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Income Test for Disability Support Pension customer who is under 21 years with no dependent children 108-03010040

This document outlines how under the pension Income Test, a customer's pension rate is reduced if their assessable income is above a certain limit.

On this page:

Initial assessment

Determining rate payable

Initial assessment

Table 1

Step	Action
1	A Disability Support Pension (DSP) customer, who is under 21 years, contacts Services Australia to enquire how their income will affect their pension payment + Read more ... Does the DSP customer have dependent children? Yes, go to Step 2 No, go to Step 3
2	Has dependent children + Read more ... The current pension Income Test applies. For customers with dependent children, see: Income Test for single pension customers, or Income Test for partnered pension customers Procedure ends here.
3	Calculate the customer's assessable income before tax + Read more ... A summary of income and asset details the customer has previously advised will show on the Pensions Income and Asset Summary (PIAS) screen 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 this screen taking into account any corrected balances as advised by the customer Note: 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
4	Does the customer have employment income? + Read more ... Yes, go to Step 5 No, go to Step 6
5	Working Credit + Read more ... If the customer is eligible for Working Credit and in receipt of employment income, check the WC 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. For more information, see Working credits.
6	Adjusted income less than or equal to pension income free area limit + Read more ... Is the adjusted income less than or equal to pension income free area limit? For the pension income free area, see the Pension Income Free Area and disqualifying limits link on the Rates and thresholds page. Yes, there is no effect on the rate of payment, the maximum rate of pension is payable under the Income Test, see Step 1 in the Determination of pension rate payable table No, go to Step 7
7	If the adjusted income is more than the pension income free area limit, determine the affecting income + Read more ... Affecting income = (adjusted assessable income - pension income free area limit) x 0.50. Note: for current income cut-off limits, see Disability Support Pension - income test threshold for under 21 with no dependent children in Rates and thresholds.

Determining rate payable

Table 2

Step	Action
1	Determine the maximum rate amount payable (including Pharmaceutical Allowance (PhA) and if eligible, Rent Assistance and Remote Area Allowance) + Read more ... Note: a DSP customer with no dependent children is not entitled to the Pension Supplement until they turn 21 years unless they have dependent children. 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 full PhA then the amount payable will be the full PhA. The Resources page contains examples of rate calculations.
2	Compare the amount determined under the Income Test with the amount determined under the Assets Test + Read more ... If assistance is needed to determine entitlement under the Assets Test, see Assets Test for single pension customers. The customer's entitlement is the lower of the two amounts determined under the Income Test and the Assets Test. The customer will be subject to the Means Test under which the lower rate was calculated.
3	Customer affected by the Income test + Read more ... If the customer is affected by the Income test and: 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 the customer wishes to cease their pension due to having employment income and advises of this employment within 14 days, investigate if they are entitled to have their payments suspended. If the customer wants their payment suspended they are unable to use any Working Credits or the employment income nil rate period. For more information, see Commencing or returning to work or self-employment Disability Support Pension (DSP). Record details of assessment on a DOC.