Assessment of income for Centrelink payments 108-05000000

ADF personnel receive a range of allowances as part of their employment, some of which are assessed as income for social security purposes. See the Resources page for a list of allowances and if they are considered as income.

The Australian Apprentice Support Payments provides direct financial assistance for Australian Apprentices undertaking a Certificate III level or above qualification in an occupation listed on the Australian Apprenticeships Priority List.

Australian Apprentices can apply for:

• The Australian Apprentice Training Support Payment where a full-time Australian Apprentice can receive $1,250 every six months for the first two years of their apprenticeship ($5,000 in total), a part-time Australian Apprentice can receive $625 ($2,500 in total)
• The New Energy Apprentice Support Payment for apprentices in the clean energy sector where a full-time Australian Apprentice can receive $2,000 every six months for the duration of their apprenticeship (up to $10,000), a part-time Australian Apprentice can receive $1,000 (up to $5,000 total).

The payments are treated as other ordinary income and recorded on the Other Income (OIN) screen. Record the income using type ‘OTH’ - Other and frequency ‘6MT’ - 6 Monthly.

See Recording other income on the Other Income (OIN) screen for help with recording details.

Children's bank accounts held in trust are covered by the assessment of private trusts from 1 January 2002. The delegation for the attribution decision rests with the Complex Assessment Officer (CAO). Attribution of control is based on the ordinary attribution principles of private trusts. If a customer is the legal controller and original source of the funds then 100% attribution will be to them. Deeming does not apply so do not code on the Savings Summary (SVS) - assess actual income (interest) and asset value.

Code simple bank accounts on the Other Income Summary (OINS) and the Other Asset Summary (OASS) screens of the controller.

For a series of investments assessed as belonging to a trustee, coding is on the Trust and Company (TAC) system.

If the customer is advising:

• of changes to an account already on the OINS screen, update as required
• for the first time of an account held in trust, request the account statements and ask the customer to complete the 'Assets held in trust for another person' form. See Requesting information (CLK).
  When documents are scanned for processing, refer to the Complex Assessment Officer (CAO)
• of changes to accounts treated as a trust for example, coded on the TAC system, refer to CAO

To refer to the CAO see Identifying and making suitable referrals to the Complex Assessment Officer (CAO).

Boarding and lodging describes accommodation in either a private home or shared accommodation, which may include meals.

See Income from boarders and lodgers for assessment of income received.

Assets held for investment purposes are classed as bullion if it is:

• gold, silver and platinum bar, ingot and nugget holdings, or
• coins, medals and decorations containing those metals

Its asset amount is a financial investment and deemed. Code information on the Direct Investments (SVDI) screen. For coding, see Coding income and assets for Centrelink payments and services.

Assets held for non-investment purposes are not classed as bullion if it is:

• jewellery or contemporary Australian currency which has gold, silver or platinum, or
• coins, medals decorations containing those metals

Non-investment bullion may be an assessable asset and no income is assessed.

Medals of valour can be an exempted asset.

For Information on the assessment of business income, see:

• Income and expenses of a business
• Assessing sole trader income
• Assessing partnership income
• Assessment of income from trust and companies

Financial assets included in cash and money in deposits are assessable assets under deeming provisions, regardless of any interest these investments are earning:

• cash amounts, including cash on hand and in safety deposit boxes, regardless of where the cash was acquired
• money on deposit regardless of when the accounts were opened, including bank, building society, credit union accounts and investments with government bodies

Code income and assets for:

• overseas bank accounts, cash, term deposits and bonds, on the Direct Investments (SVDI)
• Australian bank account deposits on the Select Product (SVP)

The Community Development Employment Projects (CDEP) Scheme stopped on 1 July 2015. CDEP income had 2 components for Services Australia purposes:

• CDEP Wages: was the most common type of CDEP income and was paid to CDEP participants at similar rates to JobSeeker Payment (JSP). CDEP Wages precluded any payment of JSP or Youth Allowance (YA). CDEP Wages were coded on Other Government Payments (OGP). See Coding income and assets for Centrelink payments and services
• CDEP Other Income: this was non-standard remuneration sometimes paid to CDEP participants because of profit sharing agreements or for other duties. CDEP Other Income was treated as ordinary income and was coded on Other Income (OIN) as type 'CDO' - CDEP other Income. See Recording other income on the Other Income (OIN) screen

For more information, see Community Development Employment Projects (CDEP).

Various payments are commonly called compensation. How each payment is assessed depends on its type and reason for payment.

• Social security law has a special means test for compensation paid for personal injury and is at least in part for economic loss. If a social security payment is directly reduced, recovered or precluded because of a compensation payment, it cannot additionally be assessed as the person's income, except for the Low Income Health Care Card (LIC). Decisions about how a particular personal injury compensation payment is assessed should be made by a Service Officer in a Compensation Recovery Team
• Customer receives money to compensate for the loss of or damage to their buildings or personal effects, or to repay debt (for example, consumer credit insurance), the payment is not treated as income and is an exempt asset for social security purposes:
• If the payment is invested, money earned on the investment is not deemed under the income test for an initial exemption of up to 12 months after the person receives the payment. An additional 12 months extension may apply for loss or damage of customer's principal home if certain criteria are met. For more information on exemption, see Temporary vacation of principal home. The payment is not an assessable asset. Assessment details can be found in Exempt lump sums
• Lump sum compensation payment paid to a customer for personal injury is not exempt from the assets test. The recipient may also be subject to a compensation preclusion period. See Compensation as Income for assessment details
• Ex-gratia payments made to a prisoner of war (POW) or civil internee of the Japanese or Europeans during World War Two (WW2) or the Koreans during the Korean War. These are one-off payments of $25,000 to service personnel and civilians, or their widows or widowers. See Exempt Assets
• Restitution Payments are made by various governments (for example, Germany, Austria, The Netherlands) to victims of Nazi persecution and may be exempt from the income test

For more information, see:

• Compensation as Income
• Treatment of periodic compensation payments
• Lump sum compensation payments
• Compensation Recovery Teams
• Role of staff outside Compensation Teams

Did the customer purchase the bottles/containers themselves?

• Yes, the refund received by the customer is not assessable income for income support payments
• No, assess the refund as business income, less any allowable business expenses. This is not a refund because the customer did not pay anything for the bottles

Customers can earn an income through different activities where a service is provided in exchange for money, tips or donations. This is known as content creation or the sharing or gig economy.

Income may be earned as an employee or through self-employment within a business structure. To determine how to assess the person’s activity, see Self-employed or employee?

Where a person is determined to be self-employed and provides services using a number of different related platforms, treat this as one business. See Offsetting profit and losses between businesses.

A customer may advise that they are involved with a platform that is not listed. In these cases, use the information and descriptions provided to determine how it should be assessed:

Providing transport services, which usually involves:

• the use of the person’s car, and
• work can be undertaken on a flexible basis at the discretion of the person

Popular platforms include Uber, DiDi or Lyft. See Income for an independent contractor and commission income.

Providing short-term accommodation may be:

• at the person’s home, or
• a separate property they own

Popular platforms include Airbnb, Booking.com or Stayz. See Income from boarders and lodgers.

Making and providing free or subscription based content. This may be through social media websites as an ‘influencer’, streaming or creating videos or other content. Popular platforms include Facebook, Instagram, Twitter, TikTok, YouTube, Twitch, Patreon or OnlyFans.

Providing food delivery services, usually involves:

• the use of the person’s car, and
• work can be undertaken on a flexible basis at the discretion of the person

Popular platforms include Uber Eats, DoorDash or Menulog. See Income for an independent contractor and commission income.

Sharing personal belongings for a limited time in exchange for money. Popular platforms include Camplify, Uber Carshare, Turo, Spacer or Toolmates.

Providing creative or professional services

Providing creative or professional services, including:

• graphic design
• creating websites ,and
• doing odd jobs

Popular platforms include OneFlare, Mad Paws, Airtasker or Fiverr.

Assessment of contract and commission income depends on the nature of the customer’s employment situation and the payment received.

For more information, see Income for an independent contractor and commission income.

The final quarterly DSAP payment was made in April 2008. As these payments are taxable in the financial year in which they are received, the 07/08 payments were assessable until 1 July 2008.

Payments received under DSAP are income for social security purposes:

• if a customer is still involved in a primary production business, the income is assessed as business income received from primary production. This means that any DSAP amounts received was added to the total of the business' income. The usual deductions under section 1075 of the Social Security Act 1991 was allowed. This applies regardless of the primary production business continues to carry on a dairy enterprise or not
• if a customer is no longer involved in a primary production business but still receives DSAP payments, the payments are treated as the income of the individual. This means section 1075 of the Social Security Act 1991 deductions do not apply
• if a customer still receives DSAP payments, and is only involved in a business which is not involved in primary production, the payments are treated as the income of the individual and section 1075 of the Social Security Act 1991 deductions cannot be allowed
• if payments are classed as income from a primary production business, these amounts could be offset against losses in any necessarily related primary production activities

Note: the way DSAP payments were treated for social security purposes applies regardless of how the payments may be recorded in income tax returns (that is, if they are recorded as individual income or as income of a primary production entity).

Debentures are secured by a loan over certain assets of the borrowing company. They usually have a fixed:

• maturity date
• capital value
• rate of interest, payable quarterly

Interest on deferred interest debentures:

• is deferred until maturity
• may be calculated on a compounded basis, which means that it is calculated, not only on original capital, but also on the interest previously earned

Unsecured notes are unsecured because no assets are charged as security for the loan.

Debentures and Unsecured Notes are coded as Direct Investments (SVDI), see Coding income and assets for Centrelink payments and services.

A statutory body usually holds, on behalf of the deceased person's dependants, awards of worker's compensation or damages made after the person's death. Any interest paid on funds held by the statutory body may affect the dependent's entitlement to a pension or benefit.

In some jurisdictions, pensions are paid to the surviving partner of a deceased worker by the workers' compensation authority and transport accident authorities. These pensions while compensatory in nature are not regarded as compensation and should be assessed as ordinary unearned income for the recipient.

Note: payments made in respect of children who were formerly dependant on the deceased are not treated as income. However, they may affect the child income deductions for those children.

Example: The Dust Diseases Board (DDB) pays a surviving partner ongoing periodic payments. Treat the ongoing periodic payment as ordinary income and record on Other Income Summary (OINS) using type 'OTH' - Other.

For information on the treatment of weekly DDB payments made to an injured worker (rather than a dependant), see The effect of compensation on Social Security payments.

• Service Pensions, for customers current as of 1973 are treated as income, if the customer has maintained their entitlement since 1973 to both Service Pension, and social security pension
• Customers granted a Service Pension since 1973 cannot receive a social security pension or benefit
• Service Pension amounts received by the partner of a social security customer are not treated as income
• Veteran Payment recipients cannot receive a social security pension or benefit
• Disability Pensions are treated as income
• Disability Pension payments for children are not treated as income and do not affect the additional free area for dependent children
• Loss of Earnings Allowance is treated as income
• War Widows or Widow(er)'s Pension is treated as income if either:
• Multiple entitlement exclusion does not apply
• Income Support Supplement not paid
• Income Support Supplement (ISS) recipients cannot receive a social security pension or benefit
• Adequate Means of Support (AMS) payments and AMS payments to a disability pensioner's invalid child are both treated as income
• Orphans Pension is not treated as income and does not affect the additional free area for dependent children
• Other Allowances from DVA are not treated as income
• The receipt of a Prisoner of War (POW) ex gratia payment of $25,000 is not treated as income in the year of receipt. This payment is for POWs and civil internees of the Japanese or Europeans during World War Two, or of the North Koreans during the Korean War. If all or any of the payment is added to the rest of a customer's financial investments it will attract deeming. If it is used to purchase an income stream, the income is assessed. It is an exempt asset for life. For more information, see Exempt Income
• Assessable DVA payments on Veteran Affairs Pension (DVA) for all payment types. For coding, see Coding income and assets for Centrelink payments and services

Employment income is ordinary income for which a customer has actually done some work.

This includes:

• wages
• cash payments
• supported wages
• salaries
• stipends
• sales commission
• honoraria
• bonuses
• penalty rates or overtime
• salary amounts voluntarily sacrificed to superannuation, and
• leave payments received in relation to an employee/employer relationship if the customer is still engaged on an ongoing basis

For information on the assessment of employment income, see Assessment of employment income for Centrelink payments.

For customers receiving family assistance, check their annual income estimate is reasonable and request a revised estimate, if necessary.

Ex-gratia payments are payments made by an individual, organisation or government without obligation, usually as a sign of goodwill or kindness.

Common ex-gratia payments are government grants or other relief following a natural disaster or event that warrants a special payment. These payments are also known as grants.

Some ex-gratia payments are not assessable, examples of these can be found in Exempt income. If an ex-gratia payment or grant a customer has received is not listed, refer the case to the Level 2 Policy Helpdesk for advice.

Assessable ex-gratia payments are recorded on the Other Income (OIN) screen using type EGP - Ex Gratia Payments. See Recording other income on the Other Income (OIN) screen for more information.

Assessable foreign income includes all income received from another country or from a specific source in another country. This may be in the form of investments, pensions, super or real estate.

Treat the gross current rate of overseas income as income for social security purposes if the payments are made from overseas, or through an Australian agent. No amount is deducted for any bank charges.

Exceptions: Some of Australia's international social security agreements have provisions to disregard some components of overseas pensions from the income test. Restitution pensions are also exempt from the income test.

Foreign investments such as bank accounts, shares and other financial investments are subject to deeming provisions. Note: code foreign investments, including bank accounts on Direct Investments (SVDI).

Record foreign shares and securities on the Shares and Investment (SIN) system. Shares that have already been listed are on the Select Product (SIP) screen.

Record foreign managed investments on the Managed Investments (MIN) system. Managed investments already listed are on Managed Investment Product List (MIP). For help with coding foreign managed investments, see:

• Managed investments - updating existing investments, or
• Managed investments - adding a new investment

Foreign Income (non-pension) is coded on Foreign Employment Income Paid (FEIP), see Foreign income and assets.

Code foreign pensions on Foreign Pension Details (FPD). See Coding income and assets for Centrelink payments and services or Foreign income and assets.

One-off gifts are exempt as income for social security benefit, social security pension and ABSTUDY payments. Code on Other Income Summary (OINS) as an exempt lump sum.

If invested, these investments are assessed under the deeming provisions.

For help with coding invested amounts, see Coding income and assets for Centrelink payments and services.

Regular (on-going) payments given by an immediate family member:

• from 1 July 2017, any periodical payment or benefit by way of gift or allowance from an immediately family member (parent, child, brother or sister) will be considered exempt income for all social security benefits and ABSTUDY (except Special Benefit), aligning with current rules applied to social security pensions
• are not assessed as income for Low Income Health Care Card (LIC) or Commonwealth Seniors Health Card (CSHC) purposes and are not coded on OIN
• are not assessed as income for social security income support payment (except Special Benefit) and are not coded on OIN. Record details on a DOC or NOTE. No coding of income is required

Regular (periodic) payments given by another source are:

• assessed as income for income support payment, Low Income Health Care Card and ABSTUDY purposes, and
• coded on the OIN screen using type 'GIF' - Gifts

See Recording other income on the Other Income (OIN) screen.

Loan payments received under the Home Equity Access Scheme (the Scheme) are not treated as income for the purposes of payments and concessions administered by the agency. The Scheme loan payments are non-taxable.

Customers may receive a range of benefits paid through different policies as a result of sickness, injury, temporary or permanent incapacity.

These benefits may be paid through a superannuation fund, an insurance company, or their employer.

See Income from personal injury insurance schemes and disability benefits for more information.

Indigenous customers may receive income from a variety of sources. The policy relating to the treatment of this income may be specific to Indigenous customers (for example, native title claims) or under general policy relating to the assessment of income for example, income received to cover expenses.

The following list is not exhaustive and staff must see a customer's documents to determine the correct social security treatment:

Income received by Indigenous customers in return for services rendered is considered income for social security purposes.

Examples of payments for services rendered:

• Performing a Welcome to Country
• Cultural training
• Interpretation
• Heritage surveys
• Site clearances
• Consultancy fees

Assessment of the income depends on the nature of arrangement in which the income is generated. For assistance with determining if the customer is self-employed or an employee, see Self-employed or employee?

Where the customer is self-employed and generates income in a business-like manner with the intention of making a profit, assess the income as self-employment income, allowable deductions may apply. See Assessment of income and assets from business structures for Centrelink payments.

Where the customer is not self-employed, assess the income as employment income for a period equal to the period that the income represents. Where the income is not paid in respect of a particular period, see Recording and correcting employment income details. Assess lump sums received as remunerative lump sums, see Treatment of lump sums.

Gate takings are contributions or fees from people accessing traditional Indigenous land. Gate takings are assessable income only when made to individual customers. If the payment is paid as a lump sum, they are considered a non-remunerative lump sum and the income is maintained for 12 months from the date the payment is made.

See the References page for a link to Guide to Social Security 4.3.9.50 which outlines the assessment of native title claims. It is likely that any payments resulting from successful native title claims will be made to communities rather than individuals. When a payment for a successful native title claim is made to a community and used by the community, the payment is not assessed as income. If individual customers receive compensatory amounts, either from the community or the compensation payer, Services Australia Helpdesks should refer the details to the agency's Means Test Policy Section for guidance.

Payments made to cover out-of-pocket expenses for attendance at meetings with state government agencies are not considered to be income, see Allowances paid with employment income.

Royalties paid to Indigenous people are treated as income if paid to a member of an Indigenous community. If paid to a community and used by the community, they are not treated as income. However, if the royalty payment was paid directly to an Indigenous community and then distributed to individuals in that community, the payment is to be coded on Other Income (OIN) screen.

• Record the details using income type ‘ROC’ - Royalty and Commission and frequency ‘ANN’ - Annual
• Income is assessed for a period of 52 weeks from the date received
• Do not record Work Bonus Income % for this income as the income is non-remunerative
• See Recording other income on the Other Income (OIN) screen for details with coding the Other Income (OIN) screen

Payments paid to an individual to sit on a committee or a council. These amounts are assessed as allowances paid with employment income and are not considered income. Note: any amount received that exceeds the expense incurred, is assessed as income.

Treatment of the income received from the sale of arts and crafts depends on the nature of the arrangement.

If the customer undertakes the activity as a hobby and does not intend to use the activity as a source of income, assess payments received as hobby income, see Income and expenses of a business.

If the customer undertakes the activity in a business-like manner with the intention of making a profit, assess the income as self-employment income. See Assessment of income and assets from business structures for Centrelink payments.

An income stream is a regular series of payments, which may be made for as long as the customer's (or their partner's) life or for a fixed term. The income stream may be purchased with a capital sum or made directly from accumulated superannuation contributions.

The 3 assessment categories of income streams are:

• asset-test exempt streams, that ensures a steady draw down of income and capital underlying the income stream
• income streams purchased from 20 September 2004 and before 20 September 2007 that meet the characteristics for assets test exemption will be 50% asset-test exempt. Any asset-test exempt income stream purchased before 20 September 2004 continues to receive a 100% assets test exemption
• all income streams purchased on or after 20 September 2007 are fully assets tested. Exceptions: Defined benefit income streams continue to be 100% asset-test exempt irrespective of start date. In a limited number of circumstances, certain ATE income streams purchased before 20 September 2007 that are commuted and rolled over into post 20 September 2007 ATE income streams are allowed to retain a 100% or 50% asset test exemption (whichever is applicable), provided certain conditions are satisfied
• asset tested income stream (long term), that allow access to capital but are still for a reasonably long term (more than 5 years)
• asset tested income stream (short term), that allow access to capital and are of short term (5 years or less). These are deemed under the income test

Note: both asset-test exempt and assets tested income streams (long term) can have a term of 5 years or less, if the investor's life expectancy is 5 years or less.

Types of income streams include:

• Account-based pension (Allocated Pension) Annuity
• Immediate Annuity (lifetime purchased before 1 July 2019, life expectancy or term)
• Superannuation Pension (non-defined benefit, can be lifetime or life expectancy)
• Defined Benefit Superannuation Pension (for example, ComSuper pension)
• Market-linked Pension/Annuity
• Lifetime pooled income streams

Take care when determining the product type the income stream fits into for coding purposes. The product types on the system are:

• Account-based income stream
• Lifetime income stream (purchased before 1 July 2019)
• Lifetime pooled income stream - non superannuation
• Lifetime pooled income stream - superannuation
• Life Expectancy income stream
• Market-linked income stream
• Term income stream
• Defined benefit income stream

Code income stream products on Pension/Annuities Summary (SUPS) and Pension/Annuities Identification (SUPI), see Income streams.

Assessment of leave and termination payments received depends on:

• the customer’s employment situation
• if there is a temporary absence from employment
• the type of payment the customer and/or their partner receives

See Leave and termination payments paid by an employer for more information.

Money received by the way of a legacy or inheritance is not treated as income if received as a lump sum or by instalments. All payments of a legacy are considered one-time, lump sum payments and not payments of a recurring nature. See Exempt lump sums for more details.

However, the amount received may affect the customer's financial assets and extended deeming applies to a person's financial assets.

Update record with change of details for financial assets.

For more details and help with coding, see:

• Coding income and assets for Centrelink payments and services
• Changes which may affect the Parental Income Test (PIT)
• Deeming provisions

Conventional life insurance policies:

These policies are principally 'pure endowment', 'endowment' or 'whole of life'.

Bonuses on conventional life insurance policies are not assessed as ongoing income during the term of the policy. On maturity, however, the difference between the maturity payment and the sum of the purchase price and premiums paid by the investor is assessed as income for 12 months from the date the policy expires.

Record the assessable income on the Other Income (OIN) screen using type ‘OTH’ - Other. Record with frequency ‘ANN’ - Annual to assess for 52 weeks. See Recording other income on the Other Income (OIN) screen for more information.

Deeming does not apply to conventional life insurance policies, as they do not fall into the definition of financial investments. The surrender value of the life insurance policy is to be assessed under the assets test for the term of the policy.

For coding of assessable assets from conventional life insurance policies, see Coding income and assets.

Note: unbundled life insurance (or a Universal Life Plan) is not treated as conventional life insurance as they are a form of managed investment. For more information, see Managed investments - adding a new investment.

For more information about the treatment of conventional life insurance policies, see questions and answers in Treatment of lump sums.

Whole of life superannuation policies:

Some 'whole of life' life insurance policies are actually superannuation policies offered by the insurance companies, and are therefore subject to the same rules as other superannuation funds, see Superannuation. They are different from whole of life conventional life insurance products, which are asset, tested but not income tested. The policy documents will indicate if the policy is a superannuation policy, for example, MLC Whole of Life Superannuation, AMP Endowment Personal Super Plan.

Being a superannuation fund, it should be coded only if customer is of Age Pension age or over.

The amount coded on Managed Investments (MI) or the Unregistered Managed Investments (MIUS) is the 'Accumulated Superannuation Benefit' shown on the customer's latest statement of account and not the amount payable from the policy in the event of the death of the insured party.

For coding, see Managed investments - adding a new investment.

Life interest in property:

• a customer may have a life interest in property that may involve real estate, investments or even a business. The income received by or credited to the customers for their own use is included as income and is coded on Other Income (OIN) screen using type 'LIF' - Life Interest. See Recording other income on the Other Income (OIN) screen
• if the life interest is created by the person, their partner or upon the death of their partner then the actuarial value is to be assessed as an asset and this will be assessed by a Complex Assessment Officer (CAO)
• if a customer only has the right to occupy a property in which they have a life interest, they are not automatically entitled to income from rent. This depends on the terms of the bequest

For more information, see Life interest in an asset or income.

Loans are assessed as a financial investment and as such are subject to deeming provisions. Examples of loans for deeming include:

• bonds
• bank bills, commercial bills and promissory notes
• loans to family members
• loans to private trusts and private companies
• loans to any other individual, group or corporation

Code loans on the Direct Investments (SVDI) screen. See Coding income and assets for Centrelink payments and services.

Note: loans to private trusts and private companies are coded by the Complex Assessment Officer (CAO) in the TAC system.

The Minister for Social Services can exempt investments and loans from the deeming provisions. Applications are processed by the Exemptions Officer in the Department of Social Services. Investments exempt from the deeming provisions are assessed for income test purposes using the actual rate of return.

The NSW State Government’s:

• Independent Living Allowance (ILA) is a payment to help eligible young people who have recently left out-of-home care to help them with accommodation and essential living expenses. Payments are paid by the Department of Communities and Justice
• Aftercare Allowance is paid at the same rate as ILA and is for old period who have left out of home care

The allowances cannot be received at the same time and are treated as other ordinary income and recorded on the Other Income (OIN) screen. Record the income using type ‘OTH’ - Other and frequency ‘2WE’ - Two Weekly.

See Recording other income on the Other Income (OIN) screen for help with recording details.

Parental Leave Pay (PPL)

For children born or entering care:

• on or after 1 October 2016, Parental Leave Pay (PPL) is counted as ordinary income for income support purposes
• before 1 October 2016, PPL was not counted as income for income support purposes

For further information, see Coding income and assets for Centrelink payments and services.

For additional information about PPL, see Paid Parental Leave (PPL) for children born or entering care on or after 1 July 2023.

The capital component of a property settlement is not assessed as income if it is received as:

• a one-time payment
• regular repayments of the capital component of the property settlement

These payments are repayments of the customer's own property. However, the settlement proceeds may be considered as a financial investment if invested and, therefore, be assessed under current deeming provision rules.

A property settlement may be received in regular instalments and the order or agreement may provide for interest to be paid on the outstanding balance of the settlement. The interest is assessed as income throughout the period that it accrues.

The outstanding balance of a property settlement is reviewed at the same time as an income review is made. Any interest payable on the outstanding balance is assessed as income throughout the period in which it accrues.

The outstanding balance of a property settlement is an asset. Example: A property settlement of $300,000 was awarded to the customer. This is to be paid in instalments of $20,000 pa. The $20,000 pa is exempt income but the $300,000 is an assessable asset minus any amount paid, that is, reduced by $20,000 pa. This is recorded as type 'OTH' - Other on the Other Assets (OAS) screen. See Coding income and assets for Centrelink payments and services for details with coding the OAS screen.

Assets hardship may be payable depending on the customer’s individual circumstances if the normal requirements are met and the $20,000 does not get included as income under the assets hardship income test. See Unrealisable assets under the Assets Test hardship provisions.

Royalties can be remunerative or non-remunerative depending on the source of the payment, characteristics and the purpose of the payment.

For assessment of royalties received by an individual from a community, for example, royalties paid to an indigenous community that are then distributed to individuals in that community, see Table 1, Item 23.

If royalties are paid to an employee:

• they are treated as employment income, see Assessment of employment income for Centrelink payments

If royalties are paid to someone who is self-employed and:

• the person operates a business where the royalties are part of the customer’s usual business income:
• Income from royalties is assessed as business income and record on the Real Estate and Business Summary (REBS) screen
• The gross income of the business, including royalties, can be offset by allowable expenses
• the royalties are one-off income which are not part of usual business income:
• Income is assessed as a lump sum and recorded on the Other Income (OIN) screen
• Income is assessed for a period of 52 weeks from the date received
• Record using income type ‘ROC’ - Royalty and Commission and frequency ‘ANN’ - Annual
• Record the net amount of income after allowable expenses have been deducted
• See Recording other income on the Other Income (OIN) screen for help with recording details

Note: if the customer is eligible for the Work Bonus this may be used to reduce assessable income from royalties. For employment income, Work Bonus is automatically applied. For self-employed customer’s, it must be determined if the income has been received from personal exertion.

• Code the Work Bonus Income % on:
• the Business Detail (BUS) screen if part of customer’s usual business income, or
• the OIN screen if one-off and not part of usual business income
• Work Bonus is then applied only to the percentage of income earned from personal exertion

Generally, scholarships are treated as income or as 'valuable consideration'. This includes scholarships paid directly to a student or to a third party (usually the school) in respect of a student.

Assess the income as an annual amount, with a review coded to take the income off at the end of the period.

Teacher Training Scholarships

If a teacher is undertaking studies, any teacher training scholarship received for them or their partner is assessed as income. Any additional allowance in respect of dependent children, reduces the additional free area for dependent children. Any allowance paid to the student child is the child's own income.

Exemptions from the income test:

Non-discretionary fee-waive or fee-pay scholarships will not be counted as income under the Social Security Act 1991. This means the value of these scholarships is no longer taken into account when applying the income tests for pensions and allowances, including the Personal income test for Youth Allowance, Austudy and ABSTUDY, or for the primary payment of Pensioner Education Supplement (PES) recipients.

• A fee-waiver scholarship is one where an education institution reduces or waives part or all the course charge or fee
• A fee-pay scholarship is one provided by an external provider (for example, a business, charity, government department) to pay for tuition fees

Additionally, some scholarships that fully or partially waive or reduce board and/or lodging may be exempt from the income test.

Commonwealth Learning Scholarship is not assessable as income. There are 2 types:

• Commonwealth Education Costs Scholarships
• Commonwealth Accommodation Scholarships

Approved scholarships awarded within Australia are assessed as income however any additional allowance, which is a reimbursement of 'out of pocket' expenses, is not assessable.

Approved scholarships awarded outside Australia are not assessable as income.

For more information about scholarship income, see Assessing scholarship income.

Self-employment income is income received either through:

• operation of a business as a sole trader, or
• involvement in a partnership, private trust or private company

For more information, see Assessment of income and assets from business structures for Centrelink payments.

Public company shares are classed as a financial asset, and therefore income from shares is assessed under deeming rules. See Deeming provisions.

Note: see Trusts if the shares are held in trust for another person, for example a child or grandchild.

For coding shares, see Adding shares and securities.

• The asset value of shares is their market value, not their face value
• The market value of shares is held on Securities and Investments Summary (SIS). The market value on a customer's record is updated at the customer's request and automatically during bulk updates

The total asset value from the SIS tags over to the Financial Investment Summary (IVIS). The IVIS shows the total amounts of the customer's financial investments and the deemed income calculated. The total value of the shares to be deemed appears on the Financial Investment Summary (IVIS).

If a public company is not listed on SIS, obtain all the relevant information from the customer and contact the Financial Industry and Network Support (FINS). They will provide help in calculating the value of the shares. Code unlisted shares on the Unlisted Public Securities (SIUS). See Adding shares and securities.

Note: private company shares are assessed differently, they are assessed by a CAO. See Assessment of income and assets from trusts and companies. Share traders may also be assessed differently, see Share traders.

Solar energy feed in tariff rebates occur when a customer with solar power sells energy to the provider. The customer receives a direct payment or credit for the excess energy sold.

Solar feed in tariff payments are assessed as income (for example, they receive a cheque or direct deposit from the energy provider). They are treated as non-remunerative lumps sums and assessed for 52 weeks from the date of receipt on Other Income (OIN) screen as type 'OTH' - Other. See Recording other income on the Other Income (OIN) screen for details with coding.

There are no deductions allowed against this income unless the customer is running a business.

The assessment differs in situations where the customer is considered to be running a business. In that case, normal business expenses can reduce the amount of income assessed.

Feed in tariffs are paid as credit amounts or discounts, and the amounts are generally small. These amounts of credit or discounts are not assessed as income.

This policy applies from the date of announcement by the Minister, 14 May 2010. Before that the assessment of income included credits or discounts.

One-off Federal Government financial incentives for the capital costs of installation of solar energy systems and hot water systems are also not counted as income.

From 1 January 2012, eligible South Australian (SA) residents may be able to receive a concession of up to $158 per year on their household energy bills, to help with electricity and gas payments (including LPG bottled gas).

The scheme is administered by the SA government.

The concession will usually be a discount or credit amount on a customer's energy bill. The amount of credit or discount is not assessed as income.

South Australian customers living in residential parks may receive a lump sum concession payment (for example, a cheque or direct deposit) to help with household expenses, which includes an amount for energy. If this occurs, the payment is treated as a non-remunerative lump sum and assessed for the applicable period (that is, if paid quarterly, assess over 13 weeks, if paid annually, assess over 52 weeks) from the date of receipt.

This income is coded on Other Income (OIN) screen as type 'OTH' - Other. See Recording other income on the Other Income (OIN) screen for details with coding.

Full details and eligibility requirements are on the SA government website. A link to the website is on the Resources page.

Normally spousal maintenance from a legally enforceable agreement, is not assessed as ordinary income under the income test for income support purposes. However, it is taken into account under the Maintenance Income Test for family payment purposes. See Exempt Income.

However, in cases where the arrangement to pay spousal maintenance is not documented in a legally enforceable manner, use the gross amount of income to assess the payer's rate of income support. For example, where the only evidence of any arrangement is a verbal agreement or statutory declaration. In these situations, income is coded on the Other Income (OIN) screen as type 'OTH' - Other. See Recording other income on the Other Income (OIN) screen for details of coding.

These include payments to a minor such as:

• third party motor vehicle damages
• workers compensation following the death of the sole surviving parent
• superannuation following the death of the sole surviving parent
• any interest credited to the minor's account from the statutory trust

Income received is the minor's income, and therefore not assessable for the customer.

For more information, see:

• Protective and statutory trusts for persons unable to handle their own affairs
• Trusts

The following information does not relate to income streams for example, pensions from a superannuation fund or annuities. See Income streams.

Superannuation is an investment for a person's retirement, to provide beneficiaries of the scheme with financial resources during their retirement years. Money is accumulated during the person's working life in specialised accounts. Employers also have an obligation to contribute superannuation on behalf of their employees at legislated rates.

Since 20 March 1993, all superannuation and rollover investments for customers of Age Pension age are assessed as income and assets. Superannuation investments are assessed under deeming rules once the customer reaches Age Pension age and are coded on the Managed Investments (MIN) cluster of screens. See Managed investments - adding a new investment.

Superannuation in the accumulation phase held by customers under Age Pension age is not assessed under the income test or assets test. Information relating to superannuation is not to be obtained or recorded unless the superannuation owner is within 13 weeks of reaching Age Pension age.

Superannuation investments in the draw down phase, where customers receive ongoing income from a superannuation investment, for example, a pension or annuity is assessed as an income stream regardless of the customer's age. See Income streams.

From 28 December 2002, new laws allowed the Family Court, or parties to a property settlement, the power to split superannuation. The laws also gave the Court the power to 'flag' a superannuation interest for future splitting.

Most splits of superannuation in the accumulation phase will involve customers under Age Pension age, and as superannuation in the accumulation phase is exempt for under Age Pension age customers, splits should have no effect on income support entitlements. If superannuation in the accumulation phase is split for customers who are of Age Pension age, update the customer's changed superannuation details in the usual manner. See Assessing superannuation.

If a customer receives an amount as part of a super split, the amount will be treated as an exempt lump sum payment, not as income. Update the customer's record accordingly if all or part of the amount has been reinvested in assessable assets or other financial investments. For example, deposited in a bank account or used to purchase a vehicle. For help, see Coding income and assets for Centrelink payments and services.

Amounts withdrawn under the First Home Super Saver (FHSS) Scheme are disregarded when calculating a person's taxable income for Services Australia payments, supplements and services. The Australian Taxation Office are responsible for administering the scheme.

Winnings can be obtained by chance (for example, lottery, scratch-it cards, roulette), by skill (for example, professional sportsperson), or a mixture depending on ability (for example, those who gamble on horse races or play cards).

Individual chance winnings (such as lump sum lottery wins) are exempt lump sums, regardless of how many times they occur, because they:

• are unlikely to be repeated (every bet is less likely to win than lose, the frequency of gambling does not change this)
• cannot be reasonably expected to be received or necessarily anticipated (this is evident where odds are less than 100%), and
• do not represent receipt of money for services rendered directly or indirectly

The only exception is when a prize won by chance is paid periodically, for example, scratch-it cards where regular payments are made, as opposed to a single lump sum, in which case, income is assessed as the amount received each period for the duration of that period. For instance, someone receiving $1,000 on the first day of each month would have $1,000 per month recorded until 1 month after the last payment. For this:

• Record the income on the Other Income (OIN) screen using type ‘OTH’ - Other
• Use the frequency that the amount is received as the income frequency
• See Recording other income on the Other Income (OIN) screen for details with recording income

These periodic chance winnings cannot be reduced by ‘losses’ in the form of previously unsuccessful ticket purchases. This is because these winnings are not the result of a customer using their skill to earn an income through a business structure.

Winnings earned by the skill of a customer undertaking their profession, for example, a sportsperson or professional gambler (usually declared on tax returns as such) are assessed as income. They may be considered as running a business as a sole trader (or in partnership), in which case an annual rate of income is determined, based on winnings less expenses, which include verifiable losses.

Ask customers who frequently gamble on horse races or cards. If they intend to try to use their skill as a major, if not principal, income source. If so, they should be treated as running a business and asked for regular (for example, annual) profit and loss statements. (Note: losses are valid expenses only when income is assessed as part of a business structure). A one off win in an area outside of the customer's profession is an exempt lump sum. For example, if a customer who is a professional poker player won $100 for best cake decoration at a show, this is not assessable income.

Regardless if the winnings are assessed as income or not, the resulting assets are assessable under the normal assets test. Deprivation is assessed if the winnings are gifted, and deeming is applied if they are held as financial assets. For example, a customer may frequently play roulette at the casino. Their wins are exempt but they are still obliged to notify any change in cash on hand, bank balances, and other assets.

Inexplicable gambling behaviour may indicate a need to investigate other Means Test issues, for example, gambling on behalf of others for a payment (employment income), or unaccountable losses (previously hidden income or assets).