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SOCIAL SECURITY ACT 1991 No. 46, 1991 - SECT 1066
Rate of sole parent pension, widowed person allowance and widow B pension
1066. (1) The rate of:
(a) sole parent pension; and
(b) widowed person 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.
(2) Subsection (1) does not apply to a sole parent pension if the recipient is
qualified for the pension under subparagraph 249 (1) (a) (iv) (illness
separation).
(3) 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
that other person; and
(b) the other person is of the opposite sex; and
(c) that other person is under the age of consent applicable in the State
or Territory in which the person is 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: although there is
only 1 maximum basic rate specified in point 1066-B1 of Pension Rate
Calculator C, the ordinary income test (Module E), maintenance income
test (Module F) 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 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 or
maintained 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 MODULE F
below to work out the 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 the maximum payment rate: the 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). 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 (sections 1133 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 1207 (maximum basic rate first, then rent assistance
and finally child amounts). 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)).
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 Maximum basic rate
1066-B1. A person's maximum basic rate is $7,584.20 per year ($291.70 per
fortnight). Note: the maximum basic rate is indexed 6 monthly in line with CPI
increases (see sections 1191 to 1194).
MODULE C - ADDITIONAL AMOUNTS FOR DEPENDENT OR MAINTAINED CHILDREN Additional
amounts for children
1066-C1. This is how to work out the amount per year to be added to a person's
maximum basic rate for dependent or maintained children.
Method statement Step 1. Work out the amount of the child add-on (if any) for
each dependent or maintained child of the person using points 1066-C2 to
1066-C3. Step 2. Work out the amount per year of the person's
guardian allowance using point 1066-C5. 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: a
child add-on may not apply to a dependent or maintained child if the child is
a prescribed student child (see point 1066-C3). Child add-ons
1066-C2. If a person has a dependent or maintained child, there is, subject to
point 1066-C3, a 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 OR MAINTAINED CHILD column 1
column 2
column 3
column 4 item
child's age
rate per year
rate per 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 the combined family
allowance and 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 additional pension amounts for children
covered by 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. No add-on for prescribed student children
1066-C3. Once a dependent or maintained 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", "dependent child" and "maintained
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 point 1066-C4; and
(b) will attract additional free area under point 1066-E4 for the purposes
of the ordinary income test. Guardian allowance
1066-C4. A person who has a dependent or maintained child or dependent or
maintained children is to have a single amount per year by way of guardian
allowance. Rate of guardian allowance
1066-C5. 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 Qualification for rent assistance
1066-D1. An additional amount to help cover the cost of
(a) the person is not an ineligible homeowner; and
(b) the person pays, or is liable to pay, rent (other than Government
rent); and
(c) the rent is payable at a rate of more than $1,040 per year ($40 per
fortnight); and
(d) the person is in Australia.
Note: for "rent", "Government rent" and "ineligible homeowner" see section 13.
Pension increase child
1066-D2. A young person is a pension increase child in relation to another
person (in this point called the "adult") if the young person is taken into
account so as to increase the adult's maximum payment rate under Module C.
Factors affecting rate of rent assistance
1066-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) in relation to the
person. Rate of rent assistance
1066-D4. The rate of rent assistance per fortnight Calculate Rate A for the
person using the formula in column 1. This will be the person's rate of rent
assistance but only up to the person's maximum rent assistance rate. The
person's maximum rent assistance rate is Rate B for the person worked out
usingcolumn 2 of the Table.
TABLE D
RATE OF RENT ASSISTANCE column 1
column 2 Rate A
Rate B
column 2A
column 2B
column 2C
No pension increase children
1 or 2 pension increase children
3 or more pension increase children Annual rent - $1,040
2
$1,560
$1,820
$2,080
Note 1: for "pension increase child" see point 1066-D2. Note 2: the Rate B
amounts are indexed 6 monthly in line with CPI increases (see sections 1191 to
1194). Annual rent
1066-D5. Annual rent is the annual rent paid or payable by the person.
MODULE E - ORDINARY INCOME TEST 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:
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 1066-E2. Step 2. Work out the person's ordinary free
area limit (see points 1066-E4 to 1066-E7 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 income 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 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 1066-E8 to 1066-E9 below. 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:
. 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
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. Ordinary free area
limit
1066-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
1066-E4. A person's ordinary free area limit is worked out using Table E. The
ordinary free area limit is the amount in column 1 plus an additional amount
in column 3 for each dependent or maintained child of the person. TABLE E
ORDINARY FREE AREA LIMIT column 1 basic free area per year
column 2
basic free area per fortnight
column 3
additional free area per year
column 4
additional free area per fortnight
$2,080 $80 $624 $24
Note 1: for "dependent child" see section 5. Note 2: Table E applies to
members of illness separated couples. Note 3: 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 or maintained children
1066-E5. The additional free area for a dependent or maintained 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 the AUSTUDY scheme; or
(e) under the Assistance for Isolated Children Scheme; or
(f) that are similar to family allowance and that prevent a family
allowance from being paid under section 837.
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
(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 EXAMPLE 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 free area limit per year is therefore:
$2,080 + ($624 - $480) + $624 (for Susan) = $2,848. Reduction for
ordinary income
1066-E8. A person's reduction for ordinary income is:
ordinary income excess
2 Ordinary income excess
1066-E9. A person's ordinary income excess is the person's ordinary free area
limit.
MODULE F - MAINTENANCE INCOME TEST Effect of maintenance income on maximum
payment rate
1066-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 1066-F2 and 1066-F3.
Note 2: "special maintenance income" (see
subsection 10 (1)) can in some 1066-F5. Step 2. Work out the person's
maintenance income free area limit (see points 1066-F8 to 1066-F9 below).
Note: a person's maintenance income free area is the maximum amount of
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
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 free area.
Step 6. Use the person's maintenance income excess to work out the person's
reduction for maintenance income using points 1066- F10 to 1066-F11 below.
Note 1: see point 1066-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 for family home (section 1117). Dependent child
1066-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
1066-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.
1066-F3. Point 1066-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
1066-F4. 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: for "special maintenance income" see subsection 10 (1).
1066-F5. The ceiling applicable to a person is the maintenance income free
area limit plus:
person's maximum payment rate
2 Special maintenance income not disregarded where child support available
1066-F6. No amount is to be disregarded under point 1066-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.
1066-F7. No amount is to be disregarded under point 1066-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
1066-F8. A person's maintenance income free area limit is worked out using
Table F. Work out which family situation in Table F 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 or
maintained child after the first.
TABLE F
MAINTENANCE INCOME FREE AREA LIMIT column 1
column 2
column 3
column 4
column 5
column 6
item< person's family situation
basic free area per year
basic free area per fortnight
additional free area per year
additional free
area per fortnight 1. Not member of a couple
$780.00
$30.00
$260.00
$10.00 2. Partnered (partner getting neither pension nor benefit)
$780.00
$30.00
$260.00
$10.00 3. Partnered (partner getting pension or benefit) - both the person and
the partner are receiving maintenance income
$780.00
$30.00
$130.00
$5.00 4. Partnered (partner getting pension or benefit) - either the person or
the partner (but not both) are receiving maintenance income
$390.00
$15.00
$130.00
$5.00
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 apply to members of an illness separated couple.
1066-F9. In determining whether or not item 3 or 4 of Table F applies to a
person, point 1066-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
1066-F10. A person's reduction for maintenance income is:
maintenance income excess
2 Maintenance income excess
1066-F11. A person's maintenance income excess is the person's maintenance
income less the person's maintenance free area limit.
MODULE G - ASSETS TEST 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:
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
1066-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 section 1121. Step 2.
Work out the person's assets value limit (see point 1066-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 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 1066-G4 to 1066-G6 below. 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 pensions
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.
TABLE G
ASSETS VALUE LIMIT column 1
column 2
column 3
assets value limit 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 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
1066-G4. A person's reduction for assets is:
assets excess X 26
250 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 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
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 5 for each pension or benefit increase child of the person.
TABLE H
REMOTE AREA ALLOWANCE column 1 item
column 2
persons's family situation
column 3
basic allowance per year
column 4
basic allowance per fortnight
column 5
additional allowance per year
column 6
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). Australia
1066-H3. 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
1066-H4. Additional allowance for a pension increase child is not to be
included in a person's pension rate if:
(a) the person's partner's pension rate includes additional allowance for
the child; and
(b) the person's partner has a child add-on for the child.
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