Debts resulting from internal transfers and clearances 107-02020010

Customers receiving a pension can claim a benefit or allowance. The pension can only be paid up to and including the day before the benefit or allowance starts. The pension will usually be cancelled before the person claims a benefit or allowance.

Where payment of pension continues pending the outcome of the benefit or allowance claim, an automatic termination debt occurs.

The automatic termination provision applies when people transfer from pension to pension. For example, Disability Support Pension (DSP) to Age Pension.

If payments overlap, an automatic termination debt becomes recoverable under section 1223(1) of the Social Security Act 1991.

When a customer is receiving a benefit or allowance and a pension becomes payable to them:

• The benefit or allowance ceases to be payable the day before the pension becomes payable
• This includes where a decision to grant pension is made at a later date

The automatic termination provision applies when payments overlap. The debt is recoverable under section 1223(1) of the Social Security Act 1991.

For example, payments from JobSeeker Payment (JSP) may continue pending the determination of Disability Support Payment (DSP). Any JSP payments paid on or after DSP becomes payable is a recoverable debt.

Note: if a customer transfers from a Coronavirus Supplement eligible income support payment to a Coronavirus Supplement non-eligible income support payment:

• the customer will receive net arrears, and
• any residual excess Coronavirus Supplement received is not recoverable

For more information, see Coronavirus Supplement.

Where a customer transfers from one benefit or allowance to another, the incidence of excess payments should be small. Usually the first benefit or allowance is cancelled before the customer seeks an alternative income support.

Payment of one benefit or allowance can continue after a customer has been granted another benefit or allowance. If the payment continues on or after the date another payment is paid it becomes a debt.

Customers receiving social security payments can be granted a back dated pension by the Department of Veterans' Affairs (DVA). The social security payment paid during the period of DVA payability is recoverable under the Veterans Entitlement Act. Notification of income from DVA can be provided by DVA or the customer.

A clearance must be obtained from DVA when customers advise, during a new claim, they are receiving DVA payments.

The clearance requests the:

• date of grant of payment from DVA
• type of payment
• date of any changes to the payment
• amounts paid