Low Income Health Care Card (LIC) income test 101-06040030

LIC entitlement is assessed on one of the following:

• customer's gross income for the 8 week period ending on the date of claim
• calculated start date, or
• 8 week period ending 28 days before the card's expiry date for renewals

For partnered customers, assess the combined income of both members of the couple.

The gross income for the 8 week LIC income assessment period must be under 100% of the qualifying limit applicable to the customer for all LIC claims including renewals. The income assessment for a LIC renewal is the same as a LIC new claim. See the Resources page for a link to the Services Australia website for LIC income limits.

The inclusion of any allowances paid with employment income depends on the allowance type and payment frequency. Some allowances are treated as exempt income and do not need to be included in the reported income.

For customers and/or partners whose income support payment (ISP):

• is current, the ISP is included as an income component
• has stopped within the 8 week LIC income assessment period:
• only record the income components from the Date Paid To plus one (DPT+1). This ensures that the income is not counted twice

Past period payments (arrears), Lump Sum Bereavement payments and/or advance payments paid within the 8 week LIC income assessment period are included in the LIC income test.

Note: there are different rules for lump sum leave or redundancy payments and lump sum compensation payments.

Documents that provide proof of income include:

• payslips
• an employer statement
• bank statements, and
• rental income details

Note: evidence for employment income must show the gross rate, before taxation and any personal deductions including voluntarily salary sacrificed contributions to superannuation. Income tax returns along with Profit and Loss Statements may be accepted for certain types of income. For example, when assessing sole trader income.

Although LIC is not subject to an assets test, the income derived from financial investments will be included. For example:

• deemed income from financial investments, such as bank accounts, managed investments and shares
• deemed income from account-based income streams
• income from income stream products, such as superannuation pensions and defined benefit income streams
• foreign income
• private trusts and companies
• lump sum payments such as redundancy, leave or termination payments
• compensation

These payments are included in the LIC income test:

• a social security pension or benefit paid to the customer or their partner within the meaning to the Social Security Act 1991
• if the person is receiving a social security pension or benefit within the meaning of the Social Security Act 1991 - the person's maintenance tested amount
• an ABSTUDY payment
• a pension payable under the Veterans' Entitlements Act 1986
• a payment received by a trainee in full-time training under a Labour Market Program, who is receiving JobSeeker Payment (JSP) or Youth Allowance (YA) (JobSeeker)
• payment of Self-Employment Allowance
• a payment of compensation within the meaning of section 17 of the Social Security Act 1991 (that is a lump sum and/or periodic payments, though they are assessed differently - see below)
• Language, Literacy and Numeracy Supplement (LLNS)
• Department of Employment and Workplace Relations, Pensioner Education Supplement (PES)
• Parental Leave Pay (PPL)
• Pharmaceutical Allowance (PhA)
• Pension Supplement (all 3 components)
• Rent Assistance (RA)
• Remote Area Allowance (RAA) (including RAA paid with ABSTUDY)
• Telephone Allowance (TAL)
• Training Supplement
• Work for the Dole (WFD) Supplement
• ABSTUDY PES
• Assistance for Isolated Children (AIC) Scheme PES
• Additional components of ABSTUDY, such as Boarding School Supplement and Additional Assistance
• Farm Household Allowance (FHA)

Note: Prisoner of War (POW) Recognition Supplement is exempt income for LIC purposes.

See the Services Australia website for more information on the income limits for LIC.

Scholarships are treated as income, unless specifically exempted. See Assessing scholarship income.

Compensation is assessed as income for LIC purposes. It is treated differently for LIC than it is for all other Centrelink payments and products. The ordinary income test is used to assess all compensation payments using the gross compensation amount (settlement amount without reduction).

Periodic compensation payments that are paid in the 8 week LIC income assessment period are included in the income test.

Lump sum compensation payments are apportioned over a period of 12 months and affect a customer's LIC eligibility for 12 months starting on the date of settlement. Any part of the apportioned income that coincides with the 8 week LIC income assessment period is included in the income test.

LIC customers are not subject to an Income Maintenance Period (IMP). Where the customer and/or partner:

• will be returning to the same employer after the leave period has ended, lump sum leave payments are assessed as part of the customer's employment income. See Leave and termination payments paid by an employer for more details
• is not returning to the same employer after the leave period has ended, lump sum leave payments and/or redundancy payments are apportioned over a period of 12 months from the date they are paid. Any part of the apportioned lump sum payment that is paid in the 8 week LIC income assessment period is included in the income test

A customer and/or partner who has an ISP rejected because they are subject to an IMP may claim LIC.

For LIC only customers and/or their partners, the DOV will be the start of the 8 week LIC income assessment period. Where there is a significant change in the value of the financial investment, additional entries may be needed to reflect the changes within the assessment period. Other income can be received from, but is not limited to:

• bank accounts including term deposits, bonds, debentures
• shares
• managed investments
• foreign income and foreign pensions
• existing self-employment, real estate and rental income which commenced before the start of the 8 week LIC income assessment period
• business, real estate or rental property income which commenced on or after the start of the 8 week LIC income assessment period. The DOV will be the:
• start date of the business, or
• date the property started generating income

Note: this does not include private trusts and private companies that are recorded by the Complex Assessment Officers (CAO). See Identifying and making suitable referrals to the Complex Assessment Officer (CAO).

For ISP customers and/or their partner receiving or claiming LIC

If coding financial investment or self-employment details for a customer and/or ISP partner receiving an ISP for the entire 8 week LIC income assessment period, primary benefit rules apply. See Coding income and assets for Centrelink payments and services and General notification provisions and exceptions have more details.

Multiple DOVs may apply for ISP current, cancelled, rejected, and/or assessed customers. See the Resources page for examples.

When a customer repays a debt to Services Australia and pays too much, the agency reissues the over recovered payment for the period of the debt. This is not included as income.

The LIC has a one year duration. During this period, a current LIC customer and/or their partner’s gross income must not equal or exceed 125% of the qualifying limit on an 8 week basis to retain their current card. The 125% income limit rule only applies to customers and/or partners who are not due to renew their card. This higher income limit is in place to assist customers employed on a contractual, seasonal, or casual basis.

Customers need to notify the agency of changes to their circumstances. If the customer's total gross income over any 8 week period is equal to, or more than, the 125% income limit:

• eligibility is reassessed, and
• entitlement to the LIC is cancelled

Customers can advise when starting work that their income will exceed the 125% income limit. They can choose to surrender their LIC immediately or wait until their income reaches the 125% income limit. In these cases, if an ISP is not being paid, record the customer's new income from the start date of their employment.