Lump sum advance

Last updated: 
1 July 2020

This page explains what a lump sum advance of pension is, who is eligible for it, how much can be paid and how the repayments are worked out.

What is a lump sum advance?

If you are receiving a pension from DVA and you require additional funds for any purpose you might be able to get some of your pension paid in advance.

A lump sum advance may be spent for any purpose. For example, it could help you with unplanned expenses such as car repairs, household maintenance or emergency replacement of your refrigerator or washing machine. Depending on personal circumstances, such as your pension rate and previous advances not yet repaid, you can get up to 3 weeks of the maximum rate of service pension paid in advance to help you meet these sorts of expenses.

The advance payment is paid as a single lump sum, to be repaid over the following 13 fortnights with no interest.

Who is eligible for a lump sum advance?

You are eligible for a lump sum advance if you are being paid one of the following payments:

  • age service pension
  • invalidity service pension
  • partner service pension
  • income support supplement
  • war widow’s or widower’s pension
  • disability pension
  • a Centrelink age pension paid by DVA

You are not entitled to an advance of pension from DVA if the only payment you receive from DVA is any of the following:

  • a benefit under the Veterans’ Children Education Scheme (VCES)
  • a Pension Loan Scheme payment
  • Veteran Payment
  • Defence Force Income Support Allowance (DFISA)

If you receive Defence Force Income Support Allowance (DFISA) only from DVA you should contact Centrelink to enquire whether you are eligible to apply for a lump sum advance of your Centrelink payment.

What are the eligibility criteria?

To be eligible for a lump sum advance you have to be:

  • entitled to be paid one of the qualifying payments (mentioned above); and
  • in receipt of a pension from DVA or Centrelink continually during the three months before your application for an advance; and
  • able to afford to repay the advance without suffering severe financial hardship; and
  • an Australian resident living in Australia and in Australia on the day on which the application is lodged.

You are not eligible for a lump sum advance if:

  • you have not yet repaid a previous advance that was made more than 12 months ago; or
  • you owe a debt to the Commonwealth government because you have been overpaid pension by DVA or Centrelink; or
  • the advance available to you is less than the minimum advance allowed.

How much can I be paid in advance?

The amount of your pension that you can be paid in advance depends on:

  • the specified maximum and minimum advance amounts (explained below); and
  • the rate of fortnightly pension you receive; and
  • any previous advances you have received in the last 13 fortnights; and
  • any previous advances that you have not yet repaid.

If you wish to know how much pension you can currently be paid in advance you should contact your local DVA office.

You can apply for an advance of any amount up to the maximum lump sum advance available to you, based on your personal circumstances. You cannot be paid an advance of less than the minimum advance that applies to you.

What are the maximum and minimum advance amounts?

The maximum advance payable is 3 weeks of the maximum rate of service pension, not including the minimum pension supplement amount.

How is the maximum advance amount worked out?

Mr Smith receives the maximum single rate of service pension of $860.60 per fortnight, plus the full pension supplement payment (minus energy supplement) of $69.60 per fortnight. The minimum pension supplement amount of $37.40 cannot be advanced, so only $32.20 of the pension supplement is included. Mr Smith’s maximum advance is three weeks (1.5 fortnightly pension payments) at $892.80 =$1,339.20.

Whether you can be paid an advance of the maximum amount will depend on your own rate of pension and any previous advances you have received.

The current maximum advance payable is:

Singles $1,339.20
Members of a couple (each) $1,009.50
Members of an illness separated couple (each) $1,339.20

The minimum advance payable is one week of the maximum rate of service pension, not including the minimum pension supplement amount or the energy supplement.

You cannot be paid an advance if the advance available to you, based on your pension rate and your previous advances, is less than the minimum advance amount that applies to you. This may occur where your pension rate is low or you have received previous advances.

The current minimum advance payable is:

Singles $446.40
Members of a couple (each) $336.50
Members of an illness separated couple (each) $446.40

How is my advance amount calculated?

Your advance amount must fall between the available maximum amount, and the required minimum amount, as outlined above.

Your available advance amount also depends on the type of pension you are receiving, and your current fortnightly rate of this pension payment. The calculation takes into account how much pension you will receive over a longer time period.

Any existing advance amounts you have received within the past six months, and any advance amounts older than this which have not been repaid, are then deducted. This gives you the available advance amount.

Example 1: For disability pension and war widow/widower’s pension:

Jim is a single veteran who receives disability pension at 20% of the General Rate ($109.40 per fortnight). Jim has not received any advances within the last 6 months, but has $400 to be repaid from a previous advance.

Minimum Amount  $446.40
Maximum Amount $1,339.20
Jim's maximum Amount 13 X $109.40 = $1,422.20
The available advance amount for Jim $1,422.20 - $400 = $1,022.20

 

 

 

 

Example 2: For service pension, age pension or income support supplement:

Bob and his wife Mary each receive a fortnightly service pension of $346.40. For advance purposes, the minimum pension supplement of $28.20 is excluded, so when Mary asked about an advance, her fortnightly pension amount is based on $318.20. Mary has not received any advances within the last 6 months, and has no advance amounts older than this left unpaid.

Minimum Amount $336.50
Maximum Amount $1,009.50
Mary's Maximum Amount 1.95 X $318.20 = $620.49

 

 

 

If you receive both types of pension, you will be entitled to the larger of the advances worked out as above.

If you would like to know the lump sum advance amount that you may be able to access, please contact your local DVA office.

How often can I get an advance?

There is no specific limit to the number of advances you can receive, subject to the rules set out above.

However, the amount of pension advance that is available to you at any time is reduced by:

  • the total amount of any advance made to you in the last 13 fortnights; and
  • the amount that has not yet been repaid of any advance made to you more than 13 fortnights ago.

In practice, this means that you will often be prevented from receiving an advance during the 13 fortnights (or 6 months) since your last advance. The larger the advance you receive, the more likely it is that you will be prevented from receiving another advance during the same 13 fortnights. This applies even if you have repaid your previous advance more quickly than expected.

Example 4: How often can I get an advance?

Mr Smith applies for a lump sum advance of his pension and is paid an advance of $900 on 16 July 2020. For the next 13 fortnights the calculated pension advance amount available to Mr Smith is reduced by $900, making the advance available to him less than his minimum advance amount. Mr Smith therefore cannot receive another advance during this 13 fortnight period. Mr Smith again becomes eligible for an advance of pension on 14 January 2021.

Who decides whether I can afford the repayments?

Repaying a lump sum advance means you will have to get by on less than your normal rate of pension until it is paid back. This is because the repayments are taken out of your pension before it is paid to you each fortnight.

Before you apply for a lump sum advance you will have to decide whether you can afford the repayments. DVA can give you a Form D0557 Lump Sum Advance Payments - Income Expenses Calculator to help you add up your living expenses and work out your repayments. Forms are available from your nearest DVA office or through the DVA website at our forms page.

DVA officers who deal with your application may also need to be satisfied that you can afford the repayments without causing yourself financial hardship. We may ask you for more information about your circumstances if we are not sure.

How much are the repayments?

The repayments are worked out by dividing the full amount of your advance by 13. The repayments are worked out in this way so that the advance will be paid back over 13 fortnights. Your pension payment will be reduced each fortnight by the amount of the repayment for 13 pays. For example a $500 advance would be repaid in 12 instalments of $38.47 each, and a final instalment of $38.36.

If you have an existing advance that has not been repaid when you receive a new advance, the advances will be combined and you will have to pay back the total outstanding advances over the next 13 fortnights.

You will not have to pay any interest on your lump sum advance.

Can I pay off an advance more quickly so that I can be paid another advance straight away?

If you can afford to, you can pay the advance back more quickly, either by lump sum payments or by asking for more to be taken out of your pension each fortnight.

However, this will not necessarily mean that you will be able to access another advance straight away. The previously advanced amount is still deducted from your maximum available advance amount, for the 13 fortnights following the advance. This means that the new lump sum advance that could be paid to you would be likely to be less than the minimum advance available to you, based on your circumstances.

What if I get a lump sum advance and have trouble with the repayments?

If you get an advance and the repayments mean you have trouble getting by, you should contact DVA straight away. We may be able to reduce your repayments.

You would have to show that you have had an unexpected and exceptional change in your circumstances and would suffer severe financial hardship if your repayments were not reduced.

Do I have to tell the Department why I want an advance?

No. You do not have to tell us why you want a lump sum advance.

How do I apply for a lump sum advance?

You can request a lump sum advance via MyAccount, via telephone on 1800 555 254 or in person at a Veterans' Access Network (VAN) location. Alternatively you can complete a Form D0556 Application for Lump Sum Advance Payment of a Pension

When will the advance be paid?

If the application is granted, the advance payment is paid as a lump sum, either:

  • on the next day that the pension is payable; or
  • on an earlier day (usually two working days after your application is approved).

If you need the money urgently you should tell us when you apply.

Unless you request otherwise, the lump sum advance will be paid into the same account as your pension payments.