Rate of age and disability support pensions and carer payment (people who are not blind)
1064 Rate of age and disability support pensions and carer payment (people who are not blind)
The rate of:
age pension; and
disability support pension of a person who has turned 21, or of a person who has not turned 21 and has one or more dependent children; and
carer payment;
is, subject to subsection (2), to be calculated in accordance with the Rate Calculator at the end of this section.
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.
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 a self‑employment program (see Part 3.15).
For dependent child see section 5.
Subsection (1) does not apply to a person’s age or disability support pension if the person is permanently blind.
The rate for an age pension or disability support pension payable to a person who is permanently blind is dealt with in section 1065.
If:
a person has a relationship with another person, whether of the same sex or a different sex (other person); and
the relationship between them meets the condition in subparagraph 4(2)(b)(iii) (de facto relationship); and
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.
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
If:
an armed services widow is receiving 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; and
one of the following is payable to the widow:
an age pension;
a disability support pension;
a carer payment;
the widow’s pension rate is not to exceed:
if:
the widow has been receiving the payment referred to in paragraph (a) continuously since before 1 November 1986; and
immediately before 1 November 1986, the widow was receiving a payment referred to in paragraph (b) at a rate exceeding $3,247.40; and
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
in any other case—$3,247.40.
For armed services widow see subsection 4(1).
Rate limited for armed services widower
If:
an armed services widower is receiving 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; and
one of the following is payable to the widower:
an age pension;
a disability support pension;
a carer payment;
the rate of pension payable to the widower is not to exceed $3,247.40.
For armed services widower see subsection 4(1).
If:
an armed services widow or an armed services widower is receiving the weekly amount mentioned in paragraph 234(1)(b) of the MRCA (including a reduced weekly amount because of a choice under section 236 of the MRCA) or has received a lump sum mentioned in subsection 236(5) of the MRCA; and
one of the following is payable to the widow or widower:
an age pension;
a disability support pension;
a carer payment;
the rate of pension payable to the widow or widower is not to exceed $3,247.40.
For armed services widow and armed services widower 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 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).
Method statement
Step 1. Work out the person’s maximum basic rate using MODULE B below.
Step 1A. Work out the amount of pension supplement using Module BA below.
Step 1B. Work out the energy supplement (if any) using Module C below.
Step 3. Work out the amount per year (if any) for rent assistance in accordance with paragraph 1070A(b).
Step 4. Add up the amounts obtained in Steps 1, 1A, 1B 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 income reduction.
Module F contains provisions that may apply to working out the ordinary income of a person, and the ordinary income of a partner of the person, for the purposes of disability support pension.
Step 8. Take the 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 lower of the 2 rates, or the income reduced rate if the rates are equal, is the provisional annual payment rate.
Step 12. The rate of pension is the amount obtained by:
subtracting from the provisional annual payment rate any special employment advance deduction (see Part 3.16B); and
if there is any amount remaining, subtracting from that amount any advance payment deduction (see Part 3.16A); and
adding any amount payable by way of remote area allowance (see Module H).
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).
Section 1210 deals with the application of income and assets test reductions.
The rate calculation for a member of a couple is affected by the operation of points 1064‑A2 and 1064‑A3.
In some circumstances a person may also be qualified for a pharmaceutical allowance under Part 2.22.
A person’s rate may also be reduced because the person or the person’s partner receives compensation (see section 1173) or because the person or the person’s partner is receiving a foreign pension (see scheduled international social security agreements at section 1208).
Clause 146 of Schedule 1A may affect the provisional annual payment rate in step 11.
Members of a couple
1064‑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 1064‑E2 and 1064‑G2 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
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 | |||
|---|---|---|---|
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate per year | Column 4 Rate per fortnight |
1. | Not member of couple | $8,114.60 | $312.10 |
2. | Partnered | $6,767.80 | $260.30 |
3. | Member of illness separated couple | $8,114.60 | $312.10 |
4. | Member of respite care couple | $8,114.60 | $312.10 |
5. | Partnered (partner in gaol) | $8,114.60 | $312.10 |
For member of couple, partnered, illness separated couple, respite care couple and partnered (partner in gaol) see section 4.
The maximum basic rates are adjusted 6 monthly: see sections 1191 to 1198A.
Module BA—Pension supplement
Pension supplement
1064‑BA1 A pension supplement amount is to be added to the person’s maximum basic rate.
Residents in Australia etc.
1064‑BA2 If the person is residing in Australia and:
is in Australia; or
is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks;
the person’s pension supplement amount is:
if an election by the person under subsection 1061VA(1) is in force—the amount worked out under point 1064‑BA4; and
otherwise—the amount worked out under point 1064‑BA3.
Residents in Australia etc.—no election in force
1064‑BA3 The person’s pension supplement amount is the amount worked out by:
applying the applicable percentage in the following table to the combined couple rate of pension supplement; and
if:
the person is not partnered; and
the amount resulting from paragraph (a) is not a multiple of $2.60;
rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is not a multiple of $2.60 but is a multiple of $1.30).
Item | Person’s family situation | Use this % |
|---|---|---|
1 | Not member of couple | 66.33% |
2 | Partnered | 50% |
3 | Member of illness separated couple | 66.33% |
4 | Member of respite care couple | 66.33% |
5 | Partnered (partner in gaol) | 66.33% |
For combined couple rate of pension supplement, see subsection 20A(1).
Residents in Australia etc.—election in force
1064‑BA4 The person’s pension supplement amount is the amount worked out as follows:
work out the amount for the person under point 1064‑BA3 as if the election were not in force;
from that amount, subtract the person’s minimum pension supplement amount.
Persons absent from Australia for more than 6 weeks
1064‑BA5 If the person is not covered by point 1064‑BA2, the person’s pension supplement amount is the person’s pension supplement basic amount.
Module C—Energy supplement
1064‑C1 An energy supplement is to be added to the person’s maximum basic rate if the person is residing in Australia and:
is in Australia; or
is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.
Section 918 may affect the addition of the energy supplement.
1064‑C2 However, this Module does not apply if quarterly energy supplement is payable to the person.
1064‑C3 The person’s energy supplement is the amount worked out using the following table:
Energy supplement | ||
|---|---|---|
Item | Person’s family situation | Amount of energy supplement |
1 | Not a member of a couple | $366.60 |
2 | Partnered | $275.60 |
3 | Member of an illness separated couple | $366.60 |
4 | Member of a respite care couple | $366.60 |
5 | Partnered (partner in gaol) | $366.60 |
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.
For the treatment of the ordinary income of members of a couple see point 1064‑E2.
Module F contains provisions that may apply to working out the ordinary income of a person, and the ordinary income of a partner of the person, for the purposes of disability support pension.
Step 2. Work out the person’s ordinary income free area (see point 1064‑E4 below).
A person’s ordinary income free area is the amount of ordinary income that the person can have without any deduction being made from the person’s maximum payment 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.
See point 1064‑A1 (Steps 5 to 8) for the significance of the person’s reduction for ordinary income.
The application of the ordinary income test is affected by provisions concerning:
- the general concept of ordinary income and the treatment of certain income amounts (Division 1 of Part 3.10);
- the work bonus (section 1073AA);
- business income (sections 1074 and 1075);
- income from financial assets (including income streams (short term) and certain income streams (long term)) (Division 1B of Part 3.10);
- income from income streams not covered by Division 1B of Part 3.10 (Division 1C of Part 3.10);
- disposal of income (sections 1106 to 1111).
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.
For the purposes of working out a person’s disability support pension rate under this Rate Calculator, Module F applies to working out the ordinary incomes of both members of the couple.
Payment of arrears of periodic compensation payments
1064‑E3 If:
at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving age pension, disability support pension or carer pension; and
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.
For periodic payments period see section 17.
How to calculate a person’s ordinary income free area
1064‑E4 A person’s ordinary income free area is worked out using Table E‑1. Work out which family situation in Table E‑1 applies to the person. The ordinary income free area is the corresponding amount in column 3.
Table E‑1—Ordinary free area limits | |||
|---|---|---|---|
Column 1 Item | Column 2 Category of person | Column 3 Basic free area per year | Column 4 Basic free area per fortnight |
1. | Not member of a couple | $2,080 | $80 |
2. | Partnered (partner getting neither pension nor benefit) | $1,820 | $70 |
3. | Partnered (partner getting benefit) | $1,820 | $70 |
4. | Partnered (partner getting pension) | $1,820 | $70 |
For member of a couple, partnered (partner getting neither pension nor benefit), partnered (partner getting benefit) and partnered (partner getting pension) see section 4.
Items 2, 3 and 4 of Table E‑1 apply to members of illness separated and respite care couples.
The basic free area limits are indexed annually in line with CPI increases (see sections 1191 to 1194).
Pension reduction for ordinary income in excess of ordinary income free area
1064‑E10 A person’s reduction for ordinary income is:
Start formula Ordinary income excess times 0.5 end formula
Ordinary income excess
1064‑E11 A person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.
Module F—Ordinary income for the purposes of disability support pension
Application of this Module
1064‑F1 This Module applies only for the purposes of working out the rate of disability support pension payable to a person. It so applies to that person and, if the person is a member of a couple, to the person’s partner.
Lump sum payments arising from termination of employment
1064‑F2 Subject to points 1064‑F4 to 1064‑F14 (inclusive), if:
a person’s employment has been terminated; and
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.
Certain leave payments taken to be ordinary income—employment continuing
1064‑F4 If:
a person is employed; and
the person is on leave for a period; and
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
1064‑F5 If:
a person’s employment has been terminated; and
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
1064‑F6 If:
a person is covered by point 1064‑F5; and
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
1064‑F7 If a person is covered by point 1064‑F4, 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
1064‑F8 If a person is covered by point 1064‑F5, the income maintenance period starts, subject to point 1064‑F9, on the day on which the person is paid the termination payment.
Commencement of income maintenance period where there is a second termination payment
1064‑F9 If:
a person who is covered by point 1064‑F5 is subject to an income maintenance period (the first period); and
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
1064‑F10 If:
a person receives a leave payment or termination payment; and
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:
dividing the amount received by the number of days in the period to which the payment relates (the daily rate); and
multiplying the daily rate by the number of days in the payment fortnight that are also in the period.
1064‑F11 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.
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).
For unavoidable or reasonable expenditure see subsection 19C(4).
If an income maintenance period applies to a person, then, during that period:
the pension claimed may not be payable to the person; or
the amount of the pension payable to the person may be reduced.
When a person receives a leave payment or a termination payment
1064‑F12 For the purposes of points 1064‑F4 to 1064‑F11 (inclusive), a person (the first person) is taken to receive a leave payment or termination payment if:
the payment is made to another person:
at the direction of the first person or a court; or
on behalf of the first person; or
for the benefit of the first person; or
the first person waives or assigns his or her right to receive the payment.
Single payment in respect of different kinds of termination payments
1064‑F13 If a person who is covered by point 1064‑F5 receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1064‑F4 to 1064‑F12 (inclusive):
each part of the payment that is in respect of a different kind of termination payment is taken to be a separate payment; and
the income maintenance period in respect of the single payment is worked out by adding the periods to which the separate payments relate.
Definitions
1064‑F14 In this Module:
leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave, but does not include an instalment of parental leave pay.
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:
if the payment is a leave payment—the leave period to which the payment relates; or
if the payment is a termination payment and is calculated as an amount equivalent to an amount of ordinary income that the person would (but for the termination) have received from the employment that was terminated—the period for which the person would have received that amount of ordinary income; or
if the payment is a termination 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 termination payment if:
the person’s employment had continued; and
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 includes a payment in lieu of notice.
termination payment includes:
a redundancy payment; and
a leave payment relating to a person’s employment that has been terminated; and
any other payment that is connected with the termination of a person’s employment.
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.
For the treatment of the assets of members of a couple see point 1064‑G2.
For the assets that are to be disregarded in valuing a person’s assets see section 1118.
For the valuation of an asset that is subject to a charge or encumbrance see section 1121.
Step 2. Work out the person’s assets value limit (see point 1064‑G3 below).
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.
See point 1064‑A1 (steps 9 and 10) for the significance of the person’s reduction for assets.
The application of the assets test is affected by provisions concerning disposal of assets (sections 1123 to 1128), retirement villages (sections 1145 to 1157) and financial hardship (sections 1129 and 1130).
Value of assets of members of couples
1064‑G2 For the purposes of this Module:
the value of the assets of a member of a couple is to be taken to be 50% of the sum of:
the value of the person’s assets; and
the value of the person’s partner’s assets; and
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:
the value of the person’s assets of that kind; and
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 Table G‑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 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 | $250,000 | $450,000 |
2. | Partnered (partner getting neither pension nor benefit) | $187,500 | $287,500 |
3. | Partnered (partner getting pension or benefit) | $187,500 | $287,500 |
For member of a couple, partnered (partner getting neither pension nor benefit) and partnered (partner getting pension or benefit) see section 4.
For homeowner see section 11.
Items 2 and 3 apply to members of illness separated and respite care couples.
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 in column 3.
Table G‑2—Reduction for assets | ||
|---|---|---|
Column 1 Item | Column 2 Person’s family situation | Column 3 Reduction |
1. | Not member of a couple | Start formula start fraction Assets excess times 19.5 over 250 end fraction end formula |
2. | Partnered (partner getting neither pension nor benefit) | Start formula start fraction Assets excess times 19.5 over 250 end fraction end formula |
3. | Partner (partner getting pension or benefit) | Start formula start fraction Assets excess times 19.5 over 250 end fraction end formula |
For member of a couple, partnered (partner getting neither pension nor benefit), partnered (partner getting benefit) and partnered (partner getting pension) see section 4.
For assets excess see point 1064‑G5 below.
Assets excess
1064‑G5 A person’s assets excess is the value of the person’s assets less the person’s assets value limit.
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:
either:
the person’s rate of pension apart from this point is greater than nil; or
apart from this point, the person’s rate of pension would be nil merely because an election by the person under subsection 1061VA(1) is in force; and
the person’s usual place of residence is situated in the remote area; and
the person is physically present in the remote area.
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 FTB child, and each regular care child, of the person.
Table H—Remote area allowance | |||||
|---|---|---|---|---|---|
Column 1 Item | Column 2 Person’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 couple | $473.20 | $18.20 | $189.80 | $7.30 |
2. | Partnered | $405.60 | $15.60 | $189.80 | $7.30 |
3. | Member of illness separated couple | $473.20 | $18.20 | $189.80 | $7.30 |
4. | Member of respite care couple | $473.20 | $18.20 | $189.80 | $7.30 |
5. | Partnered (partner in gaol) | $473.20 | $18.20 | $189.80 | $7.30 |
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
1064‑H5 If:
a person who is a member of a couple is qualified for an amount by way of remote area allowance; and
the person’s partner is not receiving a pension or benefit; and
the person’s partner has an FTB child or a regular care child;
the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.
Special rule where partner has an FTB or regular care child but is not receiving additional allowance for the child
1064‑H6 If:
a person who is a member of a couple is qualified for an amount by way of remote area allowance; and
the person’s partner has an FTB child or a regular care child; and
the person’s partner is not receiving additional allowance for the child;
the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.
Special rule dealing with the death of an FTB or regular care child
1064‑H7 If an FTB child, or a regular care child, of a person dies, this Module has effect, for a period of 14 weeks after the death of the child, as if the child had not died.
This point does not prevent this Module having the effect it would have had if the child would otherwise have ceased to be an FTB child, or a regular care child, during that 14 weeks.
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