Changes which may affect the Parental Income Test (PIT) 108-02020000

The PIT is applied to dependent ABSTUDY, Youth Allowance (YA), Tertiary Access Payment (TAP) and Assistance for Isolated Children (AIC) Scheme Additional Boarding Allowance (ABA) customers or students, unless a PIT exemption is applied. Changes in family circumstances may affect the application of the PIT.

Factors that may affect entitlement to, or rate of, payment include:

• who is regarded as a parent/guardian for the purpose of applying the PIT. See Policy advice in References
• the combined parental income of the appropriate tax year
• the parental income free area
• the number of, and changes to, other dependent children in the family pool (YA, ABSTUDY and AIC only)
• whether a parent(s)/guardian(s) is receiving a payment or service which qualifies for a PIT exemption (YA, ABSTUDY and AIC only)

Some of the most common changes to parent(s)/guardian(s) circumstances that can affect the PIT include:

• change in relationship status
• change in custody of dependent children
• parent(s)/guardian(s) take an overseas absence or permanently reside overseas
• death of one, or both, parent(s)/guardian(s)

This can also include where the dependent customer, or student, decides to live with the other parent.

Other changes involving parents may affect whether a customer is considered independent (Youth Allowance (YA) or ABSTUDY) and therefore not subject to the Parental Means Test. For example, parents who are unable to provide a home or are serving a prison sentence.

Note: not all YA and /or ABSTUDY independence criteria apply to the Tertiary Access Payment (TAP). That is, a customer may be assessed as independent for the purposes of YA or ABSTUDY but still need to provide parental income details for TAP. See Assessing and finalising claims for the Tertiary Access Payment (TAP).

If a member of the family pool has a change in circumstances, it may have an impact on the rate of a dependent sibling, including where a member of the family pool:

• reaches the age of independence
• has an increase or decrease in Rent Assistance (RA)
• receiving the Away from Home Rate returns to live at home
• not previously on payment is granted Youth Allowance (YA) or ABSTUDY
• loses or gains entitlement to a dependent payment
• transfers to a payment other than YA, ABSTUDY or Assistance for Isolated Children (AIC) Additional Boarding Allowance (ABA), for example Disability Support Pension (DSP)

Note: this does not apply to the Tertiary Access Payment (TAP).

Some examples of where a change in circumstances within the family pool may affect the rate of Youth Allowance (YA), ABSTUDY or Assistance for Isolated Children (AIC) Additional Boarding Allowance (ABA) include:

• the customer's or AIC student’s parent(s)/guardian(s) gain or lose care, or the shared care percentage changes of a Family Tax Benefit (FTB) or regular care child aged 0-15 or 16-19 in full-time secondary study
• the customer's or AIC student’s parent(s)/guardian(s) FTB or regular care child aged 16-19 ceases or returns to full-time secondary study
• the customer's or AIC student’s parent(s)/guardian(s) rent amount changes
• maintenance income for the customer changes or a sibling commences or ceases to attract maintenance

Note: this does not apply to the Tertiary Access Payment (TAP).

Where a change to the members of the family pool has occurred due to the death of one or more members of the family pool, no Youth Allowance (YA) debt is incurred on other family pool members if the death has been notified to Services Australia within 28 days.

In the case of ABSTUDY, any debt will be incurred from the date following the date of the death (and subject to waiver of recovery of the debt on the grounds of special circumstances).

In the case of Assistance for Isolated Children (AIC), any debt will apply from the date paid to plus one day (and subject to waiver of recovery of the debt on the grounds of special circumstances).

However, any rate change to family pool members must be applied from the:

• notification date in the case of YA
• date following the date of the death in the case of ABSTUDY, and
• date paid to plus one day in the case of AIC

As the Tertiary Access Payment (TAP) is not subject to a family pool assessment, the death of one or more parent(s)/guardian(s) will not affect the rate of payment. However, consideration must be given to:

• who the PIT parent(s)/guardian(s) is for the assessment of the TAP. For example, if the student was dependent on a single deceased parent, reassessment may be required to determine who is considered the PIT parent
• if the death of a parent(s)/guardian(s) will affect the assessment of the combined parental income. For example, a TAP customer who may have been rejected due to parental income too high, may now qualify for payment
• if the customer has no surviving parent(s)/guardian(s), and whether or not a PIT exemption can be applied

A PIT exemption for Youth Allowance (YA)/ABSTUDY or Assistance for Isolated Children (AIC) normally ceases to apply when the parent/applicant stops receiving their income support payment including Farm Household Allowance (FHA), another qualifying payment or their Health Care Card (HCC) expires. If the dependent YA or ABSTUDY customer, or AIC student, is no longer eligible for an exemption from the PIT, parental income details are required so the PIT can be applied.

Note: for ABSTUDY and AIC Additional Boarding Allowance (ABA), when a parent ceases to receive FHA, the dependent customer/student will not be subject to the PIT, from the start of the period of receiving FHA until 31 December of that year.

Unlike other dependent payments, a PIT exemption is not applied to the Tertiary Access Payment (TAP), where the parent(s)/guardian(s) are receiving certain social security benefits, pensions or Department of Veterans’ Affairs (DVA) payments. See Assessing and finalising claims for the Tertiary Access Payment (TAP).

It is a notifiable event if a parent ceases to qualify for an exemption from the PIT because they stop receiving an income support payment or their Health Care Card (HCC) expires (non-Low Income HCC in the case of ABSTUDY and Assistance for Isolated Children (AIC)). The link between the Youth Allowance (YA) or ABSTUDY customer or AIC student and parent or applicant records will auto-cease the exemption from the PIT.

Where necessary, a PIT review letter and a One Time Access Code (OTAC) is issued for YA and ABSTUDY customers, requesting the parent(s)/guardian(s) to update their parental income details using the Advise Parental Income online service. AIC parents can update their parental income details over the phone or at their local service centre.

The PIT exemption must be manually updated/ended on the customer’s record when a customer/parent advises they no longer receive either of the following entitlements:

• Department of Veterans' Affairs (DVA) payments
• A valid HCC, due to receiving the maximum rate of Family Tax Benefit (FTB) Part A