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Program 1.1: Veterans’ Income Support and Allowances

Objective

Program 1.1 delivers means tested income support pensions and other allowances to eligible veterans and dependants under the Veterans’ Entitlements Act 1986 and related legislation. Income support pensions and allowances include:

  • Service Pension (Age) and Invalidity Service Pension, similar to Age and Disability Support pensions paid by Centrelink
  • Partner Service Pension paid to eligible partners of veterans
  • Income Support Supplement paid to eligible war widow/ers.

Other forms of income support paid to eligible veterans, members and former members of the Australian Defence Force or Peacekeeping Forces include:

  • Social Security Age Pension paid to eligible disability pensioners and their partners, paid by DVA as an agent of the Department of Families, Housing, Community Services and Indigenous Affairs
  • Defence Force Income Support Allowance.

Income support payments provide a regular source of income for eligible veterans, partners, widow/ers, and other eligible people with limited means.

Overview

The role of Income Support is to maintain and enhance the financial security and independence of eligible veterans and their dependants.

While the veteran population is reducing in size, it is also acknowledged that the activities undertaken within Program 1.1 are becoming increasingly complex due to a number of external factors such as population demographics, the economic climate and the increasing sophistication of clients’ personal financial arrangements and circumstances.

Expenses

As the veteran population continues to age, program expenses are expected to fall in real terms over the forward years.

Administered and Departmental expenses
  2012–13 PBS1 ($ million) Estimated actual2 2012– 13 ($ million) Outcome 2012– 13 ($ million)
Administered 2840.1 2842.9 2804.1
Departmental 53.8 52.1 55.7
Total resources 2893.9 2895.0 2859.8

1. PBS in performance reporting tables means Portfolio Budget Statements.

2. Estimated actual means the estimated expense or total for 2012-13 provided in the 2013-14 Portfolio Budget Statements. As the Budget is released in May each year but the financial year does not close off until 30 June, the current year numbers in the Budget can only be estimates.

Deliverables

The Department processes claims and reviews in order to deliver means tested income support pensions, allowances and other services to veterans and their dependants.

Deliverables
  2012-13 PBS Estimated actual 2012-13 Outcome 2012-13
New claims processed 7860 9891 10 142
Pensioner initiated reviews processed 90 760 87 107 88 647
Quantity: Number of income support beneficiaries 235 500 235 400 234 6031

1. This figure includes 12 986 Defence Force Income Support Allowance (DFISA) only recipients.

Key performance indicators

Mean time to process new claims and pansioner initiated reviews
  2012–13 PBS (Target) Estimated actual 2012–13 Outcome 2012–13
Timeliness: Mean time to process new claims (days) 32 32 41
Timeliness: Mean time to process pensioner initiated reviews (days) 14 14 22
Price: Cost per income support beneficiary $210 $203 $213
Quality: Critical error rate for income support processing <5% <5% 2%

Report on performance

New claims processed

A total of 10 142 claims were processed in 2012-13 compared to 8681 in 2011-12 (an increase of 17 per cent). The number of cases on hand fell from 1230 at 30 June 2012 to 664 at 30 June 2013 (down by 46 per cent). Intakes increased from 8974 in 2011-12 to 9576 in 2012-13 (up by 6.7 per cent). The increase in new claim intakes is attributed to the introduction of the On Base Advisory Service (OBAS) and, to a lesser extent, the introduction of the Veterans’ Pharmaceutical Reimbursement Scheme (VPRS).

Both these initiatives have seen an increase in the number of claims from veterans seeking clarification of their qualifying service status. However, it now appears that this peak has passed as the number of qualifying service applications has fallen from 1485 for the three months to 30 September 2012 to 884 for the three months to 30 June 2013 (down by 40 per cent over the past three quarters).

Figure 3 shows outcomes for new claims intake, disposals and cases outstanding for the past five years.

New claims activity 2008-09 to 2012-13, shown as number of cases: intake, disposal and outstanding.

Figure 3: New claims activity 2008-09 to 2012-13

Time to process new claims

New claims were processed in an average of 41 days in 2012-13 and 2011-12. This performance is outside the 32-day target and is attributable to a number of factors, including ongoing delays in obtaining necessary documentation and information from third parties, and an increase in the number of claims generated by the success of OBAS.

Additionally the increasing complexity of clients’ personal and financial circumstances, including the structure/range of their income and assets, requires a greater level of investigation to ensure applicants receive their correct entitlements. This has in turn placed upward pressure on the new claims processing times.

The Mean Time Taken To Process (TTTP) for all claim types over the 12 months to 30 June 2013 was 41 days. By comparison, the Mean TTTP for qualifying service applications was 44 days. The volume of these qualifying service cases processed in 2012-13 has had a significant impact on overall claim timeliness.

The Mean Outstanding Age of Claims has fallen from a peak of 44 days at December 2012 to 33 days at 30 June 2013.

Figure 4 shows the average processing time to process new claims over the past five years.

Average processing time for new claims 2008-09 to 2012-13 shown as number of days

Figure 4: Average processing time for new claims 2008-09 to 2012-13

Pensioner initiated reviews processed

A total of 88 647 pensioner initiated reviews (PIRs) were processed in 2012-13 compared to 86 980 in 2011-12. Intakes have increased by a similar margin (up by two per cent from 86 371 in 2011-12 to 88 500 in 2012-13). These increases are directly attributable to the pensioner obligation mail-outs in June 2012. These mail-outs normally increase intake by around six per cent per annum and occur every second year.

In order to communicate a range of pension and supplement changes to all DVA pensioners in the first quarter of 2013, the number of letters sent in the March 2013 Statutory Increase (SI) mail-out was significantly greater than normal. Subsequently there was a higher than normal intake of PIRs. Intakes for the June 2013 quarter were 22 480 compared to 19 965 for the June 2012 quarter.

The amount of work on hand at 30 June 2013 was 47 per cent lower than at 30 September 2012 (2865 cases compared to 5353). This reduction was due to the concerted effort to reduce the backlog of cases accumulated after the obligation mail-out and the higher than expected intake from the March SI.

Figure 5 shows outcomes for PIR intake, disposals and cases outstanding for the past five years.

Pensioner initiated review activity 2008-09 to 2012-13 shown as number of cases: intake, disposal and outstanding.

Figure 5: Pensioner initiated review activity 2008-09 to 2012-13

Outcomes of pensioner initiated reviews

In 2012-13, the processing of PIRs resulted in pension increases for 31 642 clients (average fortnightly increase of $46.79 per client), and a pension decrease for 38 147 clients (average fortnightly decrease of $33.07 per client). A further 42 026 clients notified the Department of changes to their personal and financial circumstances which did not result in an immediate pension change but required updates to their records through the PIR process.

The processing of a PIR can impact on the pension payments of each member of a pensioner household. As a result, the client numbers are always higher than the case numbers as the majority of income support households contain two persons (i.e. the veteran and their partner).

Time to process pensioner initiated reviews

Time to process PIRs in 2012-13 was 22 days on average compared to 16 days in 2011-12 and against a target of 14 days. The focus on finalising older outstanding cases has impacted on the timeliness figure; however, the number of outstanding cases is now at its lowest level in the last five years and the age of outstanding cases has reduced over the past few months from a high of 40 days in February 2013 to 25 days at 30 June 2013.

As with the processing of new claims, the increasing complexity of clients’ personal circumstances and the sophistication of their financial affairs, as well as the fluctuating economic climate have all contributed to a need for a greater level of investigation within PIRs. Additional time taken during the investigation process helps to ensure clients continue to receive their correct entitlements.

Figure 6 shows the average time to process PIRs over the past five years.

Average processing time for pensioner initiated reviews 2008-09 to 2012-13 shown as number of days

Figure 6: Average processing time for pensioner initiated reviews 2008-09 to 2012-13

Price

The cost per income support beneficiary in 2012-13 was $213 compared with $220 in 2011-12.

Quality

The critical error rate of two per cent for income support processing in 2012-13 was well within the target of five per cent.

Departmental initiated reviews processed

A total of 46 829 departmental initiated review (DIR) cases were processed in 2012-13 compared to 59 289 in 2011-12 (a reduction of 21 per cent). Intakes have reduced by a similar margin (down by 23 per cent from 59 507 in 2011-12 to 45 996 in 2012-13). The amount of work on hand has fallen by 25 per cent from 3391 cases at 30 June 2012 to 2558 at 30 June 2013. The reduced DIR activity was a deliberate strategy to meet resource reductions.

Figure 7 shows outcomes for DIR intake, disposals and cases outstanding for the past five years.

Departmental initiated review activity 2008-09 to 2012-13 shown as number of cases: intake, disposal and outstanding

Figure 7: Departmental initiated review activity 2008-09 to 2012-13

Time to process departmental initiated reviews

The time to process DIRs has increased from an average of 22 days in 2011-12 to 33 days in 2012-13. This is 5 days above the target of 28 days, reflecting the increased complexity of reviews undertaken and the growing sophistication of pensioners’ financial affairs.

Figure 8 shows the average time to process DIRs over the past five years.

Average processing time for departmental initiated reviews 2008-09 to 2012-13 shown as number of days

Figure 8: Average processing time for departmental initiated reviews 2008-09 to 2012-13

Outcomes of departmental initiated reviews

In 2012-13, the processing of DIRs resulted in pension increases for 13 953 clients (average fortnightly increase of $69.23 per client), and a pension decrease for 18 970 clients (average fortnightly decrease of $51.16 per client). The Department undertook essential DIRs for a further 24 571 clients that did not result in an immediate change to the pension rate but ensured client records were updated to maintain correct pension rate calculations into the future.

The processing of a DIR can impact on the pension payments of each member of a pensioner household. As a result, the client numbers are always higher than the case numbers as the majority of income support households contain two persons (i.e. the veteran and their partner).

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