Assessment of circumstances for a couple separated due to illness 277-50070020

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Scenario

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Customer scenario - Parenting Payment Partnered (PPP) customer separated by illness

Val (a PPP customer) and partner Bob, live in a remote area that is approximately 150 kilometres from their nearest hospital. Bob has recently suffered from a rare blood disorder and requires regular life-saving transfusions. Because of this medical condition, Bob has been admitted to the hospital as an aged care facility type patient and Val is still living at their homestead. Val drives in to see Bob almost daily with their child, Tammy to make sure that Bob is comfortable.

Val and Bob are still a member of a couple and would therefore, be classed as an illness separated couple. Val's PPP can now be paid at the illness separated rate. While Val's Family Tax Benefit (FTB) Part A does not require an income test as Val is receiving an income support payment, the entitlement to FTB Part B is still assessed on the lower earner's income.

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Customer scenario - customer separated by illness and assessment of living expenses

Daniella and George (Age Pension customers) live with their son, Dennis, at Dennis's home. Dennis owns the home and pays for all utilities. George's medical condition has deteriorated, and George has been admitted to a hospital on an indefinite basis.

Daniella requests to be assessed as illness separated.

When determining whether Daniella's cost of living expenses have increased or are likely to increase due to illness separation, Service Officers must take into account factors such as transportation, medication, and the loss of ability to pool resources.

Where it is evident from discussions with the customer, there is no increase to the cost of living expenses. It may mean the customer is not eligible for illness separated provisions.

Evidence of the customer’s increased living expenses is generally not required for the assessment. Evidence of increased living expenses should only be requested if there is genuine doubt about the information provided by the customer.

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Scenario

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Customer scenario - living separately and apart due to one member of a couple entering care

Tanya and Glen are married and own a home together. Glen has advanced stages of Alzheimer's disease and must now move into care. Due to Glen's specific type of neurological disorder, once entering care Glen and Tanya could be entitled to be assessed as living separately and apart (that is, genuinely separated).

If Glen and Tanya want to be assessed as illness separated, Tanya's income of $80,000 per year would affect Glen's pension. As Tanya is now responsible for the mortgage, Tanya may find it difficult to help Glen in paying for the care facility.

If they were assessed as living separately and apart Tanya's income and assets would not be taken into consideration when assessing Glen's pension. The income tested fees of Glen's care residence would be based on Glen's income and assets alone.

After the 2 years exemption on Glen's former principal home, Glen's portion of the principal home would then be considered an asset for pension purposes and the higher non-homeowner asset threshold applies.

The value of Glen's assets may then affect the rate of his pension. If this occurs, Glen may wish to apply under the asset test hardship provisions.

The References page has a link to Social Security Guide, 4.6.7, Asset Hardship Rules.

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Customer scenario - living separately and apart due to one member of a couple entering care

Bert and Elsie have been married for 60 years and own their marital home. Bert has been a permanent resident in high level residential aged care for over 2 years and is not cognisant of Elsie or the family.

As a member of a couple, Bert's daily aged care income tested fees are based upon half of the combined income of Bert and Elsie as they are an illness separated couple.

If Bert and Elsie's relationship is considered to have ceased due to ill health and they went from illness separated to living separately and apart, Bert's daily aged care income tested fees would thereafter be based on Bert's income alone.

As Bert no longer has a partner and has been in care for more than 2 years, the half share of the former principal home would now be counted as an asset for pension purposes unless another exemption was applicable.

While Bert would now have the benefit of the higher non-homeowner asset threshold for pension purposes, the rate of income support payment could be affected depending on the half share of the asset value of the former principal home. Where the value of Bert's assets affects the rate of pension, Bert may wish to apply under the asset test hardship provisions.

The References page has a link to Social Security Guide, 4.6.7, Asset Hardship Rules.

Note: as Bert and Elsie have no income except their pensions, and no assets except their principal home, their illness separated classification did not affect Bert's rate of pension. Under illness separated, and while Elsie remains in the former principal home, the home continues to be an exempt asset while Elsie lives there. The 2 year exemptions commence from when the remaining partner later vacates the principal home to enter care or dies. Should Bert and Elsie remain on illness separated and not transfer to living separately and apart they may qualify for a higher rate of pension.

For more details, see Vacation of principal home due to illness.