Carer Allowance (CA) income test 009-18091105

From 20 September 2018, to be eligible for Carer Allowance (CA) and CA Health Care Card (HCC only), the carer's and their partner's combined Adjusted Taxable Income (ATI) must be under $250,000 a year. The same income limit applies if the carer does not have a partner.

Carers who are exempt from providing their income details for the CA income test are generally not subject to a CA income review. However, carers who are only exempt because they or their partner currently receives Family Tax Benefit, are subject to Australian Taxation Office (ATO) triggered CA income reviews.

The CA income test is based on the annual ATI of the carer (and their current partner if they have one). The ATI is the income for a financial year nominated by the carers. The income details the carer provides can be for either of the 2 financial years preceding the current financial year. If the carer is required to lodge a tax return the ATI provided should be the most recent details verified by the ATO.

Where a carer has a partner, they must both provide income details for the same financial year. Where the carer or their partner is 60 years of age or older and they have an account-based income stream, the income stream is deemed to earn income which is added to the ATI. Deemed income from account-based income streams is calculated using the current account balance.

The income test does not affect the rate of CA. The income limit is a fixed amount and is not indexed.

ATI is the sum of:

• Taxable income - even if the person is not required to lodge a tax return. Where the allowable deductions are greater than the gross income, zero taxable income is recorded
• Target foreign income - foreign income on which Australian income tax is not paid
• Total net investment losses - the sum of net financial investment losses and net rental property losses
• Employer provided fringe benefits in excess of $1,000
• Reportable superannuation contributions - these include salary sacrifice amounts plus personal superannuation contributions for which a person has claimed a deduction in their tax return
• Tax-free pensions or benefits
• Less child support paid - also known as deductible child maintenance expenditure
• Deemed income from an account-based income stream is added to the carer's or their partner's ATI where the account holder is 60 years of age or older

For further information, examples of income and how to calculate profit and losses, see Carer Allowance (CA) income test - determining reference tax year and assessable income components.

From 1 July 2019, a CA income review may be issued where a carer who is not exempt from providing their income details for the CA income test, experiences a change in circumstances or is identified by an ATO data-match, see Carer Allowance (CA) income reviews.

CA claimants and recipients are exempt from providing their income details for the CA income test if they or their partner receive a qualifying payment or card.

Qualifying payments and cards are limited to the following:

• an income-tested Centrelink or Department of Veterans' Affairs (DVA) Income Support Payment (ISP)
• Family Tax Benefit (FTB) paid in fortnightly instalments, or
• Commonwealth Seniors Health Card (CSHC)

Carers and/or partners are considered to receive a payment or card if the benefit status is current (CUR), current at zero rate (CZR) or suspended (SUS) for less than 13 weeks.

The system will automatically apply the exemption in most cases. A CA income review will be triggered by the system if the carer loses their exemption. A loss of exemption occurs when neither the carer nor their partner receive a qualifying payment or card. A review will not be triggered if adjusted taxable income details were previously provided in the same financial year. A review may also be triggered when a carer's record (or their partner's record) does not contain the details required to determine an exemption. For example, DVA customers who have not previously had a DVA clearance completed or who have no DVA details recorded.

When a carer has been sent a CA income test review, they must be encouraged to complete the review to avoid the cancellation of CA, even when they may be considered exempt from providing their income details.

Centrelink income-tested Income Support Payments (ISPs)

Carers and/or partners are considered to receive a payment if the benefit status is:

• current (CUR)
• current at zero rate (CZR), or
• suspended (SUS) for less than 13 weeks

The following Centrelink ISPs exempt the carer from providing their income details for the CA income test:

• Age Pension (see note)
• Austudy
• Carer Payment
• Disability Support Pension (see note)
• Farm Household Allowance
• JobSeeker Payment
• Parenting Payment Partnered
• Parenting Payment Single
• Youth Allowance
• Special Benefit

Note: Disability Support Blind (DSB) pension and Age Pension Blind (AGB) pension are not treated as income-tested ISPs for the purpose of the CA income test unless Rent Assistance (RA) is currently paid with the pension.

Department of Veterans' Affairs ISPs

The following DVA ISPs exempt the carer from providing their income details for the CA income test:

• Age service pension
• Invalidity service pension
• Partner service pension
• Carer service pension
• Social security age pension (paid by DVA)
• Income support supplement
• Veteran Payment

Family Tax Benefit (FTB)

A person is only to be considered to receive FTB if they receive any rate of FTB (either Part A or Part B or both) by fortnightly instalment or their FTB status is current zero rate (CZR).

An exception applies where a carer is only exempt because they or their partner receive FTB and are subject to CA income reviews as a result of Australian Taxation Office data-matching. If CA is cancelled as a result of this review, the carer is not exempt from providing their income details for the income test for a subsequent CA claim in the same financial year if there is no other reason for an exemption.

Commonwealth Seniors Health Card (CSHC)

A person will be considered to receive a CSHC if their status is SHC/CUR or SHC/CUR-NOI.

From 20 September 2018, CA and combined Carer Payment (CP) and CA claimants who are not exempt from providing their income details for the Carer Allowance (CA) income test at the time of claim are asked to provide their Adjusted Taxable Income (ATI) details for CA as part of their claim.

Also from this date, income reviews were introduced for existing CA recipients (including Carer Allowance Health Care Card (CA HCC only) recipients) who are not exempt from providing their income details for the Carer Allowance (CA) income test. Carers can return their income details using the Carer Allowance Income Review online service. For information processing these reviews, see Carer Allowance (CA) income reviews.

Deemed income from account-based income streams is calculated using the current account balance and added to the ATI details for the person. The carer must provide a Details of income stream product (SA330) form or similar schedule from their or their partner's income stream provider before the new account-based income stream can be added.

Carers will only need to provide income stream details for CA if:

• the account holder (the carer or their partner) is 60 years of age or older
• the details are not already held on the person's Centrelink record, and
• the carer is not exempt from providing their income details for the CA income test

For more information, see:

• Carer Allowance (CA) income test - determining reference tax year and assessable income components
• Carer Allowance (CA) income test - acceptable evidence of income

Prior to 20 September 2018, there was no requirement for CA claims to capture partner details. From this date CA claims have captured the details of the carer's partner and reviews were issued to those carer's who were required to provide their ATI. The reviews also captured partner details.

Carer Allowance remains a 'supplementary payment' it's not an income support payment (ISP).

When a carer and their partner's ATI is recorded in Process Direct (PD) the income details for each member of the couple are separately recorded on their own records. When a couple's records are unlinked, due to separation, assessment of the carer's own income will continue and the former partner's income will no longer be assessed automatically. Because the income is recorded on each individuals record there is no requirement to ask the carer to provide their ATI again when they are separated.

A Separation details (MOD S) form is not required before unlinking CA only carers who have separated from their partner. However CA only carers who advise they are separated under one roof (SUOR) will be required to complete a Relationship details – Separated under one roof (SS293) form. See Member of a Couple (MoC) and Separated under one roof (SUOR) assessments for more information.

Where a Carer Allowance (CA) only carer who is not exempt from the CA income test advises they have become partnered, a Partner details (MOD P) form should be completed jointly by the customer and partner. See Change in relationship status from single to partnered.

The CA income test does not have any grandfathering arrangements for deeming of account-based income streams unlike other payments or entitlements. Deeming will apply if the carer is not exempt from providing their income details for the CA income test and the account holder is 60 years of age or older, regardless of when the person purchased the account-based income stream product or the way the account-based income stream was acquired.

This means account-based income streams that may be grandfathered (not subject to deeming) for Commonwealth Seniors Health Care Card (CSHC) or income support payment purposes are still deemed for CA purposes if the account-holder is 60 years of age or older and the carer is not exempt from providing their income details for the CA income test.

Account-based income streams that may be grandfathered for CSHC or income support purposes but included for CA purposes include:

• account-based income streams purchased before 1 January 2015
• new account-based income streams created due to a family law split
• account-based income streams that transfer to a reversionary beneficiary