Commonwealth Consolidated Acts

SOCIAL SECURITY ACT 1991 - SECT 1064

  (1)   The rate of:

  (a)   age pension; and

  (b)   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

  (d)   carer payment;

is, subject to subsection   (2), to be calculated in accordance with the Rate Calculator at the end of this section.

Note 1:   Module A of the Rate Calculator establishes the overall rate calculation process and the remaining Modules provide for the calculation of the component amounts used in the overall rate calculation.

Note 2:   The rate obtained by applying the Rate Calculator may be reduced because of:

•    the receipt of compensation (see Part   3.14); or
•    overseas portability (see Part   4.2--Division   3); or
•    the receipt of payments under a self - employment program (see Part   3.15).

Note 3:   For dependent child see section   5.

  (2)   Subsection   (1) does not apply to a person's age or disability support pension if the person is permanently blind.

Note:   The rate for an age pension or disability support pension payable to a person who is permanently blind is dealt with in section   1065.

  (4)   If:

  (a)   a person has a relationship with another person, whether of the same sex or a different sex ( other person ); and

  (b)   the relationship between them is a   de   facto   relationship in the Secretary's opinion (formed after the Secretary has had regard to all the circumstances of the relationship, including, in particular, the matters referred to in paragraphs 4(3)(a) to (e) and subsection   4(3A));

  (c)   either or both of them are under the age of consent applicable in the State or Territory in which they are living;

the person's pension rate is not to exceed the rate at which it would be payable to the person if the other person were the person's partner.

Note:   This provision has the effect of taking into account the ordinary income, maintenance income and assets of the partner in applying the ordinary income test, maintenance income test and assets test respectively.

Rate limited for armed service widow

  (5)   If:

  (a)   an armed services widow is receiving 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

  (b)   one of the following is payable to the widow:

  (i)   an age pension;

  (ii)   a disability support pension;

  (iv)   a carer payment;

the widow's pension rate is not to exceed:

  (c)   if:

  (i)   the widow has been receiving the payment referred to in paragraph   (a) continuously since before 1   November 1986; and

  (ii)   immediately before 1   November 1986, the widow was receiving a payment referred to in paragraph   (b) at a rate exceeding $3,247.40; and

  (iii)   the pension referred to in paragraph   (b) is of the same type as the one which was payable to the person before 1   November 1986;

    the rate of pension received by the widow immediately before 1   November 1986; and

  (d)   in any other case--$3,247.40.

Note:   For armed services widow see subsection   4(1).

Rate limited for armed services widower

  (6)   If:

  (a)   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

  (b)   one of the following is payable to the widower:

  (i)   an age pension;

  (ii)   a disability support pension;

  (iii)   a carer payment;

the rate of pension payable to the widower is not to exceed $3,247.40.

Note:   For armed services widower see subsection   4(1).

  (7)   If:

  (a)   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

  (b)   one of the following is payable to the widow or widower:

  (i)   an age pension;

  (ii)   a disability support pension;

  (iv)   a carer payment;

the rate of pension payable to the widow or widower is not to exceed $3,247.40.

Note:   For armed services widow and armed services widower see subsection   4(1).

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).

Note 1:   If a person's assets reduced rate is less than the person's income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections   1129 and 1130).

Note 2:   Section   1210 deals with the application of income and assets test reductions.

Note 3:   The rate calculation for a member of a couple is affected by the operation of points 1064 - A2 and 1064 - A3.

Note 4:   In some circumstances a person may also be qualified for a pharmaceutical allowance under Part   2.22.

Note 5:   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).

Note 7:   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).

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.

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

Note 2:   The maximum basic rates are adjusted 6 monthly: see sections   1191 to 1198A.

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:

  (a)   is in Australia; or

  (b)   is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks;

the person's pension supplement amount is:

  (c)   if an election by the person under subsection   1061VA(1) is in force--the amount worked out under point 1064 - BA4; and

  (d)   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:

  (a)   applying the applicable percentage in the following table to the combined couple rate of pension supplement; and

  (b)   if:

  (i)   the person is not partnered; and

  (ii)   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).

Note:   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:

  (a)   work out the amount for the person under point 1064 - BA3 as if the election were not in force;

  (b)   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.

  1064 - C1   An energy supplement is to be added to the person's maximum basic rate if the person is residing in Australia and:

  (a)   is in Australia; or

  (b)   is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.

Note:   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:

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:

Note 1:   See point 1064 - A1 (Steps 5 to 8) for the significance of the person's reduction for ordinary income.

Note 2:   The application of the ordinary income test is affected by provisions concerning:

•    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.

Note:   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:

  (a)   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

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

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

Note:   For periodic payments period see section   17.

How to calculate a person's ordinary income free area

  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.

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

Note 3:   Items   2, 3 and 4 of Table E - 1 apply to members of illness separated and respite care couples.

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

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

  1064 - E10   A person's reduction for ordinary income is:

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.

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)   a person's employment has been terminated; and

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

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

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

  1064 - F4   If:

  (a)   a person is employed; and

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

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

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

Certain payments taken to be ordinary income--employment terminated

  1064 - F5   If:

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

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

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

More than one termination payment on a day

  1064 - F6   If:

  (a)   a person is covered by point 1064 - F5; and

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

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

Start of income maintenance period--employment continuing

  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)   a person who is covered by point 1064 - F5 is subject to an income maintenance period (the first period ); and

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

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

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

  1064 - F10   If:

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

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

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

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

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

  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.

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

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

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

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

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

When a person receives a leave payment or a termination payment

  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:

  (a)   the payment is made to another person:

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

  (ii)   on behalf of the first person; or

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

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

Single payment in respect of different kinds of termination payments

  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):

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

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

Definitions

  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:

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

  (b)   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

  (c)   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:

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

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

"redundancy payment" includes a payment in lieu of notice.

"termination payment" includes:

  (a)   a redundancy payment; and

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

  (c)   any other payment that is connected with the termination of a person's employment.

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:

Note 1:   See point 1064 - A1 (steps 9 and 10) for the significance of the person's reduction for assets.

Note 2:   The application of the assets test is affected by provisions concerning disposal of assets (sections   1123 to 1128), retirement villages (sections   1145 to 1157) and financial hardship (sections   1129 and 1130).

Value of assets of members of couples

  1064 - G2   For the purposes of this Module:

  (a)   the value of the assets of a member of a couple is to be taken to be 50% of the sum of:

  (i)   the value of the person's assets; and

  (ii)   the value of the person's partner's assets; and

  (b)   the value of the assets of a particular kind of a member of a couple is to be taken to be 50% of the sum of:

  (i)   the value of the person's assets of that kind; and

  (ii)   the value of the person's partner's assets of that kind.

Assets value limit

  1064 - G3   A person's assets value limit is worked out using 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.

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

Note 2:   For homeowner see section   11.

Note 3:   Items   2 and 3 apply to members of illness separated and respite care couples.

Note 4:   The assets value limits are indexed or adjusted annually in line with CPI increases (see sections   1191 to 1194 and 1203).

Pension reduction for assets in excess of assets value limit

  1064 - G4   A person's reduction for assets is worked out using Table G - 2. Work out which family situation applies to the person. The reduction for assets is the amount per year worked out using the corresponding calculation in column 3.

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

Note 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.

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:

  (aa)   either:

  (i)   the person's rate of pension apart from this point is greater than nil; or

  (ii)   apart from this point, the person's rate of pension would be nil merely because an election by the person under subsection   1061VA(1) is in force; and

  (a)   the person's usual place of residence is situated in the remote area; and

  (b)   the person is physically present in the remote area.

Note:   For remote area and physically present in the remote area see section   14.

Rate of remote area allowance

  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.

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

Special rule where partner has an FTB or regular care child but is not receiving a pension

  1064 - H5   If:

  (a)   a person who is a member of a couple is qualified for an amount by way of remote area allowance; and

  (b)   the person's partner is not receiving a pension or benefit; and

  (c)   the person's partner has an FTB child or a regular care child;

the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.

Special rule where partner has an FTB or regular care child but is not receiving additional allowance for the child

  1064 - H6   If:

  (a)   a person who is a member of a couple is qualified for an amount by way of remote area allowance; and

  (b)   the person's partner has an FTB child or a regular care child; and

  (c)   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.

Note:   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.