When changes to your aged pension come into effect

Last updated: 
21 January 2020

This page provides further information on the date of effect for pension reductions and cancellations. It should be read in conjunction with page Date of effect for pension variations - age pensioners.

This information is for age pensioners paid by DVA. There is a separate page for service pensioners and war widow/ers who receive income support supplement, Date of effect for pension variations: reductions and cancellations.

Pensions are calculated on a daily basis

The age pension you receive every fortnight is calculated on a daily basis. For example, a change in your income or asset value mid-way through a pension fortnight may change your pension from that day. This means that the amount of pension paid will reflect your true entitlement. To get the most out of these arrangements, you must tell us:

  • about changes in your circumstances that affect your pension, within 14 days of the change (28 days if you live overseas); and
  • the date of the change.

If you become aware that you have received or are to receive a compensation payment, you must tell us within 7 days (28 days if you live overseas).

An explanation of how the arrangements affect age pension reductions and cancellations is below.

Reductions and Cancellations: change notified within 14 days

The rules that apply to age pensions are contained in the social security law and we are obliged to apply them. If a change you tell us about results in a reduction or cancellation in your pension and you let us know about the change within 14 days of it happening (28 days if you live overseas), the reduction/cancellation applies from one of three dates, depending on when we process the change.

The table below summarises when the reduction/cancellation will apply:

IF the reduction or cancellation is processed in THEN pension is reduced or cancelled from the day
the ‘pension period’ in which the change occurs of the change (see Diagram 1)
the ‘pension period’ immediately following the pension period in which the change occurs after the end of the ‘pension period’ in which the change occurs (see Diagram 2)
a later ‘pension period’ after the end of the notification period (i.e. the 15th or 29th day after the change, as applicable) (see Diagram 3)

A change might be processed in a pension period after the change occurs if there is a delay by DVA in processing the change. See over the page for diagrams illustrating each of the above three points.

What is a pension period?

A 14 day period called a ‘pension period’ relates to the fortnightly payment. A ‘pension period’ starts on a Tuesday and ends a fortnight later on the Monday before pension payday.

All changes that have an effective date within the ‘pension period’, affect the amount paid on the pension payday. Here is a diagram to illustrate.

Sun Mon Tue Wed Thu Fri Sat
    Day 1 Day 2 Day 3 Day 4 Day 5
Day 6 Day 7 Day 8 Day 9 Day 10 Day 11 Day 12
Day 13 Day 14     PAY DAY    

KEY

pension period
PAY DAY

When does a reduction or a cancellation apply: change notified within 14 days (7 or 28 days if applicable)?

Diagram 1

This diagram shows when a reduction or cancellation applies, if the change is processed in the same ‘pension period’ in which it occurs.

IF the reduction or cancellation is processed in THEN pension is reduced or cancelled from the day
the ‘pension period’ in which the change occurs of the change

 

Sun Mon Tue Wed Thu Fri Sat
    1 2 Change occurs here.
Reduction or cancellation
applies here
3 4 5
6 7 8 9 10 11 12
13 14 DVA processes during
this ‘pension period’
15 16 17 PAYDAY
Reduction or cancellation
reflected on this payday
18 19

Diagram 2

This diagram shows when a reduction or cancellation applies, if the change is processed in the ‘pension period’ after the one in which the change occurs.

IF the reduction or cancellation is processed in THEN pension is reduced or cancelled from the day
the ‘pension period’ immediately following the pension period in which the change occurs after the end of the ‘pension period’ in which the change occurs

 

Sun Mon Tue Wed Thu Fri Sat
    1 Change occurs in
this ‘pension period’
2 3 4 5
6 7 8 9 10 11 12
13 14 1 Reduction or cancellation
applies here
2 3 4 5
6 7 8 9 10 11 12
13 14 DVA processes during
this ‘pension period’
    PAYDAY
Reduction or cancellation
reflected on this payday
   

Diagram 3

This diagram shows when a reduction or cancellation applies, if the change is processed after the ‘pension period’ that occurs after the ‘pension period’ in which the change occurs (using a 14 day notification period example).

IF the reduction or cancellation is processed in THEN pension is reduced or cancelled from the day
a later ‘pension period’ after the end of the notification period (i.e. the 15th or 29th day after the change, as applicable)

 

Sun Mon Tue Wed Thu Fri Sat
    1 Change occurs here 2 3 4 5
6 7 8 9 10 11 12
13 14 1 2 3 Reduction or cancellation
applies here
4 5
6 7 8 9 10 11 12
13 14 1 2 3 4 5
6 7 8 9 10 11 12
13 14 DVA processes during
this ‘pension period’
(or later)
    PAYDAY
Reduction or cancellation reflected
on this payday (or later)
   

Reductions and Cancellations: change notified outside 14 days (7 or 28 days if applicable)

If a change you tell us about results in a reduction or cancellation in your pension, and you let us know about the change more than 14 days after it happens (7 or 28 days if applicable), the reduction/cancellation applies from the date of the change. This is shown in the diagram below, using 14 days.

Sun Mon Tue Wed Thu Fri Sat
  1 Change occurs here.
Reduction or cancellation
applies here
2 3 4 5 6
7 8 9 10 11 12 13
14 15 You let us know on
or after here
         

Overpayments of pension

If a change you tell us about results in a reduction or cancellation to your pension from the day of the change (because we were told about the change more than 14 days after it happened (7 or 28 days if applicable), the reduction/cancellation will normally result in an overpayment of pension. In that case, we would recalculate your pension and let you know the best way to repay the overpaid amount.

It is possible that even if you tell us about a change within 14 days of it happening (7 or 28 days if applicable), we may not be able to recalculate your pension in time for your next payday. In this case we would have to recover any money that you have received over and above what you were entitled to.

Of course you would never have to repay money that you are lawfully entitled to. We will always do our best to ensure your changes are processed as quickly as possible, to avoid overpayments accumulating. However, it is possible to incur an overpayment, and we believe you should be fully informed about the possibility of this happening.

Obligations

Do tell us about changes to your circumstances within 14 days (7 days if you receive a compensation payment, 28 days if you live overseas).

Do tell us the date the change occurred.

Don’t tell us about changes that won’t affect your pension.