Commonwealth Consolidated Acts

SOCIAL SECURITY ACT 1991 - SECT 1066

             (1)  The rate of:

                     (b)  bereavement allowance; and

                     (c)  widow B pension;

is to be calculated in accordance with the Rate Calculator at the end of this section.

Note:          Module A of the Rate Calculator establishes the overall rate calculation process and the remaining Modules provide for the calculation of the component amounts used in the overall rate calculation.

             (3)  If:

                     (a)  a person has a relationship with a person of the opposite sex ( other person ); and

                     (b)  the relationship between them is a marriage‑like relationship in the Secretary's opinion (formed after the Secretary has had regard to all the circumstances of the relationship, including, in particular, the matters referred to in paragraphs 4(3)(a) to (e) and subsection 4(3A));

                     (c)  either or both of them are under the age of consent applicable in the State or Territory in which they are living;

the person's pension rate is not to exceed the rate at which it would be payable to the person if the other person were the person's partner.

Note 1:       although there is only 1 maximum basic rate specified in point 1066‑B1 of Pension Rate Calculator C, the ordinary income test (Module E) and assets test (Module G) do depend on whether the recipient is a member of a couple or not.

Pension Rate Calculator C

Module A -- Overall rate calculation process

Method of calculating rate

    1066‑A1  The rate of pension is a daily rate. That rate is worked out by dividing the annual rate calculated according to this Rate Calculator by 364 (fortnightly rates are provided for information only).

Note 1:       if a person's assets reduced rate is less than the person's income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 1129 and 1130).

Note 1A:    If a person's rate is, or is to be, an income reduced rate or an assets reduced rate, and at least one of those reduced rates is not a nil rate, the person may be able to take advantage of provisions dealing with the pension loans scheme (sections 1133AA to 1144).

Note 2:       if a person's rate is reduced under Step 11, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1210 (maximum basic rate first, then rent assistance).

Note 3:       although most of the categories of person whose rate is to be worked out using this Rate Calculator will not be members of a couple, some categories are persons who are members of a couple (see subparagraphs 249(1)(a)(ii) and (iii)).

Note 4:       in some circumstances a person may also be qualified for a pharmaceutical allowance under Part 2.22.

Note 5:       an amount of remote area allowance is to be added under Step 11 only if the person's rate of pension after Step 10 is greater than nil.

Members of a couple

    1066‑A2  If 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis (see points 1066‑E2, 1066‑F2 and 1066‑G2).

Module B -- Maximum basic rate
[ see Appendix for CPI adjusted figures]

Maximum basic rate

     1066‑B1  A person's maximum basic rate is $8,114.60 per year ($312.10 per fortnight).

Note:          the maximum basic rate is indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).

Module BA -- Pension supplement

Pension supplement

  1066‑BA1  The amount of a person's pension supplement depends on the person's maximum basic rate.

Amount of pension supplement

  1066‑BA2  The amount of a person's pension supplement is worked out by:

                     (a)  calculating the amount (the provisional supplement amount ) that is 4% of the person's 1 July 2000 maximum basic rate; and

                     (b)  rounding off the provisional supplement amount in accordance with points 1066‑BA4 to 1066‑BA6.

Note:          The pension supplement amount is indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).

  1066‑BA3  A person's 1 July 2000 maximum basic rate is the maximum basic rate that would have been the person's maximum basic rate if the rate had not changed since 1 July 2000.

Rounding off of provisional supplement amount

  1066‑BA4  If a provisional supplement amount is a multiple of $2.60, the amount of the pension supplement is the provisional supplement amount.

  1066‑BA5  If a provisional supplement amount is not a multiple of $2.60, the amount of the pension supplement is the provisional supplement amount rounded up or down to the nearest multiple of $2.60.

  1066‑BA6  If a provisional supplement amount is not a multiple of $2.60, but is a multiple of $1.30, the amount of the pension supplement is the provisional supplement amount rounded up to the nearest multiple of $2.60.

Module C -- Pharmaceutical allowance
[ see Appendix for CPI adjusted figures]

Qualification for pharmaceutical allowance

     1066‑C1  Subject to points 1066‑C2, 1066‑C3 and 1066‑C5, an additional amount by way of pharmaceutical allowance is to be added to a person's maximum basic rate if the person is an Australian resident.

No pharmaceutical allowance if person receiving pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act

     1066‑C2  Pharmaceutical allowance is not to be added to a person's maximum basic rate if the person is receiving pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act.

Note:          a person can receive both:

(a)     a disability pension under the VEA; and

(b)     a pension under this Act;

                   and pharmaceutical allowance might be built into the disability pension rate.

No pharmaceutical allowance before advance payment period ends

     1066‑C3  Pharmaceutical allowance is not to be added to a person's maximum basic rate if:

                     (a)  the person has received an advance pharmaceutical allowance under:

                              (i)  Part 2.23 of this Act; or

                             (ii)  Division 2 of Part VIIA of the Veterans' Entitlements Act; and

                     (b)  the person's advance payment period has not ended.

Note:          for advance payment period see point 1066‑C4.

Advance payment period

     1066‑C4  A person's advance payment period:

                     (a)  starts on the day on which the advance pharmaceutical allowance is paid to the person; and

                     (b)  ends after the number of paydays worked out using the following formula have passed:

where:

"amount of advance" is the amount of the advance paid to the person.

"pharmaceutical allowance rate" is the yearly amount of pharmaceutical allowance which would be added to the person's maximum basic rate in working out the instalment for the day on which the advance is paid if pharmaceutical allowance were to be added to the person's maximum basic rate on that day.

No pharmaceutical allowance if annual limit reached

     1066‑C5  Pharmaceutical allowance is not to be added to a person's maximum basic rate if:

                     (a)  the person has received an advance pharmaceutical allowance during the current calendar year; and

                     (b)  the total amount paid to the person for that year by way of:

                              (i)  pharmaceutical allowance; and

                             (ii)  advance pharmaceutical allowance;

equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.

Note 1:       for the amount paid to a person by way of pharmaceutical allowance see subsections 19A(2) to (6).

Note 2:       the annual limit is affected by:

*          how long during the calendar year the person was on pension or benefit;

*          the rate of pharmaceutical allowance the person attracts at various times depending on the person's family situation.

VEA and MRCA payments taken into account

     1066‑C6  In points 1066‑C4 and 1066‑C5:

"advance pharmaceutical allowance" includes advance pharmaceutical allowance under the Veterans' Entitlements Act.

"pharmaceutical allowance" includes pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act.

Amount of pharmaceutical allowance

     1066‑C7  The amount of pharmaceutical allowance is $135.20 per year ($5.20 per fortnight).

Note:          the annual amount is adjusted annually in line with CPI increases (see section 1206A).

Module E -- Ordinary income test
[ see Appendix for CPI adjusted figures]

Effect of income on maximum payment rate

     1066‑E1  This is how to work out the effect of a person's ordinary income on the person's maximum payment rate:

Note 1:       see point 1066‑A1 (Steps 5 to 8) for the significance of the person's reduction for ordinary income.

Note 2:       the application of the ordinary income test is affected by provisions concerning:

*          the general concept of ordinary income (sections 1072 and 1073);

*          business income (sections 1074 and 1075);

*          deemed income from financial assets (sections 1076 to 1084);

*          income from income streams (sections 1095 to 1099DAA);

*          disposal of income (sections 1106 to 1112);

Ordinary incomes of members of couples

     1066‑E2  If a person is a member of a couple, add the couple's ordinary incomes (on a yearly basis) and divide by 2 to work out the amount of the person's ordinary income for the purposes of this Module.

How to calculate a person's ordinary income free area

     1066‑E4  A person's ordinary income free area is worked out using Table E. The ordinary income free area is the amount in column 1 plus an additional amount in column 3 for each dependent child of the person.

Note 1:       for dependent child see section 5 and point 1066‑E10.

Note 2:       the basic free area per year is indexed annually in line with CPI increases (see sections 1191 to 1194).

Reduction of additional free area for dependent children

     1066‑E5  The additional free area for a dependent child is reduced by the annual amount of any payment received by the person for or in respect of that particular child. The payments referred to in point 1066‑E6 do not result in a reduction.

     1066‑E6  No reduction is to be made under point 1066‑E5 for a payment:

                     (a)  under this Act; or

                     (b)  of maintenance income; or

                     (c)  under the Veterans' Entitlements Act; or

                     (d)  under an Aboriginal study assistance scheme; or

                     (e)  under the Assistance for Isolated Children Scheme.

Note:          for Aboriginal study assistance scheme see subsection 23(1).

     1066‑E7  Examples of the kinds of payments that result in a reduction under point 1066‑E5 are:

                     (a)  amounts received from State authorities or benevolent societies in respect of the boarding out of the child; or

                     (b)  amounts of superannuation or compensation paid in respect of the child; or

                     (c)  amounts (other than amounts covered by point 1066‑E5 above) paid in respect of the child under educational schemes; or

                     (e)  foster care allowance payments made by a State welfare authority.

ORDINARY INCOME FREE AREA EXAMPLE (using rates to 30.6.91)              

Example     

Facts             Mary is a sole parent with 2 dependent children, Jim and Susan. Mary is getting a family allowance payment from another country for Jim at the rate of $40 a month. On a yearly basis, this amounts to $480.

Application    Point 1066‑E4 applies to Mary (see paragraph 1066‑E7(d)). As a result, the possible additional free area per year for Jim ($624) must be reduced by $480.

                      Mary's ordinary income free area per year is therefore:

Reduction for ordinary income

     1066‑E8  A person's reduction for ordinary income is:

Ordinary income excess

     1066‑E9  A person's ordinary income excess is the person's ordinary income less the person's ordinary income free area.

   1066‑E10  In this Module:

"dependent child" , in relation to a person, includes any child of the person who is under 18 and is receiving a youth allowance.

Module G -- Assets test
[ see Appendix for CPI adjusted figures]

Effect of assets on maximum payment rate

     1066‑G1  This is how to work out the effect of a person's assets on the person's maximum payment rate:

Note 1:       see point 1066‑A1 (Steps 9 and 10) for the significance of the person's reduction for assets.

Note 2:       the application of the assets test is affected by provisions concerning:

*          disposal of assets (sections 1123 to 1128);

*          retirement villages (sections 1145 to 1157);

*          financial hardship (sections 1129 and 1130);

*          the pension loans scheme (sections 1133 to 1144).

Value of assets of members of couples

     1066‑G2  For the purposes of this Module:

                     (a)  the value of the assets of a member of a couple is to be taken to be 50% of the sum of:

                              (i)  the value of the person's assets; and

                             (ii)  the value of the person's partner's assets; and

                     (b)  the value of the assets of a particular kind of a member of a couple is to be taken to be 50% of the sum of:

                              (i)  the value of the person's assets of that kind; and

                             (ii)  the value of the person's partner's assets of that kind.

Assets value limit

     1066‑G3  A person's assets value limit is worked out using Table G. Work out which family situation applies to the person. The assets value limit is the corresponding amount in column 3.

Note 1:       for member of a couple , partnered (partner getting neither pension nor benefit) and partnered (partner getting pension or benefit) see section 4.

Note 2:       for homeowner see section 11.

Note 3:       the assets value limits are indexed or adjusted annually in line with CPI increases (see sections 1191 to 1194 and 1203).

Pension reduction for assets in excess of assets value limit

     1066‑G4  A person's reduction for assets is:

Assets excess

     1066‑G5  A person's assets excess is the value of the person's assets less the person's assets value limit.

     1066‑G6  In calculating a person's assets excess under points 1066‑G4 and 1066‑G5 disregard any part of that excess which is not a multiple of $250.

Module H -- Remote Area Allowance

Remote area allowance

    1066‑H1  An amount by way of remote area allowance is to be added to a person's rate of pension if:

                    (aa)  either:

                              (i)  the person's rate of pension apart from this point is greater than nil; or

                             (ii)  apart from this point the person's rate of pension would be nil merely because an advance pharmaceutical allowance has been paid to the person under:

                                        (A)  Part 2.23 of this Act; or

                                        (B)  Division 2 of Part VIIA of the Veterans' Entitlements Act; and

                     (a)  the person's usual place of residence is situated in the remote area; and

                     (b)  the person is physically present in the remote area.

Note:          for remote area and physically present in the remote area see section 14.

Rate of remote area allowance

    1066‑H2  The rate of remote area allowance payable to a person is worked out using Table H. Work out which family situation in the Table applies to the person. The rate of remote area allowance is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each FTB child, and each regular care child, of the person.

Note:          For member of couple , partnered and partnered (partner in gaol) see section 4.

Special rule where partner has an FTB or regular care child but is not receiving a pension

    1066‑H4  If:

                     (a)  a person who is a member of a couple is qualified for an amount by way of remote area allowance; and

                     (b)  the person's partner is not receiving a pension or benefit; and

                     (c)  the person's partner has an FTB child or a regular care child;

the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.

Special rule where partner has an FTB or regular care child but is not receiving additional allowance for the child

    1066‑H5  If:

                     (a)  a person who is a member of a couple is qualified for an amount by way of remote area allowance; and

                     (b)  the person's partner has an FTB child or a regular care child; and

                     (c)  the person's partner is not receiving additional allowance for the child;

the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.

Special rule dealing with the death of an FTB or regular care child

    1066‑H6  If an FTB child, or a regular care child, of a person dies, this Module has effect, for a period of 14 weeks after the death of the child, as if the child had not died.

Note:          This point does not prevent this Module having the effect it would have had if the child would otherwise have ceased to be an FTB child, or a regular care child, during that 14 weeks.