The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

3.4.11.20 Payability of PBBP

Summary

PBBP is based on the amount of pension bonus accrued by the deceased. It aims to reflect the amount of pension bonus payment that might have been payable had the member claimed shortly before their death and at the most appropriate time (i.e. normally people would cease work before claiming a pension bonus).

The amount is calculated by:

  • working out the amount of pension bonus that would have been payable to the estate of the person had they claimed Age and pension bonus before their death, using the provisions for PBS in SSAct section 93D, and
  • disregarding any 'PBBP employment income' when calculating the annual pension rate in SSAct section 93H.

If the PBS member was serving a compensation preclusion period at the time of his/her death, the PBBP is calculated using the amount of Age the deceased would have received had he/she not been serving a preclusion period at the time.

Since PBBP is not a CAP under SSAct section 17(1), and receipt of PBBP is not reliant on receipt of Age, a preclusion period would not apply for the PBBP claimant.

Act reference: SSAct section 93WB Amount of PBBP, section 93WC Definition of PBBP employment income, section 93D How to calculate the amount of pension bonus, section 93H Annual pension rate, section 17 Compensation recovery definitions

SS(Admin)Act section 59 Payment of a pension bonus or PBBP after death

Policy reference: SS Guide 3.4.7.100 Amount of PBS bonus, 3.4.11.10 Qualification for PBBP

PBBP employment income

PBBP employment income is disregarded when calculating the amount of PBBP. The employment income of the person claiming PBBP AND their deceased partner is disregarded.

The employment income that is disregarded must be either from 'gainful work' (1.1.G.20) that has been performed for the purposes of accruing a pension bonus, or work that could be considered to meet the definition of gainful work but has not been used towards accruing a bonus.

Example: If the deceased worked for a supermarket and this work was used to meet the PBS work test and the surviving partner received income from a business in exchange for secretarial work, the business income would be exempt from the means test for PBBP. This is because although the secretarial work is not used to meet the PBS work test, it still meets the definition of gainful work. However, if the business income was separate from/unrelated to the secretarial work, then it would not be considered PBBP employment income and would not be exempt from the means test for PBBP.

Types of PBBP employment income include:

  • salary, wages, commissions, and employment related fringe benefits (including salary sacrifice amounts, provisions of housing or car, etc. as part of a salary package)
  • leave payments paid by the employer (e.g. sick leave, recreation leave, carer's leave, long service leave, etc.)
  • payments from the employer in relation to the termination of their employment (e.g. redundancy payment)
  • periodic compensation payments, and
  • business income.

Income from work that does not meet the definition of gainful work, such as the management of family investments, is NOT disregarded from the means test in calculating PBBP.

The Secretary may specify, by way of a legislative instrument, other kinds of income that meet the definition of PBBP employment income.

Act reference: SSAct section 93WC Definition of PBBP employment income, section 93WB Amount of PBBP, section 92X Gainful work-basic rule, section 92Y Secretary's discretion to treat activity as gainful work

Social Security (Pension Bonus Bereavement Payment - Disregarded Income) Specification 2018

Policy reference: SS Guide 1.1.G.20 Gainful work (PBS)

Death of a PBBP claimant

If a person claims PBBP and dies before the payment is determined or paid, the payment is made to the estate of the person.

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

No top ups for PBBP

There are no top ups payable for PBBP under any circumstances.

Act reference: SSAct section 93K Top up of pension bonus for increased rate of Age

SS(Admin)Act section 59 Payment of pension bonus or PBBP after death

DVA PBBP

DVA makes a similar payment, known as DVA PBBP.

Act reference: Veterans' Entitlements Act 1986 Part IIIAB Division 11A Pension bonus bereavement payment

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