Applying the Parental Income Test (PIT) for Assistance for Isolated Children (AIC) Scheme 108-02010030

The Parental Income Test is used to calculate entitlement to Additional Boarding Allowance (ABA). ABA is the only AIC Scheme allowance that is means tested.

Note: from 1 January 2017 to 31 December 2018 a Maintenance Income Test also applied. For historical information on how the Maintenance Income Test applied, see Maintenance Income Test (MIT) for ABSTUDY and Youth Allowance (YA).

Families eligible for Basic Boarding Allowance for a student can also be paid ABA if the student's annual boarding charges exceed the maximum rate of Basic Boarding Allowance less $250 for incidentals, and either:

• at least one of the student's parents qualifies for a PIT exemption, or
• combined parental income for the appropriate tax year does not exceed the PIT Upper Income Limit for AIC

For the PIT Upper Income Limit for AIC, see Assistance for Isolated Children (AIC) - Parental Income Test (PIT).

The PIT applies to the AIC applicant and their partner (if they have a partner).

If the student's parents are separated or divorced, determine who the approved applicant is and apply the PIT to that parent (and their new partner, if applicable).

The PIT will not apply for an AIC ABA student during the period where the applicant or their partner:

• receives a certain social security benefit or pension or a payment paid by the Department of Veterans' Affairs (DVA), listed in Module L of Section 1067G of the Social Security Act 1991 (for example, Service Pension, Income Support Supplement (ISS), Veteran Payment)
• receives ABSTUDY Living Allowance
• receives Farm Household Allowance (FHA)
• The applicant or their partner are not taken to be receiving an income support payment, and an exemption from the PIT will not apply if they:
• are serving an Income Maintenance Period that reduces their rate to nil
• are in an employment income nil rate period, or
• have an AGE/CZR PLS status (indicating receipt of Home Equity Access Scheme payments only)
• the student is in a State authorised care arrangement and their carer does not receive a foster care allowance or similar assistance for them

In these cases, the PIT is not applied to either person’s income and, subject to boarding costs, the student is entitled to the maximum ABA during the period.

Note: an additional exemption only applies to an AIC ABA student if the applicant or their partner holds a current Health Care Card or has a Health Care Card because they receive the maximum rate of Family Tax Benefit Part A. An exemption from the PIT will not apply:

• after the expiry date on the card
• where the applicant or their partner holds a Low Income Health Care Card (LIC)
• where the applicant or their partner holds a Health Care Card because they receive a social security Mobility Allowance or Carer Allowance (for a disabled child), or
• where the applicant or their partner holds only a Pensioner Concession Card or a Commonwealth Seniors Health Card

Any parental income above the Parental Income Free Area (PIFA) (see Assistance for Isolated Children (AIC) - Parental Income Test (PIT) is divided among the children within the family pool. The share of the parental income for each child will depend on the maximum amount of the payments for which that particular child is eligible.

A sibling is included in the family pool if they are in receipt of:

• Youth Allowance
• ABSTUDY Living Allowance
• ABSTUDY Group 2 School Fees Allowance (means tested component), or
• AIC Additional Boarding Allowance (ABA), or
• A sibling who meets the definition of an FTB child or regular care child and aged 0 - 15 or 16-19 and in full-time secondary study is also to be included in the family pool

All of the following payments will be included in the family pool where there is only one dependent young person in the family and they also receive more than one of the following payments:

• ABSTUDY Living Allowance
• Group 2 School Fees Allowance – means tested component
• Assistance for Isolated Children Additional Boarding Allowance, or
• Meet the definition Family Tax Benefit (FTB) child or regular care child

For example, where a child receives AIC ABA and meets the definition of a Family Tax Benefit (FTB) child or regular care child simultaneously, both amounts will be included in the family pool calculation.

The family taper of 20% is then applied to the child's share of the parental income above the threshold. This means that the rate of payment is reduced by the child’s share of 20 cents for each dollar of their parents' affecting income.

The References page contains links to policy for definitions of FTB Child, and Regular Care Child.