Commonwealth Consolidated Acts

SOCIAL SECURITY ACT 1991 - SECT 1066A

             (1)  The rate of disability support pension of a person who has not turned 21 is, subject to subsection (2), 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.

             (2)  Subsection (1) does not apply if the person is permanently blind.

Note:          the rate for a disability support pension payable to a person under 21 who is permanently blind is dealt with in section 1066B.

             (3)  A person's disability support pension rate is not to exceed the rate at which a disability support pension would be payable to that person if the person's rate were calculated using Pension Rate Calculator A at the end of section 1064.

             (5)  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 disability support 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:          this provision has the effect of taking into account the ordinary income, maintenance income and assets of the partner in applying the ordinary income test, maintenance income test and assets test respectively.

Pension Rate Calculator D

Module A -- Overall rate calculation process

Method of calculating rate

  1066A‑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 2:       if a person's rate is reduced under Step 12 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 and youth disability supplement first, then rent assistance).

Note 3:       the rate calculation for a member of a couple is affected by the operation of points 1066A‑A2.

Note 5:       an amount of remote area allowance is to be added under Step 12 if the person's rate of pension after Step 11 is greater than nil.

Members of a couple

  1066A‑A2  Where 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 1066A‑F2, 1066A‑G3 and 1066A‑H2 below). They will also be treated as sharing expenses (e.g. for rent) on a 50/50 basis (see section 1070V).

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

Maximum basic rate

  1066A‑B1  A person's maximum basic rate is to be worked out using Table B. Work out the family situation and whether the person has a dependent child. The maximum basic rate is the corresponding amount in column 3.

Note 1:       For member of a couple , partnered , illness separated couple , respite care couple and partnered (partner in gaol) see section 4.

Note 2:       For dependent child and independent see section 5.

Note 3:       For living away from the person's parental home see subsection 23(4D).

Note 4:       The rates in columns 3A and 3B are adjusted annually in line with CPI changes (see section 1198B).

Module C -- Youth disability supplement
[ see Appendix for CPI adjusted figures]

Youth disability supplement

  1066A‑C1  An amount by way of youth disability supplement is to be added to a person's rate. The rate of youth disability supplement is $1,557.40 per year ($59.90 per fortnight).

Note 1:       the rate of youth disability supplement is adjusted annually in line with CPI increases (see section 1198C).

Note 2:       on 1 January 1992 the rate of youth disability supplement is to be increased by $111.80 ($4.30 per fortnight), under section 45 of the Social Security Legislation Amendment Act (No. 3) 1991 . This is in addition to the annual CPI indexation occurring on 1 January 1992.

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

Qualification for pharmaceutical allowance

  1066A‑D1  Subject to points 1066A‑D2, 1066A‑D3,1066A‑D4 and 1066A‑D6, 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

  1066A‑D2  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.

No pharmaceutical allowance if partner receiving pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act and not a service pensioner

  1066A‑D3  Pharmaceutical allowance is not to be added to a person's maximum basic rate if:

                     (a)  the person is a member of a couple; and

                     (b)  the person's partner is receiving pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act; and

                     (c)  the person's partner is not receiving a service pension.

No pharmaceutical allowance before advance payment period ends

  1066A‑D4  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 1066A‑D5.

Advance payment period

  1066A‑D5  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

  1066A‑D6  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

  1066A‑D7  In points 1066A‑D5 and 1066A‑D6:

"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

  1066A‑D8  The amount of pharmaceutical allowance is the amount per year worked out using the following Table:

Note 1:       For member of couple , partnered , illness separated couple , respite care couple and partnered (partner in gaol) see section 4.

Note 2:       The amounts in column 3 are adjusted annually in line with CPI increases (see section 1206A).

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

Effect of income on maximum payment rate

  1066A‑F1  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 1066A‑A1 (Steps 6 to 9) 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

  1066A‑F2  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.

Payment of arrears of periodic compensation payments

1066A‑F2A  If:

                     (a)  at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving disability support pension; and

                     (b)  in relation to that entitlement, the person receives a payment of arrears of periodic compensation;

the person is taken to receive on each day in the periodic payments period an amount calculated by dividing the amount received by the number of days in the periodic payments period.

Note:          for periodic payments period see section 17.

How to calculate a person's ordinary income free area

  1066A‑F3  A person's ordinary income free area is worked out using Table F‑1. Work out which family situation in Table F‑1 applies to the person. The ordinary income free area is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each dependent child of the person.

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

Note 2:       for dependent child see section 5 and point 1066A‑F11.

Note 3:       items 2, 3 and 4 of Table F‑1 apply to members of illness separated couples.

Note 4:       the basic free area limits are indexed annually in line with CPI increases (see sections 1191 to 1194).

No additional free area for certain prescribed student children

  1066A‑F4  No additional free area is to be added for a dependent child who:

                     (a)  has turned 18; and

                     (b)  is a prescribed student child;

unless the person whose rate is being calculated, or the person's partner, receives carer allowance for the child.

Reduction of additional free area for dependent children

  1066A‑F5  The additional free area for a dependent child of a person to whom item 1, 2 or 3 of Table F‑1 applies is reduced by the annual amount of any payment received by the person or the person's partner for or in respect of that particular child. The payments referred to in point 1064‑F7 do not result in a reduction.

  1066A‑F6  The additional free area for a dependent child of a person to whom item 4 of Table F‑1 applies is reduced by 50% of the annual amount of any payment received by the person or the person's partner for or in respect of that particular child. The payments referred to in point 1066A‑F7 do not result in a reduction.

  1066A‑F7  No reduction is to be made under point 1066A‑F5 or 1066A‑F6 for a payment:

                     (a)  under this Act; or

                     (b)  of maintenance income; or

                     (c)  under the VEA; 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).

  1066A‑F8  Examples of the kinds of payments that result in a reduction under points 1066A‑F5 and 1066A‑F6 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 1066A‑F7 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 EXAMPLES (using rates to 30.6.91)            

Example 1: 

Facts             Wayne and Mary are members of a couple. They both receive pensions. They have 2 dependent children--Max and Angela. Angela is being fostered by Wayne and Mary and they receive $15 per week from the NSW Government by way of a foster care payment in respect of Angela.

Application    The foster care payment calculated on a yearly basis is
$15 x 52 = $780. As point 1066A‑F6 applies to Wayne and Mary (they are covered by item 4 of Table F‑1 in point 1066A‑F3), the reduction is at the 50% rate (i.e. $390 per year). The possible additional amount for Angela ($312) is therefore reduced to nil.

                      The amount that Wayne gets for Max is not subject to reduction and is $312 per year. Mary gets $312 for Max as well.

                      Wayne's ordinary free area limit is $1,820 + $312 = $2,132. Mary's ordinary free area limit is the same.

Example 2: 

Facts             The same facts as in Example 1 except that Wayne and Mary receive only $10 a week ($520 a year) foster care payment for Angela.

Application    The amount that each person would be allowed for Angela is:

                      Then each would have an ordinary free area limit of
$1,820 + $312 + $52 = $2,184.

Pension reduction for ordinary income in excess of ordinary income free area

  1066A‑F9  A person's reduction for ordinary income is worked out using Table F‑2. Work out which family situation applies to the person. The reduction for ordinary income is the amount per year worked out using the corresponding calculation in column 3.

Note 1:       for member of a couple , partnered (partner getting neither pension not benefit) , partnered (partner getting benefit) and partnered (partner getting pension) see section 4.

Note 3:       for ordinary income excess see point 1066A‑F10 below.

Ordinary income excess

1066A‑F10  A person's ordinary income excess is the person's ordinary income less the person's ordinary income free area.

1066A‑F11  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 -- Payments taken to be ordinary income
[ see Appendix for CPI adjusted figures]

Application of this Module

  1066A‑G1  This Module applies to a person and, if the person is a member of a couple, the person's partner.

Lump sum payments arising from termination of employment

  1066A‑G2  Subject to points 1066A‑G3 to 1066A‑G14 (inclusive), if:

                     (a)  a person's employment has been terminated; and

                     (b)  as a result the person is entitled to a lump sum payment from the person's former employer;

the person is taken to have received the lump sum payment on the day on which the person's employment was terminated.

Directed termination payments excluded

  1066A‑G3  If:

                     (a)  a person's employment has been terminated; and

                     (b)  as a result the person is entitled to a lump sum payment from the person's former employer; and

                     (c)  the payment, or part of the payment, is a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997 ;

the payment, or that part, is to be disregarded in working out the ordinary income of the person for the purposes of Module F.

Certain leave payments taken to be ordinary income--employment continuing

  1066A‑G4  If:

                     (a)  a person is employed; and

                     (b)  the person is on leave for a period; and

                     (c)  the person is or was entitled to receive a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise) in respect of a part or all of a leave period;

the person is taken to have received ordinary income for a period (the income maintenance period ) equal to the leave period to which the leave payment entitlement relates.

Certain payments taken to be ordinary income--employment terminated

  1066A‑G5  If:

                     (a)  a person's employment has been terminated; and

                     (b)  the person receives a termination payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise);

the person is taken to have received ordinary income for a period (the income maintenance period ) equal to the period to which the payment relates.

More than one termination payment on a day

  1066A‑G6  If:

                     (a)  a person is covered by point 1066A‑G5; and

                     (b)  the person receives more than one termination payment on a day;

the income maintenance period is worked out by adding the periods to which the payments relate.

Start of income maintenance period--employment continuing

  1066A‑G7  If a person is covered by point 1066A‑G4, the income maintenance period starts on the first day of the leave period to which the leave payment entitlement relates.

Start of income maintenance period--employment terminated

  1066A‑G8  If a person is covered by point 1066A‑G5, the income maintenance period starts, subject to point 1066A‑G9, on the day on which the person is paid the termination payment.

Commencement of income maintenance period where there is a second termination payment

  1066A‑G9  If:

                     (a)  a person who is covered by point 1066A‑G5 is subject to an income maintenance period (the first period ); and

                     (b)  the person is paid another termination payment during that period (the second termination payment );

the income maintenance period for the second termination payment starts on the day after the end of the first period.

Leave payments or termination payments in respect of periods longer than a fortnight

1066A‑G10  If:

                     (a)  a person receives a leave payment or termination payment; and

                     (b)  the payment is in respect of a period longer than a fortnight;

the person is taken to receive in a payment fortnight or part of a payment fortnight an amount calculated by:

                     (c)  dividing the amount received by the number of days in the period to which the payment relates (the daily rate ); and

                     (d)  multiplying the daily rate by the number of days in the payment fortnight that are also in the period.

1066A‑G11  If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person.

Note 1:       For in severe financial hardship see subsection 19C(2) (person who is not a member of a couple) and subsection 19C(3) (person who is a member of a couple).

Note 2:       For unavoidable or reasonable expenditure see subsection 19C(4).

Note 3:       If an income maintenance period applies to a person, then, during that period:

(a)           the pension claimed may not be payable to the person; or

(b)           the amount of the pension payable to the person may be reduced.

When a person receives a leave payment or a termination payment

1066A‑G12  For the purposes of points 1066A‑G3 to 1066A‑G11 (inclusive), a person (the first person ) is taken to receive a leave payment or termination payment if:

                     (a)  the payment is made to another person:

                              (i)  at the direction of the first person or a court; or

                             (ii)  on behalf of the first person; or

                            (iii)  for the benefit of the first person; or

                     (b)  the first person waives or assigns his or her right to receive the payment.

Single payment in respect of different kinds of termination payments

1066A‑G13  If a person who is covered by point 1066A‑G5 receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1066A‑G4 to 1066A‑G12 (inclusive):

                     (a)  each part of the payment that is in respect of a different kind of termination payment is taken to be a separate payment; and

                     (b)  the income maintenance period in respect of the single payment is worked out by adding the periods to which the separate payments relate.

Definitions

1066A‑G14  In this Module:

"leave payment" includes a payment in respect of sick leave, annual leave, maternity leave and long service leave.

"payment fortnight" means a fortnight in respect of which a disability support pension is paid, or would be paid apart from the application of an income maintenance period, to a person.

"period to which the payment relates" means:

                     (a)  if the payment is a leave payment--the leave period to which the payment relates; or

                     (b)  if the payment is a redundancy payment and is calculated as an amount equivalent to an amount of ordinary income that the person would (but for the redundancy) have received from the employment that was terminated--the period for which the person would have received that amount of ordinary income; or

                     (c)  if the payment is a redundancy payment and paragraph (b) does not apply--the period of weeks (rounded down to the nearest whole number) in respect of which the person would have received ordinary income, from the employment that was terminated, of an amount equal to the amount of the redundancy payment if:

                              (i)  the person's employment had continued; and

                             (ii)  the person received ordinary income from the employment at the rate per week at which the person usually received ordinary income from the employment prior to the termination.

"redundancy payment" does not include a directed termination payment within the meaning of section 82-10F of the Income Tax (Transitional Provisions) Act 1997 .

"termination payment" means:

                     (a)  a leave payment relating to a person's employment that has been terminated; or

                     (b)  a redundancy payment.

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

Effect of assets on maximum payment rate

  1066A‑H1  This is how to work out the effect of a person's assets on the person's maximum payment rate:

Note 1:       see point 1066A‑A1 Steps 10 and 11 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 pensions loans scheme (sections 1133 to 1144).

Value of assets of members of couples

  1066A‑H2  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

  1066A‑H3  A person's assets value limit is worked out using Table H‑1. Work out the person's family situation and home ownership situation. 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:       items 2 and 3 apply to members of illness separated couples.

Note 4:       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

  1066A‑H4  A person's reduction for assets is worked out using Table H‑2. Work out which family situation applies to the person. The reduction for assets is the amount per year worked out using the corresponding calculation in column 3.

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

Note 3:       for assets excess see point 1066A‑H5 below.

Assets excess

  1066A‑H5  A person's assets excess is the value of the person's assets less the person's assets value limit.

  1066A‑H7  In calculating a person's assets excess under point 1066A‑H5 disregard any part of the excess that is not a multiple of $250.

Module I -- Remote area allowance

Remote area allowance

   1066A‑I1  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

   1066A‑I2  The rate of remote area allowance payable to a person is worked out using Table I. 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 , illness separated couple , respite care couple 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

   1066A‑I4  If:

                     (a)  a person who is a member of a couple is qualified for an amount by way of additional 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 ad