Advance Payments for pensioners

About Advance Payments

Changes to the way Advance Payments are paid to pensioners were introduced on 1 July 2010 as part of the Secure and Sustainable Reform package. The changes provide greater flexibility in relation to the frequency and amounts of Advance Payments.

An Advance Payment is a lump sum paid from your future entitlement and is repaid from your fortnightly payments over a period of 13 fortnights (about 6 months) from the date the advance is granted.

The amount available to you is limited by the minimum and maximum amount. These amounts are dependent on your payment rate and will increase every March and September as the pension rate changes.

From 20 September 2011 to 19 March 2012 the minimum and maximum advance amounts for single pensioners are $358.30 and $1074.90. The minimum and maximum advance amounts for each member of a couple are $270.10 and $810.30.

The amounts that can be taken over six months are:

• one advance payment of the maximum amount
• one or two advance payments greater than the minimum amount, or
• three advance payments equal to the minimum amount.

The amount available at each application will depend on whether you have received previous advance payments, and the amount taken. You will only have access to 3 advances over a 13 fortnight period if you take the minimum amount each time. If you take an amount that is greater than the minimum, even by a few cents, you run the risk of not having the minimum amount available next time you apply.

If you take more than one Advance Payment in the 13 fortnight period, each is repaid in the order that they are taken. You could be repaying several advances at the same time resulting in a higher deduction from your fortnightly pension.

The minimum and maximum amounts will increase every 20 March and 20 September and could be higher when you apply for another Advance Payment.

Advance Payments are only available if you will not suffer financial hardship caused by the reduction in your fortnightly payment. Centrelink will only offer you an amount you can afford to repay over the next 13 fortnights.

Eligibility

The new rules only apply if you receive one of these pensions:

• Age Pension
• Carer Payment
• Disability Support Pension
• Widow B Pension
• Wife Pension

For more information about eligibility, view the Advance Payment eligibility page.

Payment rates

Under the new rules, customers are able to apply for an Advance Payment amount between the minimum and maximum amounts:

• the maximum Advance Payment amount - has been set at 3 weeks of the maximum basic pension relevant to your relationship status, plus that part of the Pension Supplement amount above the minimum. If you receive a part rate or under 21 rate of pension the maximum amount will also depend on the amount of pension you receive.
• the minimum Advance Payment - has been set at 1 week of the maximum basic pension relevant to your relationship status, plus that part of the Pension Supplement amount above the minimum.

Example 1

Disability Support Pension

You currently receive the maximum single rate of Disability Support Pension and you qualify for an Advance Payment. Your car registration and insurance renewal is due on 24 November. You normally have over $90 left each fortnight after you have paid your regular bills and living expenses. As you have not taken an Advance Payment in the last 13 fortnights you can apply for the maximum amount of Advance Payment for your circumstances, which is currently $1074.90.

Repayment

You are required to pay back Advance Payments over 13 fortnights, so in the case your repayments would be $82.70 per fortnight for the next 13 fortnights.

Next Advance

Because you took the maximum amount of Advance Payment you will not be able to receive another Advance Payment for 13 fortnights.

This is because each time you apply for an Advance Payment, Centrelink deducts, the total amount of any Advance Payments you’ve received in the past 12 months that are not fully repaid, plus the total of any Advance Payments paid to you in the last 6 months, from the maximum Advance Payment amount.

Example 2

Age Pension

You currently receive the maximum single rate of Age Pension and you qualify for an Advance Payment. You normally have over $90 left each fortnight after you have paid your regular bills and living expenses. As you have not taken an Advance Payment in the last 13 fortnights you can apply for the maximum amount of Advance Payment for your circumstances currently $1074.90*. However, you only require a small amount to assist you to spread the expenses of buying your grandchildren birthday and Christmas presents.

• Advance Payment 1: On 10 December you apply for the minimum Advance Payment amount - $358.30*. This means that $27.60 will be deducted from your next 13 pension payments. This will leave a further $716.60 that you can apply for over the next 13 fortnights.
• Advance Payment 2: On 3 January you decide to buy all your grandchildren presents for the year in the 'Post Christmas Sales', so you apply for another Advance Payment on 3 January. There is $716.60 available and you decide you can afford to repay an advance of the full amount. This means your fortnightly repayment will increase by $55.20, to $82.80 per fortnight.

Repayment

You are required to pay back the Advance Payment, so your fortnightly payment will be reduced by each of the following amounts:

• Advance Payment 1: $27.60 per fortnight for 13 fortnights from 9 December
• Advance Payment 2: An additional $55.20 per fortnight, making the total deduction $82.80 per fortnight from 3 January. This will continue until the first advance is repaid reducing the deduction to $55.20 until the second advance is repaid.

Next Advance

If you repay both Advance Payments at the standard rate you will next be eligible for an Advance Payment on or after 8 June, which is 13 fortnights from 9 December.

• The amount available to you will be reduced by the amount of the Advance Payment you took on 3 January ($716.60), as it was taken less than 13 fortnights ago.
• If you wait until 4 July, 13 fortnights after 3 January, the maximum amount of the Advance Payment will become available if you qualify.

This is because each time you apply for an Advance Payment, Centrelink deducts, the total amount of any Advance Payments you’ve received in the past 12 months that are not fully repaid, plus the total of any Advance Payments paid to you in the last 6 months, from the maximum Advance Payment amount.

Example 3

Carer Payment (partnered)

You currently receive Carer Payment at the partnered rate and you qualify for an Advance Payment. You received an Advance Payment of $300 on 23 March for your car registration which you are repaying at the rate of $23.10 per fortnight.

It is now 24 June and your fridge has broken. You need a deposit for a new one and apply for another Advance Payment. Because of the previous Advance Payment, the amount available to you is reduced by $300.

$810.30* minus $300 means $510.30 is available to you. The minimum Advance Payment amount is $263 however you decide you can afford to repay an advance of $400 which means your fortnightly deduction will increase by $30.80.

Repayment

You are required to pay back Advance Payments, so your fortnightly payment will be reduced by each of the following amounts:

• Advance Payment 1: $23.10 per fortnight for 13 fortnights from 23 March
• Advance Payment 2: An additional $30.80 per fortnight, making the total deduction $53.90 per fortnight from 24 June. This will continue until the first advance is repaid reducing the deduction to $30.80 until the second advance is repaid.

Next Advance

If you repay both Advance Payments at the standard rate you will be eligible for another on or after 21 September which is 13 fortnights from 23 March.

• The amount available to you will be reduced by the amount of the Advance Payment you took on 24 June, as it was taken less than 13 fortnights ago.
• If you wait until 23 December, 13 fortnights after 24 June, the maximum amount of the Advance Payment for your circumstances will become available (if you qualify).
• This is because each time you apply for an Advance Payment Centrelink deducts, the total amount of any Advance Payments you’ve received in the past 12 months that are not fully repaid, plus the total of any Advance Payments paid to you in the last 6 months, from the maximum Advance Payment amount.

* The amounts cited are based on the rate of pension as at 20 September 2011 - these rates change in September and March each year.

Paying the money back

Repayments are made over 13 fortnights by reducing your pension. Repayments will automatically start from the first pension after you get the Advance Payment. You can also make extra repayments in cash at your nearest Centrelink Customer Service Centre.

If the Centrelink payment you receive changes, repayments will continue from your new payment.

If you stop receiving a Centrelink payment, you will still need to repay the amount you owe.

If you have an Advance Payment that you have reduced the repayment amount for, Centrelink may not be able to grant you further Advances until the repayment amount has been returned to the standard amount.

Factsheet

For more information about Advance Payments, read the Advance Payments factsheet.

More information

• view the Advance Payment section
• call Centrelink on 13 2300