8.4.2.20 Hardship Advance Payment

Summary

This topic contains information on:

• the definition of a hardship advance payment,
• when a hardship advance payment can be made,
• the amount of a hardship advance payment,
• how a hardship advance payment is made,
• how a hardship advance payment is recovered, and
• hardship advance payment for released prisoners.

Definition of hardship advance payment

A hardship advance payment is an amount of a claimant's first instalment of social security pension or benefit (section 23(1)-'social security benefit', section 23(1)-'social security pension') that is paid at grant, or the first instalment immediately following resumption of payment, to assist people in severe financial hardship including on release from prison.

A hardship advance payment cannot generally be paid when a grant is backdated. This is because an advance can only be paid if the person will be in hardship if required to wait until the end of the first instalment period. When a grant is backdated, the first instalment period will already have passed. In these circumstances:

• the claimant will generally have access to arrears, and
• an urgent payment may be made.

Advances can be paid following resumption of payment when the payment has been cancelled or suspended because:

• the delegate was satisfied that the claimant was not qualified or the payment was not payable,
• the claimant or their partner (1.1.P.70) failed to respond to a notice requiring them to give Centrelink a statement or provide information, or
• the claimant failed to take action to obtain a CFP.

Act reference: SS(Admin)Act section 51 Advance in case of severe financial hardship, section 85 Resumption of payment after cancellation or suspension, section 192 General power to obtain information

SSAct section 23(1)-'social security benefit', section 23(1)-'social security pension'

Policy reference: SS Guide 5.4.1.10 Qualification for Certain Benefits & PPS Advance Payments, 8.4.2.10 Urgent Payments

When a hardship advance payment can be made

A claimant must be in severe financial hardship to receive a hardship advance.

A claimant is considered to be in severe financial hardship if their liquid assets are less than one fortnight's payment at the maximum rate, including RA and PhA.

For a claimant who is a member of a couple (1.1.M.120):

• the liquid assets of both members of the couple must be LESS than twice the claimant's maximum fortnightly rate including RA and PhA,
• if the couple are on different rates, the higher rate should be applied to both members of the couple in determining whether each meets the hardship test, and
• a claimant who is claiming YA who is not independent and is a member of a couple but not yet a 'member of a YA couple' under SSAct section 1067C should be assessed for hardship in their own right without regard for their partner's liquid assets.

Liquid assets are defined differently for different purposes in the SSAct and are undefined in relation to some payments. There is no statutory definition of the term for the purpose of considering whether a hardship advance can be made. For this purpose, liquid assets should be taken to include:

• the person's cash, and
• any amount deposited with, or lent to, a bank or other financial institution by the person which is accessible before the date of the first instalment, and
• any other readily realisable assets of the person.

In the case of dependent YA claimants the parent's circumstances should be taken into account in considering whether there is financial hardship. If parents are willing to provide support until the next payday there should be no need for an advance.

If a claimant requests an advance of an instalment after the first instalment, an urgent payment may be made but an advance is not possible under the legislation.

Act reference: SS(Admin)Act section 51(1) Advance in case of severe financial hardship

Policy reference: SS Guide 8.4.2.10 Urgent Payments

Amount of a hardship advance payment

There is no legal restriction on the number of hardship advance payments that can be made before the first instalment. However, the total amount advanced should not exceed the total payable in the first instalment.

The SS(Admin)Act allows hardship advance payments of up to 14 days. The delegate should advance NO more than 7 days or the number of days payable in the first claimant's first instalment, whichever is less. This will protect the claimant against going for too long a period without financial assistance. In exceptional circumstances, the delegate may advance more than 7 days BUT NOT more than the number of days payable in the claimant's first instalment.

Example: Exceptional circumstances will exist if a refusal to advance a greater amount will have a clear adverse effect on the claimant's wellbeing, such as preventing payment of up front course fees by potential students.

The minimum amount of a hardship advance is one day's payment.

Example: On 4 May 2000 you have an appointment with Miroslav to discuss his claim for CA. Miroslav is in desperate need of money and wants the whole of his first payment advanced because his home has been broken into. Nothing has been stolen but the person he is caring for would like to get away for a few days and they need the money to pay for accommodation. Miroslav is only able to receive an advance of 7 days of his first instalment, as his circumstances are not exceptional to warrant paying him more than the 7 days.

Act reference: SS(Admin)Act section 51(4) Advance in case of severe financial hardship

How a hardship advance payment is made

Hardship advance payments are generally made in the following way:

• direct credit,
• EBT card, or
• manual cheque.

How a hardship advance payment is recovered

A hardship advance payment is generally recovered by not paying up to 14 days from the claimant's first instalment. The payment may also be recovered as a proportion from each of the first and second instalments if necessary to minimise financial hardship for the claimant. It is not necessary to raise a debt for amounts that can be recovered from the first and second instalment in this way.

Example: This can occur because the amount payable in those instalments has been substantially reduced as a result of casual earnings or other income.

Any amount that cannot be recovered from the first 2 instalments should be raised as a debt on Debt Management Information System (DMIS).

Note: When a hardship advance is being recovered from an instalment, other withholdings and deductions will be automatically suspended from that instalment.

Act reference: SS(Admin)Act section 51(5) Advance in case of severe financial hardship

Hardship advance payments for released prisoners

People being released from prison or psychiatric confinement may qualify for a hardship advance under the same conditions as other claimants (in addition to CrP).

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Last reviewed: 11 August 2011