Assessment of assets hardship 108-04120040

Is the customer or partner currently being paid under the asset hardship provisions and has there been a change in their income or asset?

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

Note: where a customer is paid under the asset hardship provisions, the grant letter provides details of the customer's notification requirements.

A claim for hardship can be considered when the customer has made a claim for payment, and:

• the payment has been cancelled or rejected due to excess assets, or
• for pensioners, the customer's payment is paid at a reduced rate because of the assets test. See Assets hardship for income support payments

Before inviting a claim under asset hardship provisions:

• check the customer's income and assets are up to date
• check the customer meets the assets hardship criteria for their pension or their income support payment, and
• discuss the case with a Complex Assessment Officer (CAO) from the Asset Hardship Team. See Resources page for instructions and a link to Office Locator

Service Officers are to take no action to approve or reject payment under the assets hardship rules. All cases must be referred to the CAO for determination.

Has the case been discussed with a CAO from the Asset Hardship Team and claim recommended?

• Yes:
• issue an SA233 - Claim for consideration under hardship form, to the customer. If both members of a couple wish to apply, each will need to complete a claim. They have the option of lodging separate or dual claims
• tell the customer supporting documentation will be needed. See Resources page for examples of where it may be unreasonable to sell an asset
• tell the customer to return the SA233 to Services Australia as soon as possible
• Procedure ends here until SA233 is returned
• No, and the customer needs to be contacted to discuss:
• send a Fast Note - select Auto Text, use Complex Assessment > Request for CAO Action > CAO Asset hardship
• include an overview of the special circumstances that have led to the customer potentially seeking consideration under assets hardship
• procedure ends here

Is the customer reporting wages?

• Yes, go to Step 5
• No, go to Step 4

A reassessment may be needed if the new information received:

• is dated after the current assessment date, and
• is about the customer's income and/or assets
• is a change of circumstances which would impact the assets hardship assessment

Is a reassessment needed?

• Yes:
• Verbal advice can be taken
• Send a Fast Note - select Auto Text, use Complex Assessment > Request for action > CAO Asset hardship.
• Include details of the change in circumstance, income or assets and how the notification was provided
• Procedure ends here
• No, procedure ends here

Asset hardship customers who report wages must have their rate recalculated manually by a Complex Assessment Officer.

Send a Fast Note - select Auto Text, use Complex Assessment > Request for action > Wage report asset hardship – refer CAO.

Include details of the employer, dates wages paid, amounts and hours worked.

Procedure ends here.

Is the person’s pension or benefit precluded or reduced (pensions) due to the application of the assets test?

• No, Asset hardship provisions do not apply. Go to Step 10
• Yes, go to Step 2

A decision under the asset test hardship provisions takes effect from the lodgement day of a signed claim form (SA233). The Social Security Act 1991 (sections 1129, 1130B and 1131) contain provisions that allows a delegate to backdate a claim for asset hardship for up to 6 months before the signed claim form was lodged. These backdating provisions do not mean that a claim must be lodged within 6 months after the rejection of claim for pension.

As most customers have limited knowledge of the asset hardship provisions, the CAO should view favourably a request to grant for an earlier period in most circumstances. This can be to the date the customer was first assessed or affected under the assets test as long as it’s within 6 months of the signed SA233 being lodged.

Note: when backdating claims for Asset Hardship, consideration will need to be given for any CPI increases or changes to the asset test that have occurred after grant. Rate calculations will need to be undertaken for initial date of event and any subsequent date where the rate will change.

Go to Step 3.

A customer who has deprived themselves of assets and/or income would not normally be considered eligible under the hardship provisions, even though they may be suffering severe financial hardship.

However, there may be cases involving unusual circumstances which appear to warrant additional consideration. Social Security Act 1991 section 1129(1)(b)(ii) for pensions or 1131(1)(d)(ii) for benefits, allows the agency to disregard the value of deprivation under hardship provisions, if appropriate.

Asset hardship may still be considered if:

• the severe financial hardship is not a direct result of the disposal of income and/or assets but of some other unforeseen event, and
• the customer would have been eligible under the hardship provisions had the disposal not taken place

If it is decided that asset hardship can still be considered, the deprived asset or income is taken into account in the eligibility calculation and the customer must still meet all other eligibility criteria.

Deprivation does not apply if a customer gifts:

• assets under $10,000 in a financial year, and
• under $30,000 in a 5 year rolling period

Entitlement to assets hardship is determined on the basis that the customer still has the asset. Notional income will be assessed on the asset disposed of. Income actually received from the asset just before the disposition is assessed under section 1130(9) for pensions, or section 1132(7) for benefits.

Go to Step 4.

On the Claim for consideration under hardship form (SA233), a customer will advise which asset(s) they want disregarded.

For more information, see Unrealisable assets under the Asset Test hardship provisions.

Does the customer have an unrealisable asset?

• Yes, go to Step 5
• No, hardship provisions do not apply. Go to Step 10

In addition to having an unrealisable asset, to qualify for the asset hardship provisions a person must also be in severe financial hardship.

See Severe financial hardship under the Assets Hardship Test provisions to determine severe financial hardship.

Is the customer in severe financial hardship?

• Yes, go to Step 6
• No, asset hardship provisions do not apply. Go to Step 10

Asset hardship is not payable where an allowance customer or their partner qualifies for other Commonwealth assistance which is equivalent to income support payments.

For example:

• Department of Veterans' Affairs (DVA) pension
• Payments made by or on behalf of a government department

Is the customer eligible for other Commonwealth assistance?

• Yes, asset hardship provisions do not apply. Go to Step 10
• No, go to Step 7

All assets disregarded under the hardship provisions (except household contents, personal effects, and one motor vehicle) will be deemed to produce a notional rate of income.

See Notional income on unrealisable assets to calculate the notional income to be assessed for unrealisable assets.

Go to Step 8.

From the maximum annual rate of pension (including Pension Supplement) or benefit, SUBTRACT:

• A. The annual rate of ordinary income (other than income from assets) of the customer and partner. For example, employment income, superannuation or investment income. Note: this income is not to be reduced by:
• Work Bonus
• Working Credit, or
• Student Income Bank
• B. Any income received by the customer and partner from assets that are not assets tested, including:
• assets disregarded at step 4 above (unrealisable assets), and
• assets disregarded under subsection 1118(1) of the Social Security Act 1991(exempt assets)
• C. For each unrealisable asset calculate the greater of:
• the annual rate of income actually received, or
• the annual rate of notional ordinary income, minus the actual income in B above
  If the actual income received is more than the amount of notional income, the actual income received is taken into account at B above, and no notional income is assessed
• D. For each whole $250 in value of assets that are not unrealisable and not exempt:
• $19.50 per year, for pensions, or
• $1 per fortnight for allowances or benefits
• Do not include any assets not taken into account above (disregarded assets, home contents and the value of one vehicle), and assets not taken into account under subsection 1118(1)
• E. The result is the rate paid under hardship rules. The hardship rate remains subject to a rate check as detailed in F
• F. If:
• the rate worked out above plus all other income of the customer and partner is more than the applicable maximum rate, reduce the rate paid under hardship provisions by the excess
• there is no excess, apply the original hardship rate calculated
• the rate payable under the asset hardship provisions is lower than the rate payable under the normal assets test, the higher rate is payable. Therefore, the customer will not be paid under the asset hardship provisions

Note:

• For items A), B), C), D), and E) above, halve the deductions for members of a couple
• When working out the rate, no notional income applies for household contents, personal effects and one vehicle

Is the rate payable under the asset hardship provisions higher than the applicant’s current rate of payment?

• Yes, go to Step 9
• No, asset hardship provisions do not apply. Go to Step 10

On completing the assessment:

• record details of the asset hardship decision on a DOC, and
• for grants, create a Display on Access DOC with instructions for notification events

DOA text:

Manual rate - Customer is paid under asset hardship provisions. A manual rate is coded on the Manual Assessment (MAS)/Manual Rate (MAR) (or Rate Component Override RCO) screens. Please escalate any changes in income or assets to CAO for manual rate recalculation.

If the customer reports employment income, please refer the details to an asset hardship CAO by using Fast Note. See Table 1, Step 5.

Refer to Online Document Recording (ODR) for the DOA DOC process.

Reassessment for a change of income and assets

Update the customer's record and apply the new manual rate of payment, to code:

• allowance customers, go to Step 11
• pension customers, go to Step 12

Claim granted under asset hardship provisions

When assets hardship provisions need to be applied for a current customer:

• update the customer's record and apply the manual rate of payment. To code pension customers, go to Step 12
• send a Q999 letter to the customer telling them the claim is granted. See Resources page for Q999 template

If assets hardship assessment is for a payment that has been rejected because of excess assets:

• Send a Fast Note asking for the rejected claim to be reassessed, because of the grant of asset hardship
• DOC instructions for coding, including the start date
• To code:
• allowance customers, go to Step 11
• pension customers, go to Step 12
• send a Q999 letter to the customer telling them the claim is granted. See Resources page for Q999 template

• Document the reasons for rejection
• send a Q461 letter to the customer telling them the claim is rejected
• Make adverse decision phone call

• Access the Newstart (NSS) system
• Go to the Rate Component Override (RCO) screen
• Code the start date (date of the original claim) and end date (as recommended by the CAO). If customer has any income coded and this is to be exempted due to assets hardship code start and end date again on new line
• In the Type: field, code VHR
• In the Reason: field, code SYS
• Select [Enter] and a new line will appear on the RCO screen
• In the Type: field, code one of the following reasons:
• 'VCD' - Continuing direct deduction
• 'VCE' - Continuing earned income
• 'VCM' - Continuing compensation direct deduction
• 'VCU' - Continuing unearned income
• 'VIB' - Income - Bank Amount
• In the Reason: field, code 'SYS'
• Code zero in the Amount: field
• Select [Enter] and a new line will appear on the RCO screen. Note: once [Enter] has been selected the amount will disappear

If customer is to be paid at a manual rate:

• Code the start date and end date again on the new line
• In the Type: field, code 'VBM'
• In the Reason: field, code 'SYS'
• In the Amount: field, code the manual rate recommended by the CAO:
• only code the basic rate on the VBM line
• do not code any other rate components, such as Energy Supplement, Pharmaceutical Allowance and Rent Assistance, as they will be paid automatically.
• the only exception to this is if the rate of one of these components is reduced due to the asset hardship rate calculation, that is, the customer eligible to a rate lower than the basic rate

The Working Credit Rate Override (WCRC) screen must be coded before the transaction is finalised.

Note: coding the RCO screen, rather than the MAS/MAR screen, will ensure any income coded on an NSS customer's record will affect the rate of the partner's payment correctly. This is if the VCE/VCU line is coded which tells the system to ignore certain income. If the customer’s income or assets change or they report employment income, refer the case to the CAO to recalculate the rate payable under the asset hardship provisions.

Record the details on a DOC.

Procedure ends here.

• While in the customer's record, go to the MAS screen by coding 'MAS' in the Nxt: field
• Code the date from which the manual rate applies in the Effect Date: field
• Code 'MAN' in the Type: field
• Code the reason code 'HAR' in the Manual Rate Reason: field
• Code the Source and DOR. Select [Enter]
• Code DOC in the Nxt: field
• Record the details on the DOC of the manual rate, giving full details of the CAO recommendations, and review details
• Code 'AR' in the Nxt: field
• Select the assessment line with a 'T'. This goes to the RATS screen
• Select the required assessment line with a 'M'. This goes to the MAR screen
• Code the Frequency: file to 'DLY' to code a daily manual rate, '2WE' to code a fortnightly manual rate, or 'ANN' to code an annual manual rate. Note: annual frequency only available in the PEN system
• If the customer is under Age pension age, code the Working Credit Rate Override (WCRC) screen
• Code the manual rate payable for each component, as advised by the CAO in the New: field. If a component is no longer payable, code a new rate of zero. Select [Enter]
• Check the result on the AR screen is correct
• Code 'Y' to approve on the AR screen. Select [Enter]

Procedure ends here.