188.8.131.52 Phasing Out RA Savings Provisions
Phasing out savings provisions - March 1996 changes
The strategy to phase out savings provisions, introduced from March 1996, means that the saved rate of RA will reduce by the amount of increases in other components of the payment due to:
- any cost of living increases, OR
- ad hoc increases announced by the Government.
This will continue until the saved rate of RA no longer provides any advantage to the recipient, who will then be paid under current rules and rates.
Explanation: Following Budget announcements, since March 1996, all 3 RA savings provisions have been phased out more quickly. This will speed up the process of simplifying administration of RA and improving equity, as savings provisions allow some people to receive more assistance than others in similar circumstances.
Other reassessments, for any reason, will not reduce the saved rate of RA, other than under the original principles of a particular savings provision.
Example: A reduction in income, the birth of a child, change in marital status, or indexation of the income free area may all lead to increased social security entitlement without reducing RA.
Changes of this kind generally happen throughout the year and are NOT included in the scope of this strategy, which affects most recipients in March, September and January of each year.
Phasing out savings provisions - 1 July 2000 FTB introduction
If the recipient, or recipient's partner, begins to receive FTB Part A at greater than the base FTB child rate, and this rate includes RA, the savings provisions no longer apply. The entitlement to RA is then assessed according to the FTB legislation.
The primary payment systems are designed to make the above adjustments automatically as part of the cost of living adjustments. A new field called the 'accumulated reduction amount' shows the amount by which a recipient's RA has been reduced through this process. This field will generally need updating manually only when granting RA under a savings provision.
Act reference: SSAct Schedule 1A clause 27(3A) RA-boarders and lodgers (changes introduced on 13 June 1989), Schedule 1A clause 28(4) Rent assistance-retirement village residents (changes introduced on 13 June 1989), Schedule 1A clause 63(3A) RA (changes introduced on 20 March 1993)