount of gainful work performed because of Cyclone Larry that hit the Australian mainland on 20 March 2006. A maximum period of 13 weeks as a non-accruing member applies (discretion applies).
• Who are affected by a major disaster (as per the Social Security Act, Section 36) and as a result suffered a reduction in the amount of gainful work they performed because of the Queensland floods or the Victorian bush fires. A maximum period of 13 weeks as a non-accruing member applies.