Advance payments for pension customers 103-05040070

The process for advance payments for non-pension customers contains information for non-pension payment customers including those in receipt of Parenting Payment Single and ABSTUDY payments.

To qualify for an advance payment a pension customer must:

• Be receiving one of the following pension payments:
• Age Pension
• Carer Payment
• Disability Support Pension, and
• Have been in receipt of an income support payment for three months including short periods off payment immediately before the customer's application for the advance payment. There are payments that may count towards the three months in receipt of an income support payment for an advance payment, and
• Be in Australia when the application is lodged, and
• Not owe a debt to the Commonwealth, and
• Be able to repay the advance payment without suffering financial hardship, and
• Be eligible for an advance payment of at least the minimum amount applicable to their relationship status, and
• Not have received an advance payment whether as a lump sum or in instalments more than 12 months ago which has not been fully repaid

Customers participating in the Home Equity Access Scheme may be eligible for an advance payment of their loan. See Advance payments for Home Equity Access Scheme (HEAS) loans for more details.

See Advances for information on:

• Advance payments for income managed customers
• 'At Risk' customers
• Weekly payment customers
• Customers with nominee arrangements

Strongly encourage customers to use digital channels unless they are ineligible. Digital services available include Online Services, Express Plus mobile app or Interactive Voice Recognition (IVR).

Customers ineligible to use digital services to apply for an advance are:

• Customers who have a nominee arrangement in place
• Family Tax Benefit (FTB) customers who are under 18. They can claim via telephone or a service centre. They are required to have a discussion either over the phone or in person before applying to ensure consideration has been taken regarding the impacts/risks of an advance payment
• Weekly payment customers. They can apply via telephone or at a service centre
• Independent customers under 18 years of age. They are considered 'at risk' customers and must have a face-to-face interview when applying for an advance (except if rural and/or remote). Rurally isolated customers are those who live in rural or remote areas who live more than 90 minutes from a service centre and have no access to a service centre
• Customers who have a physical or intellectual barriers to accessing digital options. They can apply over the telephone or in person
• Customers applying for Pharmaceutical Allowance Advance, Farm Household Allowance Advance and/or Special Employment Advance (SEA)

Note: if the customer states self-service options are unavailable, check NNU, Newsflash and Bulletins to confirm this before processing the Advance manually.

The maximum amount a pension customer can receive is capped at 3 weeks of the Advance Payment Qualifying Amount (APQA). The minimum amount is 1 week of the APQA.

The APQA is the sum of the:

• maximum basic pension rate (relevant to the customer's marital status and before the income or assets tests are applied), and
• pension supplement minus the minimum pension supplement amount

The minimum and maximum amounts of an advance payment are subject to all other criteria that may apply to the individual's assessment. For minimum and maximum amounts of an advance payment, see the Pension Advance rates link on the Rates and Threshold page. The maximum amount may be reduced by:

• the amount the customer can afford to repay each fortnight
• the comparison with 7.5% of the customer's annual payment rate on their last payday
• previous advance payments granted in the last 13 fortnights - for more information, see the 'Applications where a previous advance payment has been made' section, below

The standard recovery period for an advance payment is 13 fortnights. The amount that is recovered from the customer's pension each fortnight is calculated on this basis.

The customer can choose to increase their repayments to pay the advance off earlier, but the advance amount originally paid will still affect any future advance entitlement until the 13 fortnights expires.

Customers must be advised of how often they can be paid an advance, prior to any advance being finalised, so the customer has a chance to change the amount.

Customers can receive multiple advance payments (as long as the minimum amount is available each time). If the customer selects to have an advance at the maximum amount they are only eligible for one advance every 13 fortnights.

Over a 13 fortnight period, a pension customer could choose to receive:

• one advance payment of the maximum amount available, or
• one or two advance payments of an amount greater than the minimum and up to the maximum, or
• three advance payments equal to the minimum amount

Note: before finalising the application, fully inform the customer of the payment amount available and the option of receiving up to 3 multiple advance payments over a 13 fortnight period.

A consumer price index (CPI) increase can affect a customer's entitlement for an advance due to the increasing minimum and maximum rates.

The Resources page contains further information and an example of advance eligibility based on changes to the CPI and further information and examples of how to calculate a customer's next available advance date.

An advance payment can only be granted if the customer can afford to repay the advance without being placed in financial hardship. This is determined by the amount the customer states they can afford each fortnight after they consider their regular fortnightly expenses.

If a customer states they have $40 left over each fortnight they will only be offered an amount equal to 13 times this amount even though they may have otherwise been eligible for a higher amount.

If a reduced or suspended repayment arrangement is in place for an existing advance (for example, Family Tax Benefit (FTB)), this should be reviewed before any new advance is assessed. If the repayments on the existing advance cannot be returned to the standard rate without causing financial hardship, a further advance should not be granted.

The maximum advance payment amount may be less than the Advance Payment Qualifying Amount (APQA) because it is compared to 7.5% of the customer's annual payment rate on their last payday (disregarding Remote Area Allowance, the minimum Pension Supplement and Energy Supplement, except for Parenting Payment Single (PPS) customers who will have the Energy Supplement included).

The lesser amount then becomes the maximum advance payment amount the individual can receive.

Following the results of the affordability test and the comparison with the actual payment rate, the amount that can be paid may be reduced by:

• the amount of any Social Security Entitlement advance payments paid during the 13 fortnights immediately before the new application was lodged, as well as
• the amount of any previous Social Security Entitlement advance payments paid within the 6 to 12 months before the new application was lodged that have not been repaid

The result is then rounded to the nearest cent (for example, 0.5c and above is rounded up).

The minimum advance payment that a pensioner can receive is set at 1 week of the Advance Payment Qualifying Amount (APQA).

Note: the maximum amount displayed on the customer's record is the result of the calculations explained above. If the maximum amount displayed is less than the minimum amount, the advance payment application will be rejected.

Both the maximum and minimum amounts will increase in line with the pension rate increases.

When the customer has been paid an advance payment any new applications may be affected if:

• An advance was paid more than 13 fortnights before the new application and that advance has been fully repaid, the previous advance payment has no effect on the new application. The customer may be eligible to receive up to 3 separate advance payments
• An advance was paid more than 13 fortnights before the new application and that advance has not been fully repaid, the total amount paid for the earlier advance payment will be subtracted from the maximum amount in the new advance calculation
• An advance was paid less than 13 fortnights before the new application, the whole amount of that advance will be deducted from the maximum amount in the new advance calculation. If the first advance amount is taken out at the maximum amount available, if the amount left is less than the minimum amount, the customer will not be eligible for a further advance until the 13 fortnights after the date the advance was paid
• The customer repays the advance early with the intent of claiming a new advance, the full amount of this advance will still be subtracted from the maximum amount until 13 fortnights after the date the advance was paid

For customers who had previously requested an advance payment to be paid in 2 instalments and the second instalment is yet to be delivered, the future delivery of the second instalment has no effect on any new application for an advance payment.

The advance payments workflow will provide the following information about entitlement to future advances on the overview page. If:

• An advance is able to be paid now, today's date will display
• A date in the future can be determined the date will be displayed. The customer should be advised that the next possible advance date is only a guide. If there is any change to their rate, the date they may be able to have an advance may also change. The information is not a guarantee of the date they will be eligible. The customer should not rely on this information as a basis to enter into financial obligations or incur expenses

The 'next possible advance date' will also be available via online and phone self service channels.

Note: the date is calculated from the information currently held on the record, and it may change if the customer's circumstances change. The only accurate assessment is on the day of application.

Due to the complexity of the rules, it is difficult to provide a future date when a customer might become eligible for an advance payment. The only accurate assessment is on the day of the application. Any calculation of the next available date is an estimate only, and may be impacted by the customer's circumstances at the time of the next application, including:

• the amount a person can afford to repay each fortnight
• increases to the Advance Payment Qualifying Amount (APQA) and the minimum amount that may be paid
• any delays in repaying a previous advance payment granted more than 6 months ago

A system limitation exists for advance payments of pensions that arises when an advance payment was granted on the customer's Entitlement Period End Date (EPED). The Resources page contains further information and examples of calculating the next advance date manually.

Note: it is not appropriate to estimate the next available date for an advance payment by using the Deduction End Date field within the Manage Advances action in Process Direct as this is not the only factor that affects eligibility for an advance payment.

Centrepay is a free bill-paying service offered to customers receiving Centrelink payments.

Through Centrepay they choose to pay bills by having a regular amount deducted from their payments and transferred electronically to an approved organisation.