3.4.7.80 Claiming the PBS Bonus

Summary

The bonus can be claimed only after the member completes the first full bonus year. The bonus is NOT payable without a claim. The claim for a pension bonus must be lodged together with the claim for Age.

Death of a PBS member - PBS claims

If a member claims PBS before their death and the claim has not been determined or paid before their death, payment is made to the estate of the person.

If a PBS member dies before claiming PBS, no PBS is payable. However, the surviving partner (if any) of the PBS member who dies before making their claim for PBS may be qualified for PBBP.

Act reference: SS(Admin)Act section 59 Payment of pension bonus or pension bonus bereavement payment after death

Policy reference: SS Guide 3.4.11 PBBP - Qualification & Payability

When MUST the bonus be claimed?

A member of the scheme MUST claim the pension bonus if they:

  • lodge a claim for Age, OR
  • fail to accrue a bonus period - that is, they fail the work test, AND
  • are NOT a non-accruing member of the scheme.

A member who accrues some bonus periods and then fails to accrue a full-year bonus period without claiming, can never be paid a pension bonus.

Explanation: Bonus periods must be consecutive, so a member of the scheme must claim their bonus as soon as they fail to accrue a full-year bonus period. This may not be the case if they have a partner who is continuing to accrue a bonus.

A person who claims Age and PBS and whose claim for Age is rejected cannot receive a bonus EVER unless Age becomes payable within 13 weeks of failing the PBS work test or within 13 weeks of the end of a non-accruing period.

Act reference: SS(Admin)Act section 17 Special requirements regarding claims for pension bonus, section 22 Last bonus period a full-year period, section 23 Last bonus period a part-year period, section 25 Claim where membership has become non-accruing

Failure to accrue a bonus period

If a member fails to accrue a full-year bonus period then they CANNOT be paid a bonus and should claim Age.

Act reference: SSAct section 92C Qualification for pension bonus

Policy reference: SS Guide 3.4.7.90 PBS - How to Determine a Part Year Bonus Period

Failure to claim PBS when claiming age pension

The Secretary (or delegate) has the power to accept a PBS claim lodged AFTER an age pension claim in very limited circumstances. The Secretary (or delegate) may determine that a claim for pension bonus from a registered member, which was not lodged at the same time as the claim for age pension, will be taken to have been made at the same time as the claim for age pension in the following circumstances:

  • if a person makes a claim for age pension, AND
  • the Secretary (or his delegate) fails to recognise the person's existing membership in the PBS, AND
  • the person receives age pension without regard to any pension bonus that may have been payable to the person, AND
  • the person lodges a PBS claim within 2 years of the age pension claim.

Example: John registers for PBS on 1 July 2004 and works until 30 June 2008. John makes a claim for age pension on 1 July 2008 and mistakenly advises on the form that he is not a member of the PBS. Due to administrative error, John's membership of the scheme is not detected when indexing the claim for age pension and he is not invited to make a claim for PBS. Age pension commences from 1 July 2008. Eight months later, John realises he has not received his expected bonus and it becomes clear that he made a mistake on his age pension claim form. He lodges a PBS claim. Because administrative error played a part, the claim for PBS can be accepted and it is deemed to have been lodged with his age pension claim on 1 July 2008.

Act reference: SS(Admin)Act section 17 Special requirements regarding claims for pension bonus

Social Security (Administration) (Delayed Lodgement of Claims for Pension Bonus) Guidelines 2007

Time limits on claiming the bonus

The following table explains the time limits that apply to claiming the pension bonus:

If the member has accrued at least one full-year bonus period and… Then they…

fails to accrue a further full-year bonus period, AND

is NOT a non-accruing member of the scheme,

must claim the pension bonus and Age within 13 weeks of failing to accrue the further full-year bonus period to qualify to receive a bonus.

If the pension is NOT payable to the person within this 13 week period then NO bonus is payable to the member - EVER.

fails to accrue a further bonus period, AND

immediately becomes a non-accruing member of the scheme,

have until 13 weeks after they cease being a non-accruing member of the scheme, to lodge their claim for the bonus.

Example: A member who is receiving CP. This member is a non-accruing member of the scheme. They can claim Age and the bonus when they cease receiving CP.

is claiming a part-year bonus period AND claims within 13 weeks from the end of that part-year period,

may be paid for the entire bonus period including the part-year period.

Example: A member works for 3 years and 18 weeks (126 days) and retires, having worked 20 hours each week. They must claim within 13 weeks of ceasing work (by the end of the 31st week of the 4th year) to be able to have the 18 week part-year period included in the bonus calculation.

is a partnered member of the scheme who has to claim the bonus as a result of failing to accrue a bonus period,

have their 13 week claim period extended if their partner is an accruing or post-75 member of the scheme. The claim period for both partners becomes the claim period for the working partner.

Explanation: This is designed to prevent a member's bonus being reduced because their partner's income affects their pension and therefore the amount of bonus that can be paid to them.

is the non-working partner in a couple, AND

their working partner dies,

become a non-accruing member for 13 weeks from the date of their partner's death. They must then lodge their claim for age pension and pension bonus within 13 weeks of the end of this non-accruing period.

Exception:

  • the surviving partner may commence work, meet the work test and become an accruing member of the scheme.
  • the surviving partner is otherwise a non-accruing member from the end of the 13 week non-accruing period.

In either case, the timeframe in which a person is required to lodge their claim is as otherwise set out in this table.

Act reference: SSAct section 92Q Non-accruing membership - Secretary's discretion, section 92N Accruing membership, section 92P Non-accruing membership - preclusion periods

SS(Admin)Act section 22 Last bonus period a full-year period, section 17 Special requirements regarding claims for pension bonus, section 23 Last bonus period a part-year period, section 24 Claim by exempt partnered person, section 25 Claim where membership has become non-accruing

Policy reference: SS Guide 3.4.7.90 PBS - How to Determine a Part Year Bonus Period

Late claims

The following table explains the effect of claiming a bonus more than 13 weeks after the end of a bonus period:

If a member claims their bonus… Then…
more than 13 weeks after failing the work test for a part-year bonus period, acceptance of the claim is at the Secretary's discretion. If the Secretary accepts the claim,

they CANNOT qualify for payment of the part-year bonus period, but they can qualify for the full-year bonus period/s.

Example: A member works for 4 years, 4 weeks and 3 days but does not claim the bonus until 15 weeks after failing the work test. They can only be paid a bonus for 4 years, NOT the part-year period.

They are not paid for the 4 weeks and 3 days.

more than 13 weeks following the end of the final full-year period (and the claim is lodged before 01/01/2008),

NO bonus is payable.

Example: A member works for 5 full bonus year periods but claims the bonus 15 weeks after they fail the work test.

more than 13 weeks following the end of the final full-year period (and the claim is lodged on or after 01/01/2008), acceptance of the claim is at the Secretary's discretion. If the Secretary accepts the claim, the member qualifies for the full-year bonus period/s.

Discretion to accept late claims - PBS claims lodged prior to 1 January 2008

The Secretary has the discretion to allow a longer period in which to claim a bonus if the person's last bonus period is a part-year period.

Exceptions: The lodgement period of 13 weeks and the Secretary's discretion to allow a longer period to claim if the person's last bonus period is a part-year period does not apply if the person:

  • is an exempt partnered person, or
  • becomes non-accruing immediately after the end of their last bonus period, or
  • is a post-75 member and has a post-75 work period.

Act reference: SS(Admin)Act section 23 Last bonus period a part-year period

Policy reference: SS Guide 3.4.7.60 PBS Work Test, 3.4.7.90 PBS - How to Determine a Part Year Bonus Period

Discretion to accept late claims - PBS claims lodged on or after 1 January 2008

The Secretary has discretion to accept any late PBS claim lodged on or after 1 January 2008 (including claims from exempt partnered persons, those non-accruing immediately after the end of the last bonus period and post-75 members) providing there was a special reason for late lodgement of the claim. The event that caused the late lodgement of the claim may have occurred prior to 1 January 2008.

Act reference: SS(Admin)Act section 21 General rule

Reasons to accept late claims

The intention of the late claims provisions is to allow acceptance of late claims from members who have not been able to lodge a claim within the time limits due to special circumstances, and not for members who deliberately claim late in order to get a higher bonus. The member should be asked for their reasons for making a late claim for pension bonus and evidence should be provided, where applicable/appropriate.

Examples may include cases where a member:

  • has poor numeracy or literacy skills,
  • was ill,
  • was located in a remote area,
  • performed irregular work that made it difficult for the member to determine the lodgement period,
  • was helping a close family member suffering from a serious illness,
  • has experienced the death of a close family member,
  • had experienced a major disruption to their living arrangements (such as their home being fully or partially destroyed or the member or member's partner moved into a nursing home),
  • was unaware that post 20 September 2009 they could no longer be a non-accruing member whilst their younger partner was working and the working partner was affected by the closure of the scheme to new entrants (a time limit of approximately 12 months would apply to these cases).

The list above is not a full list of acceptable reasons to accept a late claim. Each case should be judged on its merits.

Before accepting a late claim, the delegate of the Secretary should consider how late the claim is, and whether this is reasonable when considering the event/s that caused the member to claim late. For example, if a person was ill for 4 months after ceasing work, it would not be reasonable for the claim to be 12 months late (unless there were other special circumstances that contributed to the delay).

Verification of reasons for a late claim

In the case where claims are lodged within a few weeks of the normal claim period, evidence of the reason for the delay would not normally be required. In order to make a decision about whether a very late claim should be accepted, it is acceptable to ask for evidence of the reason for the delay (provided it is likely that the member has evidence or could obtain evidence without excessive cost or delay).

Examples: If a claim was lodged late due to the member's illness, it would be reasonable to ask for medical evidence. If someone lodged their claim late due to a fire in the home, then insurance documents, bills from builders or police reports may be available. If a person lodged late because they were attending an overseas funeral, it would be reasonable to expect that the person provide a funeral notice and/or travel documents.

Act reference: SS(Admin)Act section 21 General rule, section 192 General power to obtain information

Access to DFISA bonus

Where a person's pension bonus or PBBP is reduced (including to nil) because ADP reduces their rate of Age, they will automatically be entitled to a DFISA bonus or DFISA bonus bereavement payment from DVA. To access the DFISA bonus a person must lodge a claim for the pension bonus or PBBP. There is no separate DFISA bonus claim.

It is possible for a person to whom no DFISA is payable to receive a DFISA bonus or DFISA bonus bereavement payment. This may occur where the person's rate of DFISA is nil because the reduction in their notional RA is equal to the increase in their notional rate of pension.

Because RA is not included in the pension bonus calculation, the person could be entitled to a DFISA bonus.

Act reference: SSAct section 92C Qualification for pension bonus, section 93WA Qualification for pension bonus bereavement payment

Veterans' Entitlements Act 1986 Part VIIAB Division 3-'DFISA bonus'

Policy reference: SS Guide 4.3.5.72 DFISA Bonus & DFISA Bonus Bereavement Payment & the PBS

Last reviewed: 1 July 2014