Income Test for partnered pension customers 108-03010020

Has the customer been in receipt of Age Pension, Carer Payment (CP), Disability Support Pension (DSP) or Wife Pension on or prior to 20 March 1995 as well as being in receipt of Department of Veterans' Affairs (DVA) War Widows and Widowers Pension since 20 March 1995?

• Yes, see Completing Department of Veterans' Affairs (DVA) clearances and income coding. Procedure ends here
• No, go to Step 2

• Yes, go to Step 3
• No, go to Step 4

The customer or their partner may be entitled to the Work Bonus. This is an additional deduction for the assessment of eligible income. Eligible income includes both employment income and self-employment income earned through personal exertion.

The Work Bonus is available to pensioners of Age Pension age except for Parenting Payment Single (PPS) customers or a customer paid under the transitional rules for pension customers.

Calculate Work Bonus effected income before the Income Test is applied. For more information, see Work Bonus and balance for pensioners of Age Pension age.

• Yes, go to Step 5
• No, go to Step 6

If the customer or partner is eligible for Working Credit and in receipt of employment income they may be entitled to a deduction in the assessment of their employment income. For more information, see Accrual and depletion of working credits.

Check the WC Balance Summary (WCBS) screen to see if the customer has accrued a Working Credit balance. If there is a number greater than zero in the Balance: field, calculate the adjusted total ordinary income to be used in the rate calculation.

If the customer is partnered this is the total combined income of the customer and their partner.

Note: from 20 September 2009 the additional income free area for children only applies to Parenting Payment Single or pensioners paid under the transitional rules for pension customers.

• Yes, there is no effect on the rate of payment under the Income Test, see Step 1 in the Determination of how a customer’s income will affect their pension payment table
• No, go to Step 7

• A summary of income and asset details the customers have previously advised will be displayed on the Pensions Income and Asset Summary (PIAS) screen (excluding PPL or employment income coded with a frequency of IOP or LOP)

Note: Parental Leave Pay (PPL) for children born or entrusted to care on or after 1 October 2016 is counted as ordinary income however will not display on the PIAS screen. To view details of PPL, navigate to the P1RED screen. The amount of PPL will be included in the ‘Income total’ amount displayed on the Factors Affecting Rate (PFAR) screen

• Check with the customers to ensure that these details are correct
• Calculate the total gross ordinary income from the details on this screen taking into account any corrected balances as advised by the customers
• Do not include any direct deduction income amount. If on the PIAS screen, the Forgn Pension: field or Compensation: field contains income amounts, check Pensions Rate Calculation (PRC) screen to check if these amounts are direct deduction amounts. If so these should not be included in assessing the effect of ordinary income on the customer's rate of payment
• Divide combined income amount by two to determine individual's income

If the adjusted income is more than the pension income free area per fortnight, determine the affecting income for the fortnight:

• Affecting income for each individual customer = (annual individual adjusted assessable income - half the pension income free area limit) x 0.5
• To convert to a daily amount, divide result by 364 (not 365)

See Step 1 in the Determination of how a customer’s income will affect their pension payment table.

Determine the amount payable including Pension Supplement and if eligible Rent Assistance.

Amount payable = (maximum rate - direct deduction income amount) - affecting income.

• If the amount payable is more than nil but equal to or less than the full Pension Supplement, the full Pension Supplement will be paid
• If the customer's income reduces their fortnightly rate to nil and some of that income is employment income, the customer's payment may remain current at nil rate for up to 12 fortnights, known as the employment income rate period

See Assets Test for partnered pension customers.

The customer's entitlement will be the lower of the amounts and the customer will be subject to the test under which the lower rate was calculated.

From 20 September 2009, some customers may also be payable under the transitional rate if they are worse off under the current rules.

Customer will not be eligible for payment under the transitional rules if they claim on or after 20 September 2009.

Is the customer or partner eligible to be considered for payment under the transitional rules for pension customers? Note: if unsure, see the Grandfathering Summary (GFS) screen.

• Yes, a rate calculation is also required under transitional rules with the higher amount under the current Means Test and the transitional rules applying. For an explanation of the transitional rules, see Transitional rules for pension customers who were on payment at 19 September 2009. Go to Step 4
• No, go to Step 4

If the customer is affected by the Income Test, and:

• will receive nil rate due to the Income Test, and
• some of that income is employment income, advise details of 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
• Record details on a DOC