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Programme 1.1: Veterans’ Income Support and Allowances

Objective

Programme 1.1 delivers means-tested income support pensions and other allowances to eligible veterans and dependants under the Veterans’ Entitlements Act 1986 (VEA) and related legislation.

Income support pensions and allowances include:

  • age service pension and invalidity service pension, similar to age and disability support pensions paid by the Department of Human Services
  • partner service pension paid to eligible partners of veterans
  • income support supplement paid to eligible war widows and widowers.

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 Human Services
  • Defence Force Income Support Allowance.

Overview

Income support provides a regular income for eligible veterans and their dependants with limited means.

Income support payments are determined according to eligibility criteria under the VEA or other legislation. Pensions are subject to an income and assets test and are subject to routine reviews.

While the veteran population is reducing in size, the activities undertaken within Programme 1.1 are becoming more complex due to the increasing sophistication of veterans’ and their dependants’ personal financial arrangements and circumstances.

Expenses

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


Administered and Departmental expenses – Programme outcomes against Budget
  2013–14 PBS ($M) ESTIMATED ACTUAL 2013–14 ($m) OUTCOME 2013–14 ($m)
Administered 2,835.6 2,784.6 2,794.1
Departmental 52.8 53.3 61.5
Total resources 2,888.4 2,837.9 2,855.6

PBS = Portfolio Budget Statements

Deliverables

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

Deliverables – Programme outcomes against Budget projections
  2013–14 PBS ESTIMATED ACTUAL 2013–14 OUTCOME 2013–14
New claims processed 8,812 9,303 10,182
Pensioner initiated reviews processed 81,494 83,683 81,525
Quantity: Number of income support beneficiaries 221,700 220,700 219,1531

PBS= Portfolio Budget Statements

  1. This includes 12,818 beneficiaries in receipt of only the Defence Force Income Support Allowance (data as at 31 March 2014).

Key performance indicators


Key Performance Indicators – Programme outcomes against Budget target
  2013–14 PBS ESTIMATED ACTUAL 2013–14 OUTCOME 2013–14
Timeliness: Mean time to process new claims (days) 32 32 34
Timeliness: Mean time to process pensioner initiated reviews (days) 14 14 21
Price: Cost per income support beneficiary 218 219 253
Quality: Critical error rate for income support processing < 5% < 5% 2.6%

PBS= Portfolio Budget Statements

Report on performance

New claims processed

A total of 10,182 claims were processed in 2013–14 compared to 10,137 in 2012–13 (an increase of 0.4 per cent). The number of cases on hand fell, from 787 at 30 June 2013 to 705 at 30 June 2014 (down by 10.4 per cent). Intakes increased from 9,692 in 2012–13 to 10,100 in 2013–14 (up by 4.2 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 of those initiatives encouraged veterans to seek clarification of their qualifying service status, which resulted in an increase in the number of claims. Qualifying service applications have more than doubled in the past four years, from 1,954 in 2010–11 to 4,675 in 2013–14. This year’s intake of 4,675 qualifying service applications is 12.8 per cent more than the 4,144 received in 2012–13.

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

Figure 3: New claims activity 2009–10 to 2013–14

New claims activity 2009-10 to 2013-14, shown as number of cases: intake, disposal and outstanding

Time to process new claims

New claims were processed in an average of 34 days in 2013–14 and 41 days in 2012–13 and 2011–12, compared to 39 days in 2010–11 and 42 days in 2009–10. The performance in 2013–14 is outside the 32-day target but is a significant improvement on performances in previous years. Performance 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 and 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 processing times for new claims.

The Mean Outstanding Age of Claims has fallen from a peak of 41 days at December 2013 to 34 days at 30 June 2014.

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

Figure 4: Average processing time for new claims 2009–10 to 2013–14

Average processing time for new claims 2009-10 to 2013-14, shown as number of days

Pensioner initiated reviews processed

A total of 81,525 pensioner initiated reviews (PIRs) were processed in 2013–14, compared to 88,647 in 2012–13 (a decrease of 8 per cent). Likewise, intakes have decreased by a similar margin (down by 7.5 per cent from 88,710 in 2012–13 to 82,085 in 2013–14). The decrease is directly attributable to the pensioner obligation mail-outs in June 2012. The mail-outs normally increase intake by around 6 per cent per annum and occur every second year. The mail-out in June 2014 is expected to result in increased intakes in 2014–15.

The amount of work on hand at 30 June 2014 was 40 per cent lower than at 31 December 2013 (3,639 cases compared to 6,080).

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

Figure 5: Pensioner initiated review activity 2009–10 to 2013–14

Pensioner initiated review activity 2009-10 to 2013-14, shown as number of cases: intake, disposal and outstanding

Outcomes of pensioner initiated reviews

In 2013–14, the processing of PIRs resulted in pension increases for 28,086 clients (average fortnightly increase of $45.54 per client), and a pension decrease for 37,450 clients (average fortnightly decrease of $29.60 per client). A further 35,268 clients notified the Department of changes to their personal and financial circumstances, which 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

The time taken to process PIRs in 2013–14 was 21 days on average, compared to 22 days in 2012–13. The focus on finalising older outstanding cases impacted on timeliness; however, the age of outstanding cases is now 22 days – its lowest level in the past two years.

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

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

Figure 6: Average processing time for pensioner initiated reviews 2009–10 to 2013–14

Average processing time for pensioner initiated reviews 2009-10 to 2013-14, shown as number of days

Price

The cost per income support beneficiary in 2013–14 was $253, compared with $213 in 2012–13.

Quality

The critical error rate of 2.6 per cent for income support processing in 2013–14 was well within the target of 5 per cent.

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