Effect of periodic compensation on partner's income support payment 117-03010010

Check the Periodic Payment Details screen. The Incident after CAP grant: field will be 'No' if the compensation recipient was not receiving a CAP at the time of the compensable event.

Did the compensable event occur prior to the compensation recipient receiving a compensation affected payment (CAP)?

• Yes, go to Step 3
• No, go to Step 2

The periodic compensation will be assessed as ordinary income for the compensation recipient. This may affect the partner under the applicable ordinary Income Test.

• Go to the Periodic Payment Details screen
• Record the periodic payments. See Coding and raising debts for periodic compensation payments
• Code the Recipient Assessment Benefit/Pension Rate with the compensation recipient's current payment stream
• Code the Recipient Assessment CAP Qualified with 'Y'es

Procedure ends here.

Work out if the person receiving the periodic compensation is qualified for a CAP.

If the compensation recipient:

• was receiving a CAP prior or during the periodic payment period or immediately prior to the periodic payments commencing, consider they may qualify for that CAP. Go to Step 6
• has not claimed a CAP, go to Step 4
• is in receipt of ABSTUDY, go to Step 5
• partner is in receipt of a saved compensation affected payment (SCAP) or non-CAP, go to Step 8

Treat the compensation as ordinary income of the compensation recipient.

Check the customers:

• Department of Veterans' Affairs (DVA) compensation affected pensions on the Veterans Affairs Pension (DVA) screen. These pensions are deemed as a CAP and should be assessed as qualified for a pension. They include:
• Invalidity Service Pension
• Partner Service Pension
• Veterans Payment
• Income Support Supplement (ISS)
• Payments and if they are not affected by compensation, that is, ABSTUDY
• Residency, see Australian residence requirements for payment
• Other reasons, customers who have returned to work and who are receiving part compensation may not be qualified for a CAP

A compensation recipient will not qualify for a CAP if they are:

• not residentially qualified
• subject to a non-resident's waiting period, or
• in receipt of ABSTUDY

Apply a beneficial approach when assessing how the excess compensation affects the partner. Where the partner is in receipt of a:

• Pension, assess the compensation under the Pension Income Test. This would be the most beneficial assessment for the couple
• Benefit or Parenting Payment, and
• the partner and compensation recipient are under age Pension Age, assess the compensation payments under the Benefit Income Test
• the compensation recipient is of Age Pension age, assess the compensation payments under the Pension Income test

Can it be considered that the compensation recipient qualifies for a CAP?

• Yes, go to Step 6
• No, go to Step 5

If not qualified due to the compensation payments, treat all of the periodic compensation as the recipient's own ordinary income when calculating their partner's CAP rate.

• Go to the Periodic Payment Details screen
• Record the periodic payments. See Coding and raising debts for periodic compensation payments
• Code the Recipient Assessment CAP Qualified with 'No'

Treat any excess as ordinary income when calculating their partner’s rate.

Procedure ends here.

If the compensation recipient:

• was receiving a CAP during the periodic payment period or immediately prior to the periodic payments commencing, then consider they were qualified for the maximum basic member of a couple rate of that CAP
• is deemed to qualify for a CAP, consider they are qualified for the maximum basic member of a couple rate of the payment stream

Check if it is a pension or benefit

• Go to the Periodic Payment Details screen
• Code the Recipient Assessment Benefit/Pension Rate as determined above
• Code the Recipient Assessment CAP Qualified with 'Yes'

Only the Compensation Recovery Team (CRT) can override system defaults on the Periodic Payment Details screen.

See Coding and raising debts for periodic compensation payments.

If Smart Centre or service centre staff detect a change in circumstance that means these defaults need to be changed, refer to CRT. Use Fast Note - select Auto Text, use Compensation > Referral > Periodic Payment adjustment required.

This may happen if the customer reaches Age Pension age and the periodic compensation continues.

Do not calculate excess compensation for the partner if the compensation recipient:

• has not claimed a CAP or
• is receiving a SCAP or non-CAP

Treat the compensation as the recipient's own ordinary income when calculating the partner's rate.

If the compensation recipient has claimed a CAP:

• direct deductions apply to the recipient
• disregard the periodic compensation entirely when calculating the partner's rate