Qualification and assessment of Pension Bonus Payment (PBP) 065-07030040

A person can be working varying hours on a casual basis as long as they complete a minimum of 960 hours during each 12 month bonus period. A seasonal worker could work a high number of hours per week during their 'season' and exceed the 960 hours needed for the bonus period. The customer would not need to work during the remainder of that full year bonus period.

Bob and Betty are both registered members of the PBS. During the first full year bonus period, Betty works for 1680 hours and Bob works for 700 hours.

Bob does not pass the work test, however, Betty does.

Therefore, Bob's work is disregarded and they each accrue a full year bonus period on the basis of Betty's work. Betty's excess hours cannot be transferred to top up Bob's.

A bonus period corresponds to each 365 days of accruing membership of the PBS. This may not be 365 consecutive days, as the period of accruing membership may be broken by periods of non-accruing membership.

For more information on accruing and non-accruing membership, see:

• Accruing membership of the PBS
• Non-accruing membership of the PBS

Bill registered for the Pension Bonus Scheme (PBS) on 65th birthday. Bill works a total of 540 hours over a period of 215 days, receives weekly compensation for 115 days and then returns to work.

To accrue a full year bonus period Bill will need to work a further 420 hours (540 + 420 = 960 hrs) over the next 150 days (215 + 150 = 365 days).

The period for which Bill received weekly compensation payments is a non-accruing period. This has the effect of extending the first 'full year' bonus period to 480 days (365 + 115 days).

Compensation periods are regarded as non-discretionary non-accruing periods and so effectively extend the bonus period by an equivalent length of time.

John works the required 960 hours over a period of 43 weeks before taking 5 weeks sick leave. The period of sick leave is a non-accruing period. However, sick leave is regarded as discretionary and will not extend John's bonus period because the work test has been met.

If a customer dies before claiming the bonus there is no entitlement to the pension bonus, however from the 1 January 2008, if the deceased was partnered, there may be an entitlement to a Pension Bonus Bereavement Payment (PBBP).

If a non-customer's working partner dies and the customer has accrued at least 1 full year bonus period, they may have some entitlement to the bonus and can still use the deceased partner's work history to accumulate a bonus period for themselves:

• They have 13 weeks from the date of death to claim any pension bonus they have accrued in their own right
• If the customer is affected by extreme grief or is unable to cope with the loss of their partner, they can be considered a non-accruing member for 13 weeks from the death of their partner. This effectively extends the period allowed to claim to 26 weeks

As a result of Cyclone Larry, some customers registered in the scheme will no longer meet the scheme's work test.

Members whose gainful work has reduced due to the disaster and who are performing 'domestic duties'

If on or after 1 March 2006 a 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.

Members whose gainful work has reduced due to the disaster who are involved in disaster-related activities outside their own home

Existing legislation allows Centrelink officers to determine under Social Security Act 1991, section 92Y, Secretary's discretion to treat activity as gainful work to allow periods spent by the members in these activities (that would not normally be considered gainful work) to be taken as periods of gainful work. This would apply for a maximum of 13 weeks. These members would continue to be accruing members during that period.

Members whose gainful work has reduced due to a disaster and either are not involved in disaster related activities of any kind or who have volunteered to assist in disaster - related activities with a charitable, welfare or community organisation

The Department of Social Services (DSS) Secretary is being asked to sign a legislative instrument under Social Security Act 1991, section 92Q, Non-accruing membership - Secretary's discretion that will allow these members to continue as non-accruing members of the scheme for a period of up to 13 weeks. Legislation requires that the earliest start date is the day after registration of the declaration with the Attorney-General's Department.

A non-accrual period cannot be given under this criteria until the DSS Secretary has signed a legislative instrument under Section 92Q of the Social Security Act 1991 (the Act).

General issues

The benefit of these time extensions under Sections 92Y(1), 93A(1) and 92Q(1) of the Act for scheme members is limited to 13 weeks.

To prevent a scheme member from getting the benefit of 3 consecutive extension periods, each of 13 weeks duration, under sections 92Q(1), 92Y(1) and 93A(1), a policy decision has been made to limit the total sum of time extensions across all 3 sections of the Act to a maximum of 13 weeks.

Members receiving ex-gratia payments

Ex-gratia payments, included as part of a package of assistance for victims of a disaster, will not disqualify a scheme member from receiving a bonus at a later stage. A scheme member will continue to accrue a bonus whilst in receipt of an ex gratia payment.

Members claiming Age Pension

There is no discretion that can be applied within the legislation. Pension Bonus Scheme (PBS) members affected by a major disaster need to decide for themselves the costs and benefits of claiming both payments now versus claiming both payments at some later time in the future.

Refer to the Level 2 Policy Helpdesk for help applying these policies and legislation.