Income Test for single pension customers 108-03010010

As from 20 September 2009 due to changes to the pension income test, this procedure does not contain information for:

• Disability Support Pension (DSP) customers, see:
• Income Test for Disability Support Pension customer who is under 21 years, with no dependent children and with affecting income at 19 September 2009, or
• Income Test for Disability Support Pension customer who is under 21 years with no dependent children
• Parenting Payment Single (PPS) customers, see Parenting Payment Single (PPS) income and assets tests

Has the customer been in receipt of one of the following payments on or prior to 20 March 1995 as well as being in receipt of the Department of Veterans' Affairs (DVA) War Widows and Widowers Pension since 20 March 1995:

• Age Pension
• Carer Payment
• DSP, or
• Wife Pension?

• Yes, see Completing Department of Veterans' Affairs (DVA) clearances and income coding. Procedure ends here
• No, go to Step 3

• Yes, go to Step 4
• No, go to Step 5

The customer may be entitled to the Work Bonus. This is an additional deduction for the assessment of eligible income.

Eligible income includes both employment income and self-employment income earned through personal exertion.

The Work Bonus is available to pensioners of Age Pension age except for PPS customers or a customer paid under the transitional rules for pension customers.

Calculate Work Bonus Affected Income (WBAI) before the Income Test is applied. For more information, see Work Bonus and balance for pensioners of Age Pension age.

• Yes, go to Step 6
• No, go to Step 8

If the customer is eligible for Working Credit and in receipt of employment income, they may be entitled to a deduction in the assessment of their employment income. For more information, see Working credits.

Check the Working Credit Balance Summary (WCBS) screen to see if the customer has accrued a Working Credit balance. If there is a number greater than zero in the Balance: field, calculate the adjusted total ordinary income to be used in the rate calculation.

• A summary of income and asset details the customer has previously advised, will be displayed on the Pensions Income and Asset Summary (PIAS) screen

Note: Parental Leave Pay (PPL) for children born or entrusted to care on or after 1 October 2016, is counted as ordinary income, however will not display on the PIAS screen. To view details of PPL, navigate to the PPL Eligibility Determination (P1RED) screen. The amount of PPL will be included in the ‘Income total’ amount displayed on the Factors Affecting Rate (PFAR) screen. Employment income coded with a frequency of IOP or LOP will not display on the PIAS screen. Check the EANS screen for any employment income to be included

• Check with the customer to ensure that these details are correct
• Update any changes advised by the customer
• Calculate the total gross ordinary income from the details on the customer’s record, taking into account any corrected balances as advised by the customer

Do not include any direct deduction income amount. If on the PIAS screen, the Forgn Pension: field or Compensation: field contains income amounts, check Pensions Rate Calculation (PRC) screen to check if these amounts are direct deduction amounts. If so, these should not be included in assessing the effect of ordinary income on the customer's rate of payment.

Note: from 20 September 2009, the additional income free area for children only applies to PPS or pensioners paid under the transitional rules for pension customers.

• Yes, there is no effect on the rate of payment under the Income Test and the maximum rate of pension is payable, see Step 1 in Table 2
• No, go to Step 9

If the adjusted income is more than the pension income free area limit, determine the affecting income for the fortnight:

• Affecting income for the customer = (adjusted income - pension income free area limit) x 0.50
• If using annual figures, divide result by 364 (not 365) to get a daily amount of affecting income

Determine the amount payable (including Pension Supplement and if eligible, Rent Assistance):

Amount payable = (maximum rate - direct deduction income amount) - affecting income.

If the amount payable is more than nil but equal to or less than the minimum Pension Supplement, the minimum Pension Supplement will be paid.

If the customer's income reduces their fortnightly rate to nil and some of that income is employment income, the customer's payment may remain current at nil rate for up to 12 fortnights, known as the employment income nil rate period.

See Assets Test for single pension customers.

The customer's entitlement will be the lower of the amounts and the customer will be subject to the test under which the lower rate was calculated.

From 20 September 2009, some customers may be paid under the transitional rate if they are worse off under the current rules.

Customer will not be eligible for payment under the transitional rules if they claim on or after 20 September 2009.

Is the customer eligible to be considered for payment under the transitional rules for pension customers? Note: if unsure, see the Grandfathering Summary (GFS) screen.

• Yes, a rate calculation is also required under transitional rules with the higher amount under the current Means Test and the transitional rules applying. For an explanation of the transitional rules, see Transitional rules for pension customers who were on payment at 19 September 2009. Go to Step 4
• No, go to Step 4

If the customer is affected by the income test and:

• they will receive nil rate due to the income test, and
• some of that income is employment income, advise details of employment income nil rate period. If they are also in receipt of Family Tax Benefit (FTB) Part A, they will be subject to the FTB Part A income test, if they commence an employment income nil rate period

Record details on a DOC.