Income Test for partnered pension customers 108-03010020

The Income Test has different applications for the following pension customers:

• single pensioners
• partnered pensioners
• partnered pensioners where the partner is on an allowance payment
• pensioners separated due to ill health
• pensioners with children - if the pensioner is paid under the transitional rules for pension customers at 20 September 2009 and the customer has children, an extra income amount per child may be deducted before the rate of pension payable is calculated

A separate rate is calculated under the pension Income Test (or if eligible, the Income Test under the transitional rules) and Assets Tests with the one resulting in the lowest rate of pension being applicable to that person.

Customers receiving Age Pension (Blind) or Disability Support Pension (Blind) may be exempt from the Means Test, but income and assets details are required to determine the partners' entitlement to payments or if the customer is claiming rent assistance.

Customers who are granted a pension under an International Agreement and are in receipt of a pension or superannuation payment from that agreement country may be subject to a direct dollar for dollar rate deduction.

Certain compensation payments or New Zealand Pension payments may also result in a direct deductions.

A customer is eligible for Work Bonus if they are:

• of Age Pension age, and
• in receipt of an income support payment other than PPS

Work Bonus applies to income, which is from:

• employment, and
• self-employment if the customer has earned the income through personal exertion

Where a working age customer has a partner of Age Pension age who is entitled to Work Bonus, the Work Bonus is applied to the partner's employment or and/or self-employment income before calculating the employment income component for the customer’s Working Credits.

For customers of workforce age, apply the Working Credit rules.

If income of the customer or their partner reduces their fortnightly rate to nil and some of that income is employment income, the person's payment may remain current at nil rate for up to 12 fortnights, known as the employment income nil rate period. Customers also in receipt of Family Tax Benefit (FTB) Part A will be subject to the FTB Part A income test during this period and will be required to provide an income estimate within 21 days of commencing the period or their FTB payment will cancel.

The online estimator options can be used to estimate the effect of a change in income on a customer's Centrelink payments.

For children born or entrusted to care on or after 1 October 2016, Parental Leave Pay (PPL) counted as ordinary income for pensions. PPL for children who were born or entrusted to care prior to 1 October 2016 was treated as exempt income.

A customer may have their pension rate calculated using the transitional rules.

The transitional rules will apply if the customer receives a higher rate of payment under the old Income Test (pre 20 September 2009) with no Work Bonus applied compared to the Income Test in place from 20 September 2009, which does include the Work Bonus.

If the customer's pension is paid under the transitional rules, the Work Bonus is not used to determine their rate of entitlement under the pre 20 September 2009 Income Test.

It is possible for their partner's income support payment entitlement to be calculated under a different income test, that is, the customer could receive a higher rate under the old income test and their partner may have been granted after 20 September 2009 and therefore only eligible to be paid under the new income test.