Rate Calculator
Part 2 Rate Calculator
Module A—Overall rate calculation process
Rate to be an annual rate
SCH6‑A1(1) The rate of service pension, income support supplement or veteran payment is an annual rate (fortnightly amounts are provided for information only).
Method statement 1 (service pension, not blind, not war widow/war widower—pensioner)
The rate of service pension for a person who:
is not permanently blind; and
is not a war widow/war widower—pensioner;
is worked out in accordance with Method statement 1.
For war widow/war widower—pensioner see subsection 5Q(1).
Method statement 1
Step 1. Work out the person’s maximum basic rate using MODULE B below.
Step 1A. Work out the amount of pension supplement (if any) using Module BA below.
Step 1B. Work out the amount of energy supplement (if any) using Module BB below.
Step 2. Work out the amount per year (if any) by way of rent assistance using MODULE C below.
Step 4. Add up the amounts obtained in Steps 1, 1A, 1B and 2: the result is called the maximum payment rate.
Section 65A may affect whether the amount obtained in step 1B is added.
Step 5. Apply the ordinary/adjusted income test using MODULE E below to work out the reduction for ordinary/adjusted income.
Step 6. Take the reduction for ordinary/adjusted income away from the maximum payment rate: the result is called the income reduced rate.
Step 7. Apply the assets test using MODULE F below to work out the reduction for assets.
Step 8. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.
Step 9. 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 payment rate.
Step 10. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 11. Add any amount obtained in Step 10 to the person’s provisional payment rate (see Step 9). The result is the person’s rate of service pension.
For ordinary/adjusted income see point SCH6‑E1.
If a person’s assets reduced rate is less than the person’s ordinary/adjusted income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 52Y and 52Z).
If a person’s rate is reduced under step 9, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by clause 4 of Part 1.
Note 4A: Clause 30 of Schedule 5 may affect the provisional payment rate in step 9.
The rate calculation for a member of a couple is affected by the operation of point SCH6‑A2.
The amount of a fortnightly instalment of service pension will be rounded to the nearest cent (see subsection 58A(5)).
For the minimum amount of a fortnightly instalment of service pension, see subsection 58A(9).
An amount of remote area allowance is to be added under Step 11 only if the person’s rate of service pension is greater than nil or, apart from section 36A, 37A or 38A, the person’s rate of service pension would be nil.
The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 2 (service pension, blind, not war widow/war widower—pensioner)
The rate of service pension for a person who:
is permanently blind; and
is not a war widow/war widower—pensioner;
is worked out in accordance with Method statement 2.
For war widow/war widower—pensioner see subsection 5Q(1).
Method statement 2
Step 1. Work out what would be the person’s rate of service pension if Method statement 1 applied to the person: the result is called the notional income/assets tested rate.
This is the only situation in which a blind person’s pension can be made subject to an income test or assets test (see point SCH6‑A3).
Step 2. Work out the person’s maximum basic rate using MODULE B below.
Step 2A. Work out the amount of pension supplement (if any) using Module BA below.
Step 2B. Work out the amount of energy supplement (if any) using Module BB below.
Step 4. Add up the amounts obtained in Steps 2, 2A and 2B: the result is called the maximum payment rate.
Section 65A may affect whether the amount obtained in step 2B is added.
Step 5. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 6. Add:
the maximum payment rate; and
any amount obtained under Step 5.
The result is called the non‑income/assets tested rate.
Step 7. Compare the notional income/assets tested rate and the non‑income/assets tested rate: whichever is the greater is the person’s rate of service pension.
The amount of a fortnightly instalment of service pension will be rounded to the nearest cent (see subsection 58A(5)).
For the minimum amount of a fortnightly instalment of service pension, see subsection 58A(9).
The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 3 (service pension, not blind, war widow/war widower—pensioner)
The rate of service pension for a person who:
is not permanently blind; and
is a war widow/war widower—pensioner;
is worked out in accordance with Method statement 3.
For war widow/war widower—pensioner see subsection 5Q(1).
Method statement 3
Step 1. Work out what would be the person’s rate of service pension if Method statement 1, except step 1B of that method statement, applied to the person: the result is called the provisional rate.
Step 2. Work out the person’s ceiling rate in accordance with points SCH6‑A4 to SCH6‑A9.
Step 2A. Work out the amount per year (if any) for rent assistance using MODULE C below.
Step 4. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 5. Add:
the ceiling rate; and
any amount obtained under step 2A; and
any amount obtained under step 4;
and, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, subtract the person’s minimum pension supplement amount. The result is the revised rate.
Step 6. Compare the provisional rate and the revised rate: the person’s rate of service pension is:
the provisional rate if it is lower than the revised rate; or
the revised rate if it is lower than or equal to the provisional rate.
The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 4 (service pension, blind, war widow/war widower—pensioner)
The rate of service pension for a person who:
is permanently blind; and
is a war widow/war widower—pensioner;
is worked out in accordance with Method statement 4.
For war widow/war widower—pensioner see subsection 5Q(1).
Method statement 4
Step 1. Work out the person’s ceiling rate in accordance with points SCH6‑A4 to SCH6‑A9.
Step 1A. Work out the amount per year (if any) for rent assistance using MODULE C below.
Step 3. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 4. Add:
the ceiling rate; and
any amount obtained under step 1A; and
any amount obtained under step 3;
and, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, subtract the person’s minimum pension supplement amount. The result is the person’s rate of service pension.
The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 5 (income support supplement, not blind)
The rate of income support supplement for a person who is not permanently blind is worked out in accordance with Method statement 5.
Method statement 5
Step 1. Work out the amount of the person’s maximum basic rate using MODULE B below.
Step 1A. Work out the amount of pension supplement (if any) using Module BA below.
Step 2. Work out the amount per year (if any) for rent assistance using MODULE C below.
Step 4. Add up the amounts obtained in Steps 1, 1A and 2: the result is called the maximum payment rate.
Step 5. Apply the ordinary/adjusted income test using MODULE E below to work out the reduction for ordinary/adjusted income.
Step 6. Take the reduction for ordinary/adjusted income away from the maximum payment rate: the result is called the income reduced rate.
Step 7. Apply the assets test using MODULE F below to work out the reduction for assets.
Step 8. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.
Step 9. Work out the person’s ceiling rate in accordance with points SCH6‑A4 to SCH6‑A9.
Step 9A. Add:
the ceiling rate; and
any amount obtained under step 2;
and, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, subtract the person’s minimum pension supplement amount. The result is the increased rate.
Step 10. Compare the income reduced rate (see Step 6), the assets reduced rate (see Step 8) and the increased rate (see step 9A): the person’s provisional payment rate is equal to:
whichever is the lowest of those rates; or
if 2 of those rates are the same and the third one is higher—the lower rate; or
if the 3 rates are the same—the income reduced rate.
Step 11. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 12. Add any amount obtained in Step 11 to the person’s provisional payment rate (see Step 10): the result is the person’s rate of income support supplement.
For ordinary/adjusted income see point SCH6‑E1.
If a person’s assets reduced rate is less than the person’s adjusted income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 52Y and 52Z).
If a person’s rate is reduced under Step 10, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by clause 4 of Part 1.
Note 4A: Clause 30 of Schedule 5 may affect the provisional payment rate in step 10.
The rate calculation for a member of a couple is affected by the operation of point SCH6‑A2.
The amount of a fortnightly instalment of income support supplement will be rounded to the nearest cent (see subsection 58A(5)).
For the minimum amount of a fortnightly instalment of income support supplement, see subsection 58A(9).
The amount of a fortnightly instalment of income support supplement may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 6 (income support supplement, blind)
The rate of income support supplement for a permanently blind person is worked out in accordance with Method statement 6.
Method statement 6
Step 1. Work out the person’s ceiling rate in accordance with points SCH6‑A4 and SCH6‑A5.
Step 1A. Work out the amount per year (if any) for rent assistance using MODULE C below.
Step 3. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 4. Add:
the ceiling rate; and
any amount obtained under step 1A; and
any amount obtained under step 3;
and, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, subtract the person’s minimum pension supplement amount. The result is the person’s rate of income support supplement.
The amount of a fortnightly instalment of income support supplement may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 7 (veteran payment, not blind)
The rate of veteran payment for a person who is not permanently blind is worked out in accordance with method statement 7.
Method statement 7
Step 1. Work out the person’s maximum basic rate using Module B below.
Step 2. Work out the amount of pension supplement (if any) using Module BA below.
Step 3. Work out the amount per year (if any) by way of rent assistance using Module C 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/adjusted income test using Module E below to work out the reduction for ordinary/adjusted income.
Step 6. Take the reduction for ordinary/adjusted income away from the maximum payment rate: the result is called the income reduced rate.
Step 7. Apply the assets test using Module F below to work out the reduction for assets.
Step 8. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.
Step 9. 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 payment rate.
Step 10. Work out the amount per year (if any) payable by way of remote area allowance using Module G below.
Step 11. Add any amount obtained in step 10 to the person’s provisional payment rate (see step 9). The result is the person’s rate of veteran payment.
For ordinary/adjusted income see point SCH6‑E1.
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 52Y and 52Z).
If a person’s rate is reduced because of Module E or F, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by clause 4 of Part 1.
The rate calculation for a member of a couple is affected by the operation of point SCH6‑A2.
The rate of veteran payment for a day will be rounded to the nearest cent (see subsection 58A(5)).
For the minimum amount of a fortnightly instalment of veteran payment, see subsection 58A(9).
An amount of remote area allowance is to be added under step 11 only if the person’s rate of veteran payment is greater than nil.
Method statement 8 (veteran payment, blind)
The rate of veteran payment for a person who is permanently blind is worked out in accordance with method statement 8.
Method statement 8
Step 1. Work out what would be the person’s rate of veteran payment if method statement 7 applied to the person: the result is called the notional income/assets tested rate.
This is the only situation in which a blind person’s veteran payment can be made subject to an income test or assets test (see point SCH6‑A3).
Step 2. Work out the person’s maximum basic rate using Module B below.
Step 3. Work out the amount of pension supplement (if any) using Module BA below.
Step 4. Add up the amounts obtained in steps 2 and 3: the result is called the maximum payment rate.
Step 5. Work out the amount per year (if any) payable by way of remote area allowance using Module G below.
Step 6. Add:
the maximum payment rate; and
any amount obtained under step 5.
The result is called the non‑income/assets tested rate.
Step 7. Compare the notional income/assets tested rate and the non‑income/assets tested rate: whichever is the greater is the person’s rate of veteran payment.
The rate of veteran payment for a day will be rounded to the nearest cent (see subsection 58A(5)).
For the minimum amount of a fortnightly instalment of veteran payment, see subsection 58A(9).
Members of couple
SCH6‑A2 If 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing those resources on a 50/50 basis (see points SCH6‑E3 and SCH6‑F2 below). They will also be treated as sharing expenses (eg for rent) on a 50/50 basis (see points SCH6‑C10 and SCH6‑C11 below).
Ordinary/adjusted income test and assets test generally not to apply to permanently blind people
SCH6‑A3 Except for the purposes of Step 1 in Method statement 2 (applicable in respect of permanently blind service pensioners who are not war widows/war widowers—pensioners) or in method statement 8 (applicable in respect of permanently blind veteran payment recipients), a permanently blind person’s service pension or veteran payment is not subject to an ordinary/adjusted income test (compare Module E) or an assets test (compare Module F).
For war widow/war widower—pensioner see subsection 5Q(1).
Ceiling rate
SCH6‑A4 The ceiling rate for a war widow/war widower—pensioner is $3,247.40 unless point SCH6‑A5 applies to him or her.
For war widow/war widower—pensioner see subsection 5Q(1).
The ceiling rate is adjusted 6 monthly in line with service pensions (see section 59LA).
SCH6‑A5 If:
a person became a war widow/war widower—pensioner before 1 November 1986; and
immediately before that day the person was receiving a social security pension at a rate (the pre‑November 1986 rate) equal to or more than $3,122.60; and
since that day the person has been continuously receiving the social security pension or income support supplement;
his or her ceiling rate is, subject to point SCH6‑A5A, equal to the pre‑November 1986 rate.
For war widow/war widower—pensioner see subsection 5Q(1).
SCH6‑A5A On and after 1 July 2000, the ceiling rate referred to in point SCH6‑A5 is taken to be equal to the pre‑November 1986 rate increased by 4%.
SCH6‑A6 However, if:
a war widow/war widower—pensioner is a person:
to whom income support supplement or service pension is payable; and
who is not permanently blind; and
the person’s pension under Part II or IV is compensation reduced;
the ceiling rate for the war widow/war widower—pensioner is the sum of:
the rate applying under point SCH6‑A4 or SCH6‑A5, as the case may be; and
the amount of the reduction in the pension under Part II or IV worked out under points SCH6‑A7 to SCH6‑A9.
For war widow/war widower—pensioner see subsection 5Q(1).
Compensation reduced pension under Part II or IV
SCH6‑A7 A pension under Part II payable to a war widow/war widower—pensioner is compensation reduced if that pension has been reduced:
by taking into account (under subsection 30(3)) the rate, or amount, of any payment that he or she is entitled to receive under the law of a State or of a foreign country; or
by taking into account (under Division 5A of that Part) the rate at which any compensation is payable to him or her.
For war widow/war widower—pensioner see subsection 5Q(1).
SCH6‑A8 A pension under Part IV payable to a war widow/war widower—pensioner is compensation reduced if that pension has been reduced by taking into account (under Division 4 of that Part) the rate at which any compensation is payable to him or her.
For war widow/war widower—pensioner see subsection 5Q(1).
SCH6‑A9 The amount of the reduction in the pension under Part II or IV is worked out by using the formula:
Start formula Full pension rate minus Compensation reduced rate end formula where:
full pension rate means the amount per annum that would have been the annual rate of the pension under Part II or IV if it had not been reduced.
compensation reduced rate means the annual rate of pension under Part II or IV payable after that pension has been reduced.
Module B—Maximum basic rate
Maximum basic rate for service pension or income support supplement
SCH6‑B1 A person’s maximum basic rate for service pension or income support supplement depends on the person’s family situation. Work out which family situation in Table B‑1 applies to the person. The maximum basic rate is the corresponding amount in column 3.
Table B‑1—Maximum basic rates for service pension or income support supplement | |||
|---|---|---|---|
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate per year $ | Column 4 Rate per fortnight $ |
1. | Not a member of a couple | 9,006.40 | 346.40 |
A member of an illness separated couple | |||
A member of a respite care couple | |||
2. | Partnered | 7,511.40 | 288.90 |
For member of a couple and partnered see section 5E, and for illness separated couple and respite care couple see subsections 5R(5) and (6).
The maximum basic rates are adjusted 6 monthly: see sections 59B to 59G.
Maximum basic rate for veteran payment
SCH6‑B2 A person’s maximum basic rate for veteran payment depends on the person’s family situation. Work out which family situation in Table B‑2 applies to the person. The maximum basic rate is the corresponding amount in column 3.
Table B‑2—Maximum basic rates for veteran payment | |||
|---|---|---|---|
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate per year $ | Column 4 Rate per fortnight $ |
1 | Not a member of a couple | 23,764 | 914 |
A member of an illness separated couple | |||
A member of a respite care couple | |||
2 | Partnered | 18,553.60 | 713.60 |
For member of a couple and partnered see section 5E, and for illness separated couple and respite care couple see subsections 5R(5) and (6).
The maximum basic rates are adjusted 6‑monthly in line with service pensions (see section 59LB).
Module BA—Pension supplement
Pension supplement
SCH6‑BA1 A pension supplement amount 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 12 weeks.
SCH6‑BA2 The person’s pension supplement amount is:
if an election by the person under subsection 60A(1) is in force—the amount worked out under point SCH6‑BA4; and
otherwise—the amount worked out under point SCH6‑BA3.
Amount if no election in force
SCH6‑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% |
For combined couple rate of pension supplement, see subsection 5GA(1).
Amount if election in force
SCH6‑BA4 The person’s pension supplement amount is the amount worked out as follows:
work out the amount for the person under point SCH6‑BA3 as if the election were not in force;
from that amount, subtract the person’s minimum pension supplement amount.
Module BB—Energy supplement
When energy supplement is to be added
SCH6‑BB1 An energy supplement is to be added to the person’s maximum basic rate (of service pension) 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 65A may affect the addition of the energy supplement.
SCH6‑BB2 However, this Module does not apply if quarterly energy supplement for service pension is payable to the person.
Amount of energy supplement
SCH6‑BB3 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 |
For member of a couple, partnered, illness separated couple and respite care couple see subsections 5E(1) and (5) and 5R(5) and (6) respectively.
Module C—Rent assistance
Application
SCH6‑C1 Points SCH6‑C2 to SCH6‑C11 apply to a person who is in receipt of a service pension, income support supplement or a veteran payment.
Rent assistance
SCH6‑C2 Rent assistance is an amount that may be added to the maximum basic rate or ceiling rate to help cover the cost of rent. A person who is eligible for rent assistance under point SCH6‑C3 can have added to his or her maximum basic rate or ceiling rate the amount applying to that person under Table C‑2.
Eligibility for rent assistance
SCH6‑C3(1) Rent assistance is to be added to a person’s maximum basic rate or ceiling rate if:
the person is not an aged care resident; and
the person is not an ineligible property owner; and
the person pays, or is liable to pay, rent (other than Government rent); and
the rent is payable at a rate of more than the rent threshold rate; and
either:
the person is in Australia; or
the person is temporarily absent from Australia and the period in respect of which the rent assistance is sought is not a period after the first 26 weeks of the absence; and
in a case where the person is entitled to be paid a family tax benefit—the person satisfies either point SCH6‑C3A or SCH6‑C3B.
For aged care resident see subsection 5NC(5).
For rent, Government rent and ineligible property owner see section 5N.
For rent threshold rate see point SCH6‑C6.
For illness separated couple and respite care couple see subsections 5R(5) and (6).
(2) If:
the person is temporarily absent from Australia; and
the Commission is satisfied that the person is unable to return to Australia before the end of the 26 weeks mentioned in subparagraph (1)(e)(ii) because of an event referred to in subpoint (3);
the Commission may, in relation to the person, determine that a reference to 26 weeks in subparagraph (1)(e)(ii) is taken to be a reference to another number of weeks.
The events are the following:
a serious accident involving the person or a family member of the person;
a serious illness of the person or a family member of the person;
the hospitalisation of the person or a family member of the person;
the death of a family member of the person;
the person’s involvement in custody proceedings in the country in which the person is located;
a legal requirement for the person to remain outside Australia in connection with criminal proceedings (other than criminal proceedings in respect of a crime alleged to have been committed by the person);
robbery or serious crime committed against the person or a family member of the person;
a natural disaster in the country in which the person is located;
a public health crisis affecting Australia or the country in which the person is located or both;
political or social unrest in the country in which the person is located;
industrial action in the country in which the person is located;
a war in the country in which the person is located.
The Commission must not make a determination under subpoint (2) unless:
the event occurred or began during the period of absence; and
if the event is political or social unrest, industrial action or war—the person is not willingly involved in, or willingly participating in, the event.
If the Commission determines another number (the new number) of weeks under subpoint (2), then, immediately after that determination is made, a reference to a number of weeks in subparagraph (1)(e)(ii), and each reference to a number of weeks in subpoint (2), is taken to be a reference to that new number.
SCH6‑C3A A person satisfies this point if:
the person is not a member of a couple, or is a member of an illness separated couple or a respite care couple, and is entitled to be paid a family tax benefit; and
either:
the person’s maximum Part A rate of family tax benefit does not include rent assistance; or
the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit.
SCH6‑C3B A person satisfies this point if:
the person is a member of a couple (other than an illness separated couple or a respite care couple) and the person, or the person’s partner, is entitled to be paid family tax benefit; and
either:
the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance; or
the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance and clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.
No rent assistance if partner getting incentive allowance under the Social Security Act
SCH6‑C4 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 or ceiling rate under point SCH6‑C3 if an amount by way of incentive allowance is being added to the maximum basic rate or ceiling rate of the person’s partner.
For incentive allowance see subsection 5Q(1); the provisions of the Social Security Act relating to incentive allowance were repealed with effect from 12 November 1991 but the allowance continues to be paid to certain existing recipients under clause 36 of Schedule 1A to that Act.
Partner with rent increased pension
SCH6‑C5 A person has a partner with a rent increased pension, for the purposes of this Module, if:
the partner is living with the person in their home; and
the partner is receiving a service pension, income support supplement, a veteran payment or a social security pension; and
either of the following applies:
the partner is receiving a service pension, income support supplement, a veteran payment or a social security pension the rate of which is increased to take account of rent paid or payable by the partner;
the partner is receiving a social security pension and is entitled to be paid family tax benefit at a rate higher than the base rate under clause 4 of Schedule 1 to the Family Assistance Act and which includes an amount to take account of rent paid or payable by the partner.
For the treatment of rent paid by a member of a couple see points SCH6‑C10 and SCH6‑C11.
Rent threshold rate
SCH6‑C6 A person’s rent threshold rate depends on the person’s family situation. Work out which family situation in Table C‑1 applies to the person. The rent threshold rate is the corresponding amount in column 3.
Table C‑1—Rent threshold rates | |||
|---|---|---|---|
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate per year $ | Column 4 Rate per fortnight $ |
1 | Not a member of a couple | 3,952.00 | 152.00 |
A member of an illness separated couple | |||
A member of a respite care couple | |||
Partnered—partner without a rent increased pension | |||
2 | Partnered—partner with a rent increased pension | Half the rent threshold (combined couples) | Half the rent threshold (combined couples) |
For member of a couple and partnered see section 5E.
For partner with a rent increased pension see point C5.
Note 2A: For rent threshold (combined couples) see point C6A.
The column 3 amounts are indexed 6 monthly in line with CPI increases (see sections 59B to 59E).
Rent threshold (combined couples)
SCH6‑C6A For the purposes of this Module, the rent threshold (combined couples) is $6,401.20 per year and $246.20 per fortnight.
This rate is indexed 6 monthly in line with CPI increases (see sections 59B to 59E).
Factors affecting rate of rent assistance
SCH6‑C7 The rate of rent assistance depends on:
the annual rent paid or payable by the person; and
whether or not the person has a partner with a rent increased pension.
Rate of rent assistance
SCH6‑C8(1) The rate of rent assistance is whichever is the lesser of rate A and rate B applicable to the person in accordance with Table C‑2.
Table C‑2—Rate of rent assistance | |||
|---|---|---|---|
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate A $ | Column 4 Rate B $ |
1 | Not a member of a couple | Start formula 3 times start fraction open bracket AR minus RTR close bracket over 4 end fraction end formula | 5,600.40 |
A member of an illness separated couple | |||
A member of a respite care couple | |||
Partnered—partner without a rent increased pension | |||
2 | Partnered—partner with a rent increased pension | Start formula 3 times start fraction open bracket AR minus 2RTR close bracket over 8 end fraction end formula | Half the rent assistance maximum rate (combined couples) |
For member of a couple and partnered see section 5E.
For partner with a rent increased pension see point C5.
Note 2A: For rent assistance maximum rate (combined couples) see point C8A.
The column 4 amounts are indexed 6 monthly in line with CPI increases (see sections 59B to 59E).
In Table C‑2:
AR means annual rent as provided by points SCH6‑C9 to SCH6‑C11.
RTR means the rent threshold rate applicable under column 3 of Table C‑1 in point SCH6‑C6.
Rent assistance maximum rate (combined couples)
SCH6‑C8A For the purposes of this Module, the rent assistance maximum rate (combined couples) is $5,278.00 per year.
This rate is indexed 6 monthly in line with CPI increases (see sections 59B to 59E).
Annual rent
SCH6‑C9 Annual rent is the annual rent paid or payable by the person whose service pension rate, income support supplement rate or veteran payment rate is being calculated.
Rent paid by a member of a couple
SCH6‑C10 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.
For member of a couple see section 5E.
Rent paid by a member of an illness separated or respite care couple
SCH6‑C11 If a person is a member of an illness separated couple or a 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.
For illness separated couple and respite care couple see subsections 5R(5) and (6).
Module E—Ordinary/adjusted income test
Definition
SCH6‑E1 In this Module:
ordinary/adjusted income means:
for the purpose of the calculation of the rate of service pension or veteran payment—ordinary income; or
for the purpose of the calculation of the rate of income support supplement—adjusted income.
For ordinary income and adjusted income see section 5H.
Effect of income on maximum payment rate
SCH6‑E2 This is how to work out the effect of a person’s ordinary/adjusted income on the person’s maximum payment rate:
Method statement
Step 1. Work out the annual rate of the person’s ordinary/adjusted income.
For the treatment of the ordinary/adjusted income of members of a couple see point SCH6‑E3.
Step 2. Work out the person’s ordinary/adjusted income free area (see point SCH6‑E6 below).
A person’s ordinary/adjusted income free area is the maximum amount of ordinary/adjusted income the person can have without affecting the person’s rate of service pension, income support supplement or veteran payment.
Step 3. Work out whether the person’s ordinary/adjusted income exceeds the person’s ordinary/adjusted income free area.
Step 4. If the person’s ordinary/adjusted income does not exceed the person’s ordinary/adjusted income free area, the person’s ordinary/adjusted income excess is nil.
Step 5. If the person’s ordinary/adjusted income exceeds the person’s ordinary/adjusted income free area, the person’s ordinary/adjusted income excess is the person’s ordinary/adjusted income less the person’s ordinary/adjusted income free area.
Step 6. Use the person’s ordinary/adjusted income excess to work out the person’s reduction for ordinary/adjusted income using point SCH6‑E11 below.
See the Method statements in point SCH6‑A1 for the significance of the person’s reduction for ordinary/adjusted income.
The application of the ordinary/adjusted income test is affected by provisions about the following:
the general concept of ordinary income (sections 46 and 46A);
the work bonus (section 46AA);
business income (sections 46B and 46C);
income from financial assets (including income streams (short term) and certain income streams (long term)) (Division 3 of Part IIIB);
income from income streams not covered by Division 3 of Part IIIB (Division 4 of Part IIIB);
disposal of income (sections 48‑48E).
Ordinary/adjusted incomes of members of couples
SCH6‑E3 If a person is a member of a couple, add the annual rates of the couple’s ordinary/adjusted incomes and divide by 2 to work out the amount of the person’s ordinary/adjusted income for the purposes of this Module. However, in making this calculation disregard any amount that is taken (whether for the purposes of this Act or of the Social Security Act) to be ordinary income of either partner because of section 59TA of this Act or section 1174 of the Social Security Act.
Additional ordinary income because of excess compensation payments
SCH6‑E3A Add to the amount derived for a person under point SCH6‑E3 any amount that is taken (whether for the purposes of this Act or of the Social Security Act) to be ordinary income of the person because of section 59TA of this Act or section 1174 of the Social Security Act.
Payment of arrears of periodic compensation payments
SCH6‑E4 If:
at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving a compensation affected pension; and
in relation to the entitlement, the person receives a payment (an arrears 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 of the arrears payment by the number of days in the periodic payments period.
For event that gives rise to an entitlement to compensation, compensation affected pension and periodic payments period see section 5NB.
Ordinary/adjusted income free area
SCH6‑E5 A person’s ordinary/adjusted income free area is the amount of ordinary/adjusted income the person can have without any deduction being made from the person’s maximum payment rate.
How to calculate a person’s ordinary/adjusted income free area
SCH6‑E6 A person’s ordinary/adjusted 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/adjusted income free area is the corresponding amount in column 3.
Table E‑1—Ordinary/adjusted income free area | |||
|---|---|---|---|
Column 1 Item | Column 2 Category of person | Column 3 Basic income free area per year $ | Column 4 Basic income free area per fortnight $ |
1. | Not member of a couple | 2,548 | 98 |
2. | Partnered (partner getting neither pension nor benefit) Partnered (partner getting benefit) | 2,236 | 86 |
3. | Partnered (partner getting pension) | 2,236 | 86 |
For member of a couple, partnered (partner getting neither pension nor benefit), partnered (partner getting benefit) and partnered (partner getting pension) see section 5E.
Items 2 and 3 of Table E‑1 apply to members of illness separated and respite care couples.
The basic free area is indexed annually in line with CPI increases (see sections 59B to 59E).
Reduction for ordinary/adjusted income in excess of ordinary/adjusted income free area
SCH6‑E11 (1) A person’s reduction for ordinary/adjusted income is:
Start formula Ordinary/adjusted income excess times 0.5 end formula
In this point:
ordinary/adjusted income excess, in relation to a person, means the person’s ordinary/adjusted income less the person’s ordinary/adjusted income free area.
Module F—Assets test
Effect of assets on maximum payment rate
SCH6‑F1 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 SCH6‑F2.
For the assets that are to be disregarded in valuing a person’s assets see section 52.
For the valuation of an asset that is subject to a charge or encumbrance see sections 52C and 52CA.
Step 2. Work out the person’s assets value limit (see point SCH6‑F3 below).
A person’s assets value limit is the maximum value of assets the person can have without affecting the person’s rate of service pension, income support supplement or veteran payment.
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 point SCH6‑F4 below.
See the Method statements in point SCH6‑A1 for the significance of the person’s reduction for assets.
The application of the assets test is affected by provisions about the following:
disposal of assets (sections 52E – 52JE);
special residences (sections 52KA – 52X);
financial hardship (sections 52Y and 52Z);
the pensions loans scheme (sections 52ZAAA – 52ZM.
Value of assets of members of couples
SCH6‑F2 For the purposes of this Module:
the value of the assets of a member of a couple is 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 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
SCH6‑F3 A person’s assets value limit is worked out using Table F‑1. Work out the person’s family situation and property ownership situation. The assets value limit is the corresponding amount in column 3.
Table F‑1—Assets value limit | |||
|---|---|---|---|
Column 1 | Column 2 | Column 3 | |
Item | Person’s family | Column 3A Either person or partner property owner $ | Column 3B Neither person nor partner property owner $ |
1. | Not member of a couple | 250,000 | 450,000 |
2. | Partnered | 187,500 | 287,500 |
For member of a couple and partnered see section 5E.
For property owner see section 5L.
Item 2 applies to members of illness separated and respite care couples.
The assets value limit in column 3B of item 1 is adjusted annually under section 59H. The other assets value limits are indexed annually in line with CPI increases (see sections 59B to 59E).
Reduction for assets in excess of assets value limit
SCH6‑F4(1) A person’s reduction for assets is worked out by using the formula:
Start formula start fraction open bracket Assets excess close bracket times 19.5 over 250 end fraction end formula where:
assets excess means the value of the person’s assets less the person’s assets value limit.
In calculating a person’s assets excess under subpoint (1), disregard any part of the excess that is not a multiple of $250.
Module G—Remote area allowance
Remote area allowance
SCH6‑G1 An amount by way of remote area allowance is to be included in a person’s rate of service pension, income support supplement or veteran payment if:
one of the following subparagraphs applies:
the person’s rate of service pension, income support supplement or veteran payment apart from this point is greater than nil; or
in the case of service pension or income support supplement—the person’s rate of service pension or income support supplement apart from this point is nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of the Social Security Act; or
in the case of service pension or income support supplement—the person’s rate of service pension or income support supplement apart from this point is nil merely because of the operation of Part IVA; 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 5Q.
Rate of remote area allowance
SCH6‑G2 The rate of remote area allowance payable to a person is worked out using Table G. 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 G—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 a couple | 473.20 | 18.20 | 189.80 | 7.30 |
A member of an illness separated couple | |||||
A member of a respite care couple | |||||
Partnered—partner not receiving remote area allowance | |||||
2. | Partnered (partner receiving remote area allowance) | 405.60 | 15.60 | 189.80 | 7.30 |
For FTB child and regular care child see subsection 5F(1).
For member of a couple and partnered see section 5E.
For illness separated couple and respite care couple see subsections 5R(5) and (5A).
Eligibility of FTB children and regular care children who are outside Australia
SCH6‑G3(1) If an FTB child, or a regular care child, leaves Australia otherwise than temporarily, additional allowance is not payable for the child on or after the day on which he or she left Australia.
If an FTB child, or a regular care child, is temporarily absent from Australia for more than 8 weeks, additional allowance is not payable for the child after the first 8 weeks of the absence.
Special rule where partner has an FTB or regular care child but is not receiving a pension, benefit or allowance
SCH6‑G4 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 service pension, income support supplement, a veteran payment, a social security pension, or a social security 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
SCH6‑G5 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
SCH6‑G6 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.
This Act’s bill:Second reading speech
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