4.6.7.10 General Provisions for Hardship

Summary

Hardship provisions ensure a social security pension customer (section 23(1)-'social security pension'), or social security benefit customer (section 23(1)-'social security benefit') who is in severe financial hardship (1.1.S.120) is able to get additional assistance, irrespective of the normal application of the assets test.

This topic discusses, for pension and benefit customers ONLY, the:

• rationale for hardship provisions,
• eligible customers,
• basic eligibility criteria,
• steps for assessing the eligibility of pension and benefit customers,
• review procedures, and
• action a customer can take if they do not qualify for hardship assistance.

Act reference: SSAct section 23(1)-'social security benefit'

Rationale for hardship provisions

The assets test presumes pension and benefit customers with substantial assets (1.1.A.290), apart from their principal home (section 11A(1)), use those assets to produce income (section 8(1)-'income') for their own support. If substantial assets are held, but they produce little or no income, a customer is expected to rearrange their financial affairs before calling on the community for income support through the social security system.

Sometimes a pension or benefit customer is unable, or in the case of a pensioner could NOT reasonably be expected, to rearrange their financial affairs. Hardship provisions may mean that these customers are able to have certain assets disregarded when calculating their pension or benefit rate. Assets which are disregarded for hardship purposes are called 'unrealisable assets' (section 11(1)-'unrealisable asset') in the SSAct.

Exception: There are no hardship provisions for dependent young people under the YA Family Assets test.

Act reference: SSAct section 11A(1) Principal home, section 8(1)-'income', section 11(1)-'unrealisable asset'

Eligible customers

Hardship provisions can ONLY apply to a customer who is qualified for a:

• social security pension, OR
• social security benefit.

Exception: A benefit customer who qualifies for alternative Commonwealth assistance is NOT eligible for hardship provisions.

Eligibility criteria for hardship

To qualify for hardship provisions a pension or benefit customer MUST be:

• in severe financial hardship, AND
• unable to sell or borrow against an asset (or in the case of a pensioner customer it is unreasonable to expect the person to sell or borrow against an asset), AND
• an assets tested customer.

Assessing pension & benefit customers

The following table shows the steps to be taken when assessing hardship for pension and benefit customers.

Review procedures

Hardship cases are reviewed annually. Temporary hardship cases (1.1.P.205) are reviewed at 3 monthly intervals.

Policy reference: SS Guide Part 6 Reviews, Debts & Payment Recovery

Action an ineligible customer can take

A delegate MUST advise a customer who is of age pension age (1.1.P.129) or whose partner (1.1.P.70) is of age pension age that they may be able to participate in the PLS if they do not qualify for hardship assistance. A delegate MUST also advise the customer that PLS and hardship assistance are MUTUALLY EXCLUSIVE.

Act reference: SSAct section 1129 Access to financial hardship rules - pensions, section 1130B Access to financial hardship rules - pension PP (single), section 1131 Access to financial hardship rules - benefits

Policy reference: SS Guide 3.4.5 PLS - Qualification & Payability, 4.1 Deprivation of Income & Assets

_______________________________________________________

Last reviewed: 2 January 2007