Pension Supplement 108-08020000

Pension Supplement (PNSUP) was introduced on 20 September 2009. It replaced a number of small add-on payments. Pension Supplement (PNSUP) is based on the payments it replaced. It is the total of the following:

• Pension Supplement Basic (PSBAS):
• A GST supplement was paid to eligible customers from 1 July 2000 to 19 September 2009. On 20 September 2009 it was replaced by PSBAS
• This is a taxable component if the primary payment is taxable
• When a customer is paid PSBAS only or its equivalent, the receiving Pension Supplement Basic (SUPPL) component code may be used instead of PSBAS
• Pension Supplement Minimum (PSMIN):
• Replaced the former Utility Allowance (UA) and Telephone Allowance (TAL) payments. TAL was paid at different rates. PSMIN is based on the higher rate
• This is a non-taxable component
• Pension Supplement Remaining (PSREM)
• Replaced the former Pharmaceutical Allowance (PhA) payment. PSREM is not a defined rate. It is calculated by using the full amount of PNSUP less PSBAS and PSMIN
• This is a non-taxable component

There are 2 groups of transitional Pension Supplement customers. The names of the components are different and for some customers the rate of payment is also different.

Before 20 September 2009 - eligible 2009 Pension Reform customers

Changes were made to the pension income test. Transitional rules were put in place to make sure that no pension customer was worse off because of the new rules. Customers who were entitled to a higher rate before the changes, continued to be assessed under the old rules. An equivalent rate of Pension Supplement is included in the pension rate. The rate of payment as assessed using the old rules is called the transitional pension rate.

The equivalent rate of Pension Supplement is not taxed and has only 2 components:

• Transitional Minimum Supplement (TRMIN):
• can be received fortnightly or quarterly
• Non Taxable Transition component (TRNTX)
• can only be received fortnightly

Only detailed rate screens will show the basic pension and the equivalent rate of Pension Supplement separately. In most cases, they will appear together, as one combined amount of transitional pension.

Customers remain on the transitional pension rate until they are better off under the new rules. When that happens, they permanently move to the new rules.

20 March 2020 - former Wife Pension customers only

Wife Pension customers were eligible to receive Pension Supplement. Wife Pension ceased on 19 March 2020. Customers began to receive JobSeeker Payment (JSP) from 20 March 2020. They will be paid Transitional Pension Supplement (TPNSP) while they continue to meet the eligibility rules for Wife Pension, which were in place, on 19 March 2020.

The components of Transitional Pension Supplement (TPNSP) have different names:

• Transitional Basic Pension Supplement (TNTAX)
• the equivalent of PSBAS
• Transitional Minimum Pension Supplement (TNMIN)
• the equivalent of PSMIN
• Transitional Remaining Pension Supplement (TNNTX)
• the equivalent of PSREM

Some former Wife Pension customers continue to receive the transitional rate of Wife Pension from the 2009 Pension Reform changes. These customers will receive their equivalent amount of Pension Supplement under the TNMIN and TNNTX components.

All 3 components of Pension Supplement are payable to customers:

• receiving an eligible payment, and
• residing in Australia and either
• in Australia or
• temporarily absent for less than 6 weeks

Eligible payments are:

• Age Pension
• Disability Support Pension (DSP) (excluding those aged under 21 without children)
• Carer Payment (CP)
• Former Wife Pension customers who moved to JobSeeker Payment (JSP) on 20 March 2020
• any of the following payments where the customer is of Age Pension age:
• ABSTUDY (see Eligibility for Pension Supplement and ABSTUDY below)
• Austudy
• Parenting Payment (single and partnered)
• Special Benefit (SpB)

Eligibility for Pension Supplement and ABSTUDY

The student must reside in Australia, have reached the qualifying age for Age Pension and must qualify for one of the following ABSTUDY Awards:

• Schooling B Award
• Tertiary Award, or
• Masters and Doctorate Award

Note: paying pension supplement with ABSTUDY is a manual process undertaken each quarter by a specialised team of skilled staff. See Table 2 on the Process page.

Some customers eligible for Pension Supplement Basic only

Pension Supplement Basic only is payable to customers who are:

• under age pension age and receiving Parenting Payment Single (SUPPL)
• eligible Pension Supplement customers travelling overseas and absent for more than 6 weeks (PSBAS)
• for more information, see Pension Supplement overseas absences

Note: JobSeeker Payment and Youth Allowance (job seeker) customers get a higher maximum basic rate that is equivalent to the Parenting Payment (single) rate inclusive of the Pension Supplement basic amount, if they are:

• the single, principal carer of a dependent child, and
• granted an activity test exemption

For more information regarding this higher rate and entitlement, see Principal carer of a dependent child.

Must receive the payment

Pension Supplement must be paid to all customers who:

• are eligible, and
• meet the income and assets test within the period

There is no option to decline the payment.

Pension Supplement customers, are also paid Energy Supplement if eligible.

Transitional rate

Former Wife Pension customers receiving JSP from 20 March 2020

If, when Wife Pension stopped, the customer was receiving the:

• 2009 transitional rate, it will continue while the customer remains eligible
• the normal rate of PNSUP, they will receive the 2020 transitional rate when their JSP payment commenced

Single customers:

• Transitional Pension Supplement is not payable to single customers

Partnered customers:

• The couple combined rate of Pension Supplement is frozen at the rate payable on 19 March 2020
• Illness separated, partner in respite or partner in gaol Pension Supplement rate is:
• frozen at the 19 March 2020 rate for customers who are receiving the 2009 transitional rate
• indexed as normal on 20 March and 20 September for customers who are not receiving the 2009 transitional rate

All other customers receiving Pension Supplement or 2009 transitional pension rate

The payment is indexed 20 March and 20 September each year.

Note: different rates apply for the Pension Supplement and the 2009 transitional pension rate.

Partnered customers who receive the single rate of payment will also receive the single rate of Pension Supplement or 2009 transitional pension rate.

Pension Supplement is paid with the customer's fortnightly income support payment. The customer can choose to receive Pension Supplement Minimum (PSMIN) quarterly.

Note: transitional payments will have a different name.

The payment frequency can change on the customer's request, verbally or in writing. Customers lodging a claim are asked if they want to receive PSMIN fortnightly or quarterly.

Customers who receive Pension Supplement Minimum quarterly will receive their Energy Supplement quarterly.

PSMIN is calculated on a daily rate. The amount received each quarter can be different because the:

• number of days in a quarter can be different:
• the annual PSMIN is divided by 364, even if it is a leap year
• the result is multiplied by the number of days in the quarter
• customer changed from fortnightly to quarterly part way through a quarter. If that happened, the customer may have already received some of the payment due for the quarter as fortnightly payments

The year is divided into 4 using quarterly 'test dates'. The dates are the 20 September, 20 December, 20 March and 20 June.

Quarterly payments are generally made with the customer's income support payment on the first payday after the quarterly test date.

Quarterly amount paid before the test date

The quarterly PSMIN will be paid before the quarterly test date if the customer:

• is suspended or cancelled:
• any accrued PSMIN will be automatically paid with the final income support payment
• goes overseas permanently
• where the income support payment ceases, any accrued PSMIN will be automatically paid with the final income support payment
• changes the frequency from quarterly to fortnightly
• any accrued PSMIN will be paid with the customer's next income support payment

When the customer transfers primary payments:

• from one Pension Supplement eligible payment to another Pension Supplement eligible payment, the existing arrangements to pay fortnightly or quarterly will remain in place
• to another payment for which Pension Supplement is not payable, any accrued amounts will be paid as an immediate payment, following cancellation of the Pension Supplement eligible payment

The Pension Supplement is subject to the income and assets test. The Pension Supplement Minimum (PSMIN) amount is not reduced by means testing. If the person is entitled to any payment, the entire amount of PSMIN is paid.

When applying excess income/assets to a customer who is eligible for the Pension Supplement, the various components are reduced in the following order:

• Customer's basic rate
• Pension Supplement Basic Amount
• Pension Supplement Remaining amount
• Rent Assistance (RA)
• Energy Supplement
• Pension Supplement Minimum Amount - this is paid as either the full amount or nothing

Pension Supplement is to be income managed at the same rate as the person's base fortnightly income support payment, for example:

• 50% for the Northern Territory (NT) Income Management
• 70% for Western Australia (WA) Child Protection Income Management
• a variable percentage applies for the Cape York Income Management

The payment frequency, quarterly or fortnightly has no has no effect on income management.

The rules of eligibility and calculation for advance payments for customers receiving the Pension Supplement are:

• For pensioners, the minimum Pension Supplement amount is excluded from the calculation of an Advance Payment
• For non-pensioners of Age Pension age - the minimum Pension Supplement amount will be in included in Advance Payment calculations unless the customer has elected to receive the minimum amount as quarterly payments
• All of the components of the Pension Supplement will be calculated as a component of the annual payment rate

Customers who temporarily depart Australia can continue to get the full Pension Supplement rate for up to 6 weeks from the date of departure.

If the customer is still outside Australia after 6 weeks and their main payment remains payable, the Pension Supplement rate will reduce to the Pension Supplement Basic (PSBAS) Amount.

Parenting Payment Single (PPS) customers getting the Pension Supplement Basic (SUPPL) are eligible for payment for 6 weeks from the date of departure.

For more information, see:

• Pension Supplement overseas absences
• Parenting Payment Single (PPS) customer and/or child going overseas