3.4.6.30 Financial Assessment of SpNP Claims

Summary

This topic explains the financial assessment of SpNP claims including:

  • person with higher income/assets,
  • assessment of income/assets, and
  • ownership of home property.

Assessment responsibility

The financial assessment of SpNP claims is handled by a specialised working group located in CIS in Hobart.

Person with higher income/assets

If a person has a level of income or substantial assets on which they can draw, they could still be in special need if necessary expenses cannot be met.

Example: A person with high medical expenses.

In this case, the person should be asked to supply details of all necessary living expenses, supported by documents if available. Living expenses consist of:

  • the cost of housing, as long as it does not exceed the requirements of a reasonable standard of living,
  • medical and health care costs,
  • personal expenses (see example), and
  • any other expenses that are considered necessary to maintaining a basic standard of living.

Example: Food and clothing.

Assessment of income

The usual definition of income for pension purposes applies to SpNP. All sources of income are considered, including the receipt of any benefit from the country in which the person lives.

Deemed income from property is NOT included in the assessment of income, although any actual income from property IS included.

Examples: Rent and interest would be actual income from property.

Assessment of assets

If it is reasonable in all the circumstances, a person is expected to use substantial assets, including their principal residence, to provide their basic standard of living. If a person owns a modest dwelling, it would NOT be reasonable to expect them to sell the home or let part of it before accepting that they were in special need.

If a person has assets that are likely to be reduced in the short term because of living expenses, these assets need NOT be taken into account in determining whether they are in special need.

Ownership of home property

If the person owns their own home, the delegate should consider the following issues when assessing the person's need for financial assistance:

  • What is the present value of the home property?
  • When was it purchased?
  • What was the purchase price?
  • Where were the purchase funds obtained from?
  • Who is responsible for the rates, local government charges and other expenses?
  • How many people live in the home?
  • Who are these people, and what is their relationship to the person?
  • What payment do these people make towards the household expenses?
  • Is there any land owned separately to the house? If so, what is its area, present value and details if any crops or livestock are grown?
  • If crops or livestock are grown on a commercial basis, what is the income and expenses associated with this?
Last reviewed: 13 May 2013