SOCIAL SECURITY ACT 1991 No. 46, 1991 - SECT 1064 Rate of age, invalid, wife and carer pensions (people who are not blind)
SOCIAL SECURITY ACT 1991 No. 46, 1991 - SECT 1064
Rate of age, invalid, wife and carer pensions (people who are not blind)1064. (1) The rate of: (a) age pension; and (b) invalid pension; and (c) wife pension; and (d) carer pension; and (e) sole parent pension in a case where the recipient is qualified for the pension because of subparagraph 249 (1) (a) (iv) (illness separation); is, subject to subsection (2), to be calculated in accordance with the Rate Calculator at the end of this section. Note 1: 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. Note 2: the rate obtained by applying the Rate Calculator may be reduced because of: . the receipt of compensation (see Part 3.14); or . overseas portability (see Part 4.2 - Division 3); or . the receipt of payments under the New Enterprise Incentive Scheme (see Part 3.15). (2) Subsection (1) does not apply to a person's age or invalid pension if the person is permanently blind. Note: the rate for an age pension or invalid pension payable to a person who is permanently blind is dealt with in section 1065. (3) If: (a) a person is a member of a couple; and (b) the person's partner: (i) is not receiving a social security or service pension; and (ii) is receiving a social security benefit; the person's pension rate is not to exceed twice the rate at which a pension would be payable to that person if the person's partner were receiving a pension or benefit of that kind. Note: "social security pension" includes a sheltered employment or rehabilitation allowance. (4) If: (a) a person is living with another person as the spouse of that other person on a genuine domestic basis although not legally married to the other person; and (b) the other person is of the opposite sex; and (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: 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. Rate limited for armed service widow (5) If: (a) an armed services widow is receiving: (i) a pension under Part II or IV of the Veterans' Entitlements Act at a rate determined under or by reference to subsection 30 (1) of that Act; or (ii) a pension under the Seamen's War Pensions and Allowances Act 1940 at a rate determined under subsection 18 (2) of that Act; and (b) one of the following is payable to the widow: (i) an age pension; (ii) an invalid pension; (iii) a wife pension; (iv) a carer pension; the widow's pension rate is not to exceed: (c) if: (i) the widow has been receiving the payment referred to in paragraph (a) continuously since before 1 November 1986; and (ii) immediately before 1 November 1986, the widow was receiving a payment referred to in paragraph (b) at a rate exceeding $3,122.60; and (iii) the pension referred to in paragraph (b) is of the same type as the one which was payable to the person before 1 November 1986; the rate of pension received by the widow immediately before 1 November 1986; and (d) in any other case - $3,122.60. Note: for "armed services widow" see subsection 4 (1). PENSION RATE CALCULATOR A MODULE A - OVERALL RATE CALCULATION PROCESS Method of calculating rate 1064-A1. The rate of pension is an annual rate (fortnightly amounts are provided for information only). Method statement Step 1. Work out the person's maximum basic rate using MODULE B below. Step 2. Work out the amount per year (if any) for dependent children using MODULE C below. Step 3. Work out the amount per year (if any) for rent using MODULE D below. Step 4. Add up the amounts obtained in Steps 1, 2 and 3: the result is called the maximum payment rate. Step 5. Apply the ordinary income test using MODULE E below to work out the reduction for ordinary income. Step 6. Apply the maintenance income test using reduction for maintenance income. Step 7. Add up the reduction for ordinary income and the reduction for maintenance income: the result is called the total income reduction. Step 8. Take the total income reduction away from result is called the income reduced rate. Step 9. Apply the assets test using MODULE G below to work out the reduction for assets. Step 10. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate. Step 11. Compare the income reduced rate and the assets reduced rate: the rate of pension is: . (a) the income reduced rate if it is lower than the assets reduced rate; or . (b) the assets reduced rate if it is lower than the income reduced rate; or . (c) the income reduced rate if the income reduced rate and the assets reduced rate are exactly equal; plus any amount per year payable by way of remote area allowance (see MODULE H below) and any amount per year payable by way of incentive allowance (see MODULE J below). 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); . pensions loan scheme (section 1133). 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 1207 (maximum basic rate first, then rent assistance and finally child amounts). Note 3: the rate calculation for a member of a couple is affected by the operation of points 1064-A2 and 1064-A3. Note 4: points 1064-A4 and 1064-A5 explain the special treatment given to certain members of couples with dependent children. Members of a couple 1064-A2. Where 2 people are members of a couple, they will be treated as pooling on a 50/50 basis (see points 1064-E2, 1064-F2 and 1064-G2 below). They will also be treated as sharing expenses (e.g. for rent) on a 50/50 basis (see points 1064-D7 and 1064-D8 below). Application of Rate Calculator to sole parent pension 1064-A3. In applying this Rate Calculator in working out a person's sole parent pension rate, treat any maintained child of the person as if the child were a dependent child of the person. Note: for "maintained child" see subsection 5 (1) and section 250. Explanation/background information - pensioner couples with dependent children 1064-A4. This Rate Calculator has special income and assets test rules for pensioner couples with dependent children (see points 1064-E10 to 1064-E12, points 1064-F4 to 1064-F13 and points 1064-G4 to 1064-G7 below). Without these special rules, pensioner couples with dependent children could, in some circumstances, receive unfairly favourable treatment compared with other couples. This could arise because: (a) the member of a pensioner couple to whom dependent children are allocated (see point 1064-C2 below) starts from a maximum payment rate that is higher than that of the other member of the couple (see Module C below); and (b) the ordinary income, maintenance income and assets of the couple are taken to be shared between them on a 50/50 basis (see points 1064-E2, 1064-F2 and 1064-G2 below); and (c) the member of the couple who starts from the lower maximum payment rate could reach a nil income reduced rate or a nil assets reduced rate while the other member has an income reduced rate or an assets reduced rate higher than nil; and (d) if this occurs, part of the couple's ordinary income, maintenance income or assets would not be "taken into account" in the operation of the income and assets tests. 1064-A5. To remove this potentially unfairly favourable treatment, this Rate Calculator provides for: (a) an initial double reduction for excess income or assets against the additional amounts for dependent children (these are in the hands of the member who is receiving those additional amounts); and (b) if any excess income or assets remains - a normal reduction for the remaining excess against the maximum payment rate of each member. Under these rules, both members of pensioner couples with dependent children should always reach a nil income reduced rate or a nil assets reduced rate at the same time. MODULE B - MAXIMUM BASIC RATE Maximum basic rate 1064-B1. A person's maximum basic rate depends on the person's family situation. Work out which family situation in Table B applies to the person. The maximum basic rate is the corresponding amount in column 3. TABLE B MAXIMUM BASIC RATES item person's family situation rate per rate per year fortnight 1. Not member of a couple $7,584.20 $291.70 2. Partnered (partner getting neither $7,584.20 $291.70 pension nor benefit) 3. Partnered (partner getting pension $6,323.20 $243.20 or benefit) 4. Member of an illness separated or $7,584.20 $291.70 respite care couple Note 1: for "member of a couple", "partnered (partner getting neither pension nor benefit)", " partnered (partner getting pension or benefit)", "illness separated couple" and " respite care couple" see section 4. Note 2: the maximum basic rates are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194). MODULE C - ADDITIONAL AMOUNTS FOR DEPENDENT CHILDREN 1064-C1. This is how to work out the amount per year to be added to a person's maximum basic rate for dependent children: Method statement Step 1. Work out the amount of the dependent child add-on (if any) for each dependent child of the person using points 1064-C3 to 1064-C6. Step 2. Work out the amount per year of the person's guardian allowance (if any) using points 1064-C7 to 1064-C10. Step 3. Add up all of the amounts obtained in Steps 1 and 2: the result is called the DC total and is the amount to be added to the person's maximum basic rate under this Module. Note 1: a dependent child add-on may not apply to a dependent child if reasonable action has not been taken to obtain maintenance in respect of the child (see point 1064-C4), the child is covered by the Veterans' Entitlements Act (see point 1064-C5) or is a prescribed student child (see point 1064-C6). Note 2: guardian allownce is a single amount per year for parents who are not members of a couple or who are members of illness separated couples. Children of a couple 1064-C2. If either or both members of a couple have dependent children, this is how of this Module: (a) a dependent child of the man is to be taken into account as a dependent child of the woman and not of the man unless: (i) the woman is not receiving a social security pension; or (ii) the couple is an illness separated couple because of the illness or infirmity of the woman; and (b) a dependent child of the woman is to be taken into account as a dependent child of the man and not of the woman if: (i) the woman is not receiving a social security pension; or (ii) the couple is an illness separated couple because of the illness or infirmity of the woman. Note 1: "social security pension" includes a sheltered employment or rehabilitation allowance. Note 2: the following Table summarises the rules established by this point: work out which column applies to the man's payment entitlements (if any); work out the item that applies to the woman's payment entitlements (if any); find the box in that column that corresponds to that item; if the box contains the word "woman", the dependent children are allocated to the woman; if the box contains the word "man", the dependent children are allocated to the man: ALLOCATION OF DEPENDENT CHILDREN TABLE Column 1 Column 2 Column 3 man Column 3A Column 3B Column 3C social security social pension security (illness woman pension (separation) nothing 1. social security woman woman woman pension 2. social security man - woman pension (illness separation) 3. nothing man man - social security pension = the person is receiving a social security pension and the couple is not an illness separated couple because of the person's illness or infirmity. social security pension (illness separation) = the person is receiving a social security pension and the couple is an illness separated couple because of the person's illness or infirmity. nothing = the person is not receiving a social security pension (but may be receiving a social security benefit or a service pension). Note 3: if the woman is receiving a social security pension and the man is receiving an age service pension or an invalid service pension, the Veterans' Entitlements Act will allocate the dependent children to the man; the woman, although allocated the dependent children under point 1064-C2, will not receive additional amounts for the children because of point 1064-C5. Note 4: if one partner is receiving a social security pension and the other is receiving a social security benefit, the Benefit Rate Calculators operate to deny the social security benefit recipient from receiving anything for the dependent children (see point 1067- E3 of Benefit Rate Calculator A and point 1068-E3 of Benefit Rate Calculator B). 1064-C3. If a person has a dependent child, there is, subject to points 1064-C4, 1064-C5 and 1064-C6, a dependent child add-on for the child. The amount of the add-on depends on the child's age and is worked out using Table C. TABLE C ADD-ON FOR DEPENDENT CHILD rate per rate per item child's age year fortnight 1. under 13 $1,255.80 $48.30 2. 13 or over but under 16 $1,833 $70.50 3. 16 or over $884 $34 Note 1: the item 1 rate is adjusted annually so that additional pension amounts for children covered by this item do not fall below 15% of the combined pensioner couple maximum basic rate (see subsections 1200 (1) and (2). Note 2: the item 2 rate is adjusted annually so that the combined family allowance and this item do not fall below 20% of the combined pensioner couple maximum basic rate (see subsections 1200 (3) and (4). Note 3: the item 3 rate is not indexed. Failure to reasonably pursue maintenance claim 1064-C4. If: (a) a person's sole parent pension rate is being worked out using this Rate Calculator (see paragraph 1064 (1) (e)); and (b) the person is entitled to claim maintenance from someone else for a dependent child of the person; and (c) the Secretary considers that it is reasonable that the person should have taken action to obtain the maintenance; and (d) the person has not taken action that the Secretary considers reasonable to obtain the maintenance; there is no dependent child add-on for the dependent child. No add-on for child covered by Veterans' Entitlements Act 1064-C5. There is no dependent child add-on for a dependent child if the maximum rate of someone's service pension is increased because of the child under paragraph 47 (3) (b) of the VEA. 1064-C6. Once a dependent child of a person turns 16, there is no dependent child add-on for the child if the child is a prescribed student child. Note 1: for "prescribed student child" and "dependent child" see section 5. Note 2: even though no child add-on applies to a particular dependent child the child: (a) may attract guardian allowance under points 1064-C7 to 1064-C10; and (b) will attract additional free area under point 1064-E4 for the purposes of the ordinary income test. 1064-C7. Subject to points 1064-C8 and 1064-C9, a person who has a dependent child or dependent children is to have a single amount per year by way of guardian allowance if: (a) the person is not a member of a couple; or (b) the person is a member of an illness separated couple. No guardian allowance in respect of certain dependent children who have turned 18 1064-C8. Once a dependent child of a person turns 18, the child is not to be taken into account for the purposes of point 1064-C7 unless: (a) the child is a student child but not a prescribed student child; or (b) the person receives child disability allowance in respect of the child. 1064-C9. If: (a) a person's sole parent pension rate is being worked out using this Rate Calculator (see paragraph 1064 (1) (e)); and (b) the person is entitled to claim maintenance from someone else for a dependent child of the person; and (c) the Secretary considers that it is reasonable that the person should have taken action to obtain the maintenance; and (d) the person has not taken action that the Secretary considers reasonable to obtain the maintenance; the purposes of point 1064-C7. Rate of guardian allowance 1064-C10. The rate of guardian allowance is $670.80 a year ($25.80 a fortnight). Note: the rate of guardian allowance is indexed annually in line with CPI increases (see sections 1191 to 1194). MODULE D - RENT ASSISTANCE 1064-D1. An additional amount to help cover the cost of rent is to be added to a person's maximum basic rate if: (a) the person is not an ineligible homeowner; and (b) the person is not receiving incentive allowance; and (c) the person pays, or is liable to pay, rent (other than Government rent); and (d) the rent is payable at a rate of more than $1,040 per year ($40 per fortnight); and (e) the person is in Australia. Note: for "rent", "Government rent" and "ineligible homeowner" see section 13. No rent assistance if partner getting incentive allowance 1064-D2. If a person is a member of a couple and the person's partner is living with the person in their home, an additional amount is not to be added to the person's maximum basic rate under point1064-D1 if an amount by is being added to the maximum basic rate of the person's partner. Factors affecting rate of rent assistance 1064-D3. The rate of rent assistance depends on: (a) the annual rent paid or payable by the person; and (b) the number of pension increase children (if any) that the person has; and (c) whether or not the person has a partner with a rent increased pension. Note: for "pension increase child" see subsection 5 (15). 1064-D4. A person has a partner with a rent increased pension, for the purposes of this Module, if: (a) the partner is living with the person in their home; and (b) the partner is in receipt of a social security or service pension; and (c) the rate of the pension is increased to take account of rent paid or payable by the person. Note 1: "social security pension" includes a sheltered employment or rehabilitation allowance. Note 2: for the treatment of rent paid by a member of a couple see point 1064-D7. 1064-D5. The rate of rent assistance per fortnight is worked out using Table D. Work out the person's family situation and calculate Rate A for the person using the corresponding formula in column 3. This will be the person's rate of rent assistance but TABLE D RATE OF RENT ASSISTANCE The person's maximum rent assistance rate is Rate B for the person worked out using column 4 of the Table. Column 1 Column 2 Column 3 Column 4 family item situation Rate A Rate B Column 4A Column 4B Column 4C 3 or more No pension 1 or 2 pension increase pension increase children children children 1. Not member of Annual rent- $1,560 $1,820 $2,080 a couple $1,040 / 2 2. Partnered- Annual rent-$1,040 partner does 2 $1,560 $1,820 $2,080 not have rent increased pension 3. Partnered- Annual rent-$1,040 partner has 4 $780 $910 $1,040 rent increased pension Note 1: for "member of a couple" and "partnered" see section 4. Note 2: for "partner with a rent increase pension" see point 1064-D4. Note 3: the Rate B amounts are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194). Annual rent 1064-D6. Annual rent is the annual rent paid or payable by the person whose pension rate is being calculated. Rent paid by a member of a couple 1064-D7. If a person is a member of a couple and the person's partner is living with the person in their home, any rent that the person's partner pays or is liable to pay in respect of the home is to be treated as paid or payable by the person. Note: for "member of a couple" see section 4. Rent paid by a member of an illness separated or respite care couple 1064-D8. If a person is a member of an illness separated or respite care couple, any rent that the person's partner pays or is liable to pay in respect of the premises occupied by the person is to be treated as paid or payable by the person. Note: for "illness separated couple" and "respite care couple" see section 4. RENT ASSISTANCE EXAMPLES (using rates to 19.9.90) Example 1: Facts Jane is a pensioner who is not a member of a couple. She does not have any children and pays $55.00 a week for a small bedsitter. Application Item 1 of Table D in Point 1064-D5 applies to Jane. Rate A for Jane is: ($55 X 52) - $1,040 = $2,860 - $1,040 - $1,820 = $910 2 2 2 Rate B for Jane is $1,560. The lesser rate is $910. This is the yearly rate of Jane's rent assistance amount. Example 2: Facts Martha and Fred are both pensioners and are a couple. They rent a flat for $100 a week. They do not have any children. Application Rate A for Martha is: ($100 X 52) - $1,040 = $5,200 - $1,040 = $4,160 = $1,040 4 4 4 Rate B for Martha is $780. The lesser rate is $780. This is the yearly rate of Martha's rent assistance amount. The same calculation applies to Fred's yearly rate of rent assistance amount. Together they get $1,560 of annual rent assistance. Example 3: Facts Janet and Damian are both pensioners and are a couple. They rent a house for $120 a week. They have a son Boris for whom Janet gets a dependent child add-on under point 1064-C3. Application Item 3 of Table D in point 1064-D5 applies to both Janet and Damian. Rate A for Janet is: ($120 X 52) - $1,040 = $6,240 - $1,040 = $5,200 = $1,300 4 4 4 Rate B for Janet is $910. The lesser rate is $910. This is the yearly rate of Janet's rent assistance amount. The same calculation applies to Damian's yearly rate of rent assistance. Together they get $1,820 of annual rent assistance. MODULE E - ORDINARY INCOME TEST Effect of income on maximum payment rate 1064-E1. This is how to work out the effect of a person's ordinary income on the person's maximum payment rate: Method statement Step 1. Work out the amount of the person's ordinary income on a yearly basis. Note: for the treatment of the ordinary income of members of a couple see point 1064-E2. Step 2. Work out the person's ordinary free area limit (see points 1064-E4 to 1064-E9 below). Note: a person's ordinary income free area is the maximum amount of ordinary income the person can have without affecting the person's pension rate. Step 3. Work out whether the person's ordinary income exceeds the person's ordinary income free area. Step 4. If the person's ordinary income does not exceed the person's ordinary income free area, the person's ordinary income excess is nil. Step 5. If the person's ordinary income exceeds the person's ordinary income free area, the person's ordinary income excess is the person's ordinary income less the person's ordinary income free area. Step 6. Use the person's ordinary income excess to work out the person's reduction for ordinary income using points 1064-E10 to 1064-E12 below. Note 1: see point 1064-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: . investment income (sections 1073 to 1099); . disposal of income (sections 1106 to 1112); . earnings credit (sections 1113 to 1115). Ordinary incomes of members of couples 1064-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. Ordinary free area limit 1064-E3. A person's ordinary income free area is the amount of ordinary income the person can have without any deduction being made from the person's maximum payment rate. How to calculate a person's ordinary free area limit 1064-E4. A person's ordinary free area limit is worked out using Table E-1. Work out which family situation in Table E-1 applies to the person. The ordinary free area limit is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each dependent child of the person. TABLE E-1 ORDINARY FREE AREA LIMITS Column 1 Column 2Column Column Column 5 Column 6 3 4 basic basic additional additional free free free free area area area area item category of person per year per fortn. per year per fortn. 1. Not member of a couple $2,080 $80 $624 $24 2. Partnered (partner $1,820 $70 $624 $24 getting neither pension nor benefit) 3. Partnered (partner $1,820 $70 $624 $24 getting benefit) 4. Partnered (partner $1,820 $70 $312 $12 getting pension) 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. Note 3: items 2, 3 and 4 of Table E-1 apply to members of illness separated and respite care 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 1064-E5. 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 child disability allowance for the child. Reduction of additional free area for dependent children 1064-E6. The additional free area for a dependent child of a person to whom item 1, 2 or 3 of Table E-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-E8 do not result in a reduction. 1064-E7. The additional free area for a dependent child of a person to whom item 4 of Table E-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 1064-E8 do not result in a reduction. 1064-E8. No reduction is to be made under point 1064-E6 or 1064-E7 for a payment: (a) under this Act; or (b) of maintenance income; or (c) under the VEA; or (d) under the AUSTUDY scheme; or (e) under the Assistance for Isolated Children Scheme; or (f) that is similar to family allowance and that prevents a family allowance from being paid under section 837. 1064-E9. Examples of the kinds of payments that result in a reduction under points 1064-E6 and 1064-E7 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 1064-E8 above) paid in respect of the child under educational schemes; or (d) a family allowance or similar payment made by another country where this does not preclude payment of Australian family allowance; or (e) foster care allowance payments made by a State welfare authority. ORDINARY FREE AREA LIMIT EXAMPLES 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 1064-E7 applies to Wayne and Mary (they are covered by item 4 of Table E-1 in point 1064-E4), 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: $312 - 520 = $312 - 260 = $52 2 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 free area limit 1064-E10. A person's reduction for ordinary income is worked out using Table E-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. TABLE E-2 REDUCTION FOR ORDINARY INCOME Column 1 Column 2 Column 3 item person's family situation reduction 1. Not member of a couple ordinary income excess 2 2. Partnered (partner getting ordinary income excess neither pension nor benefit) 2 3. Partnered (partner getting ordinary income excess benefit) 2 4. Partnered (partner getting ordinary income excess pension (neither person nor 2 partner has additional amounts for dependent children 5. Partnered (partner getting DC excess + remaining excess pension) person has additional 2 amounts for dependent children 6. Partnered (partner getting remaining excess pension) partner has additional 2 amounts for dependent children 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 "additional amounts for dependent children" see subsection 23 (1). Note 3: "social security pension" includes a sheltered employment or rehabilitation allowance. Note 4: for "ordinary income excess" see point 1064-E11 below. Note 5: for "DC excess" and "remaining excess" see point 1064-E12 below. Note 6: for background information on the special treatment given to people covered by items 5 and 6 of Table E-2 see points 1064-A4 and 1064-A5 above. 1064-E11. A person's ordinary income excess is the person's ordinary income less the person's ordinary free area limit. Working out DC excess and remaining excess 1064-E12. For the purposes of Table E-2, if a member of a couple (in this point dependent children: (a) the additional amounts for dependent children total (the "DC total") is the sum of the amounts the DC partner has by way of additional amounts for dependent children; and (b) if the DC partner's ordinary income excess (see point 1064-E11 above) is less than or equal to the DC total: (i) the DC excess is the DC partner's ordinary income excess; and (ii) the remaining excess is nil; and (c) if the DC partner's ordinary income excess (see point 1064-E11 above) is greater than the DC total: (i) the DC excess is the DC total; and (ii) the remaining excess is the DC partner's ordinary income excess less the DC total. Note: for "additional amount for dependent children" see subsection 23 (1). MODULE F - MAINTENANCE INCOME TEST Effect of maintenance income on maximum payment rate 1064-F1. This is how to work out the effect of a person's maintenance income on the person's maximum payment rate: Method statement Step 1. Work out the amount of the person's maintenance income on a yearly basis. Note 1: for the treatment of the maintenance income of members of a couple see points 1064-F2 and 1064-F3. Note 2: "special maintenance income" (see subsection 10 (1)) can in some circumstances be disregarded under points 1064-F4 to 1064-F6. Step 2. Work out the person's maintenance income free area limit (see points 1064-F9 and 1064-F10 below). Note: a person's maintenance income free area is the maximum amount of maintenance income the person can have without affecting the person's pension rate. Step 3. Work out whether the person's maintenance income exceeds the person's maintenance income free area. Step 4. If the person's maintenance income does not exceed the person's maintenance income free area, the person's maintenance income excess is nil. Step 5. If the person's maintenance income exceeds the person's maintenance income free area, the person's maintenance income excess is the person's maintenance income less the person's maintenance income less the person's maintenance income free area. Step 6. Use the person's maintenance income excess to work out the person's reduction for maintenance income using points 1064-F11 to 1064-F13 below. Note 1: see point 1064-A1 (Steps 5 to 8) for the significance of the person's reduction for maintenance income. Note 2: the application of the maintenance income test is affected by provisions concerning: . apportionment of capitalised maintenance income (section 1116); . non-cash housing maintenance - value of substitute Dependent child 1064-F1A. In working out whether a young person is a dependent child for the purposes of this Module, disregard subsection 5 (3). Maintenance incomes of members of couples 1064-F2. If the person is a member of a couple, add the couple's maintenance incomes (on a yearly basis) and divide by 2 to work out the amount of the person's maintenance income for the purposes of this Module. 1064-F3. Point 1064-F2 does not apply to a person if the person's partner: (a) is not in receipt of: (i) a social security or service pension; or (ii) a social security benefit; and (b) does not have maintenance income. Note: "social security pension" includes a sheltered employment or rehabilitation allowance. Special maintenance income 1064-F4. Subject to points 1064-F7 and 1064-F8, if a person has special maintenance income in excess of the ceiling applicable to the person, the excess is disregarded for the purposes of this Module. Note: see subsection 10 (1) for "special maintenance income". 1064-F5. If a person: (a) is a member of a couple; and (b) has a dependent child; and (c) the person's partner is in receipt of a social security or service pension; the ceiling applicable to the person is the amount equal to the person's maintenance income free area limit plus: combined maximum rates 4 where: combined maximum rates is the sum of: (a) the maximum payment rate of pension applicable to the person; and (b) the maximum payment rate of social security or service pension applicable to the person's partner; and (c) any incentive allowance payable to the person or the person's partner. Note: "social security pension" includes a sheltered employment or rehabilitation allowance. 1064-F6. If a person is not covered by point 1064-F5, the ceiling applicable to the person is the amount equal to the person's maintenance income free area limit plus: person's maximum basic rate + incentive allowance 2 Special maintenance income not disregarded where child support available 1064-F7. No amount is to be disregarded under point 1064-F4 if: (a) child support is not payable under the Child Support (Assessment) Act 1989 to the person for a child; and (b) the person is entitled to make an application for assessment of child support under Part V of that Act for the child payable by another person; and (c) the person has: (i) neither: (A) properly made such an application; nor (B) properly made an application under Part VI of that Act for acceptance of an agreement in relation to the child; or (ii) the person has properly made an application of either kind, but: (A) the person has subsequently withdrawn the application; or (B) after child support has become payable by the other person under that Act for the child, the person has ended the entitlement to child support. 1064-F8. No amount is to be disregarded under point 1064-F4 if: (a) child support is payable under the Child Support (Assessment) Act 1989 to the person for a child; and (b) the person is entitled to make an application under section 128 of that Act; and (c) an application by the person under that section is not in force. How to calculate a person's maintenance income free area limit 1064-F9. A person's maintenance income free area limit is worked out using Table F-1. Work out which family situation in Table F-1 applies to the person. The maintenance income free area limit is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each dependent child after the first. TABLE F-1 MAINTENANCE INCOME FREE AREA LIMIT basic basic additional additional free free free free area area area area per per per per item person's family year fortn. year fortnight situation 1. Not member of a couple $780 $30 $260 $10 2. Partnered (partner $780 $30 $260 $10 getting neither pension nor benefit) 3. Partnered (partner $780 $30 $130 $5 getting pension or benefit)-both the person and the partner are receiving maintenance income 4. Partnered (partner $390 $15 $130 $5 getting pension or benefit)-either the person or the partner (but not both) are receiving maintenance income 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 "dependent child" see section 5. Note 3: items 2, 3 and 4 of Table F-1 apply to members of illness separated and respite care couples. 1064-F10. In determining whether or not item 3 or 4 of Table F-1 applies to a person point 1064-F2 is to be disregarded. This has the effect of taking into account only maintenance income that the person actually receives rather than any income that the person is to be taken to receive because of maintenance income received by the person's partner. Pension reduction for maintenance income in excess of maintenance free area limit 1064-F11. A person's reduction for maintenance income is worked out using Table F-2. Work out which family situation applies to the person. The reduction for maintenance income is the amount per year worked out using the corresponding calculation in column 3. TABLE F-2 REDUCTION FOR MAINTENANCE INCOME column 1 column 2 column 3 item person's family reduction situation 1. Not member of a couple maintenance income excess 2 2. Partnered (partner getting neither pension nor benefit) maintenance income excess 2 3. Partnered (partner getting benefit) maintenance income excess 2 4. Partnered (partner getting pension) neither person nor partner has additional amounts for dependent children maintenance income excess 2 5. Partnered (partner getting pension) person has additional amounts for dependent children DC excess + remaining excess 2 6. Partnered (partner getting pension) partner has additional amounts for dependent children remaining excess 2 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 "additional amounts for dependent children" see subsection 23 (1). Note 3: "social security pension" includes a sheltered employment or rehabilitation allowance. Note 4: for "maintenance income excess" see point 1064-F12 below. Note 5: for "DC excess" and "remaining excess" see point 1064-F13 below. Note 6: for background information on the special treatment given to people covered by items 5 and 6 of Table F-2 see points 1064-A4 and 1064-A5 above. Maintenance income excess 1064-F12. A person's maintenance income excess is the person's maintenance income less the person's maintenance free area limit. 1064-F13. For the purposes of Table F-2, if a member of a couple (in this point called the "child DC partner") has additional amounts for dependent children: (a) the additional amounts for dependent children total (the "DC total") is the sum of amounts for dependent children; and (b) if the DC partner's ordinary income excess (see point 1064-E11 above) plus the DC partner's maintenance income excess (see point 1064-F12 above) are less than or equal to the DC total: (i) the DC excess is the DC partner's maintenance income excess; and (ii) the remaining excess is nil; and (c) if: (i) the DC partner's ordinary income excess (see point 1064-E11 above) plus the DC F12 above) is greater than the DC total; and (ii) the notional DC partner's ordinary income excess is greater than or equal to the DC total; then: (iii) the DC excess is nil; and (iv) the remaining excess is the DC partner's maintenance income excess; and (d) if: (i) the DC partner's ordinary income excess (see point 1064-E11 above) plus the DC partner's maintenanceincome excess (see point 1064-F12 above) is greater than the DC total; and (ii) the DC partner's ordinary income excess is less than the DC total; then: (iii) the DC excess is the DC total less the DC partner's ordinary income excess; and (iv) the remaining excess is the DC partner's maintenance income excess less the DC excess. Note: for "additional amount for dependent children" see subsection 23 (1). MODULE G - ASSETS TEST Effect of assets on maximum payment rate 1064-G1. This is how to work out the effect of a person's assets on the person's maximum payment rate: Method statement Step 1. Work out the value of the person's assets. Note 1: for the treatment of the assets of members of a couple see point 1064-G2. Note 2: for the assets that are to be disregarded in valuing a person's assets see section 1118. Note 3: for the valuation of an asset that is subject section 1121. Step 2. Work out the person's assets value limit (see point 1064-G3 below). Note: a person's assets value limit is the maximum value of assets the person can have without affecting the person's pension rate. Step 3. Work out whether the value of the person's assets exceeds the person's assets value limit. Step 4. If the value of the person's assets does not exceed the person's assets value limit, the person's assets excess is nil. Step 5. If the value of the person's assets exceeds the person's assets value limit, the person's assets excess is the value of the person's assets less the person's assets value limit. Step 6. Use the person's assets excess to work out the person's reduction for assets using points 1064-G4 to 1064-G7 below. Note 1: see point 1064-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 pensions loans scheme (sections 1133 to 1144). 1064-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 1064-G3. A person's assets value limit is worked out using TableG-1. Work out the person's family situation and home ownership situation. The assets value limit is the corresponding amount in column 3. TABLE G-1 ASSETS VALUE LIMIT column column 2 column 3 item person's family situation column 3A either person or partner homeowner column 3B neither person nor partner homeowner 1. Not member of a couple $103,500 $177,500 2. Partnered (partner getting neither pension nor benefit) $73,750 $110,750 3. Partnered (partner getting pension or benefit) $73,750 $110,750 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 and respite care 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 1064-G4. A person's reduction for assets is worked out using Table G-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 TABLE G-2 REDUCTION FOR ASSETS column 1 column 2 column 3 item person's family situation reduction 1. Not member of a couple (assets excess) X 26 250 2. Partnered (partner getting neither pension nor benefit) (assets excess) X 26 250 3. Partnered (partner getting benefit) (assets excess) X 26 250 4. Partnered (partner getting pension) neither person nor partner has additional amounts for dependent children (assets excess) X 26 250 5. Partnered (partner getting pension) person has additional amounts for dependent children (DC excess) X 52 + (remaining excess) X 26 250 250 6. Partnered (partner getting pension) partner has additional amounts for dependent children (remaining excess) X 26 250 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 "additional amount for dependent children" see subsection 23 (1). Note 3: "social security pension" includes a sheltered employment or rehabilitation allowance. Note 4: for "assets excess" see point 1064-G5 below. Note 5: for "DC excess" and "remaining excess" see point 1064-G6 below. Note 6: for background information on the special treatment given to people covered by items 5 and 6 of Table G-2 see points 1064-A4 and 1064-A5 above. Assets excess 1064-G5. A person's assets excess is the value of the person's assets less the person's assets value limit. Working out DC excess and remaining excess 1064-G6. For the purposes of Table G-2, if a member of a pensioner couple (in this point called the "DC partner") has additional amounts for dependent children: (a) the additional amounts for dependent children total (the "DC total") is the sum of the amounts that the DC partner has by way of additional amounts for dependent children; and (b) the assets equivalent of the DC total (the "DC assets total") is: DC total X 250 ; and 52 (c) if the DC partner's assets excess (see point 1064-G5 above) is less than or equal to the DC assets total: (i) the DC excess is the assets excess; and (ii) the remaining excess is nil; and (d) if the DC partner's assets excess (see point 1064-G5 above) is greater than the DC assets total: (i) the DC excess is the DC assets total; and (ii) the remaining excess is the assets excess less the DC assets total. Note: for "additional amount for dependent children "see subsection 23 (1). 1064-G7. In calculating a person's assets excess under point 1064-G5 disregard any part of the excess that is not a multiple of $250. MODULE H - REMOTE AREA ALLOWANCE Remote area allowance 1064-H1. An amount by way of remote area allowance is to be added to a person's rate of pension if: (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 1064-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 pension or benefit increase child of the person. TABLE H REMOTE AREA ALLOWANCE column 1 Column 2 Column 3 Column 4 Column 5 Column 6 item person's family situation allowance per year basic allowance per fortnight allowance per year additional allowance per fortnight 1. Not member of a couple $364.00 $14.00 $182.00 $7.00 2. Partnered - partner receiving remote area allowance $312.00 $12.00 $182.00 $7.00 3. Partnered - partner not receiving remote area allowance $364.00 $14.00 $182.00 $7.00 Note 1: for "member of a couple" and "partnered" see section 4. Note 2: for "dependent child" see section 5. Note 3: for "pension increase child" see subsection 5 (15). Note 4: for "benefit increase child" see subsection 5 (16). Sole parent pensioner - member of illness separated couple 1064-H3. For the purposes of Table H in point 1064-H2, a person who is qualified for sole parent pension because of subparagraph 249 (1) (a) (iv) (illness separation) is to be treated as not being a member of a couple. Dependent children must be physically present in Australia 1064-H4. Additional allowance is not payable for a pension or benefit increase child unless the child is physically present in Australia. Additional remote area allowance for dependent children not available to both members of a pensioner couple 1064-H5. Additional allowance is not to be included in a person's pension rate for a pension increase child if: (a) the person's partner's pension rate includes additional allowance for the child; and (b) the person's partner has a dependent child add-on for the child. MODULE J - INCENTIVE ALLOWANCE Qualifications for incentive allowance 1064-J1. A person is entitled to incentive allowance if the person: (a) is receiving an invalid pension; and (b) is undertaking: (i) training at an activity therapy centre or an adult training centre; or (ii) independent living training. Note 1: for "activity therapy centre", "adult training centre" and "independent living training" see section 18. Note 2: where this Module is used to calculate the rate of invalid pension that would be payable to a person who is qualified for a sheltered employment allowance, an amount for incentive allowance is added to the person's rate regardless of this point - see section 423. 1064-J2. A child is a pension increase child in relation to a person, for the purposes of this module, if the child is taken into account so as to increase: (a) the person's maximum basic rate of pension; or (b) if the person is a member of a couple - the person's partner's rate of: (i) social security pension other than sheltered employment allowance; or (ii) service pension under paragraph 47 (3) (a), (b) or (c) of the VEA. Rate of incentive allowance 1064-J3. A person's incentive allowance rate increase children (if any) the person has. Work out which situation in Table J applies to the person. The rate of incentive allowance is the corresponding amount in column 3. TABLE J RATE OF INCENTIVE ALLOWANCE Column 1 Column 2 Column 3 Column 4 rate per rate per year fortnight Item Person's situation 1. No pension increase children $1,560 $60 2. 1 or 2 pension increase children $1,820 $70 3. 3 or more pension increase children $2,080 $80 Note: for "pension increase child" see point 1064-J2.