Personal Income Test and Income Bank for ABSTUDY, Austudy and Youth Allowance (YA) students and Australian Apprentices 010-08010010

Item

Description

1

Income above the Lower Income Threshold without Income Bank Credits

Rupert receives Youth Allowance (Student) and is employed.

Rupert's income for this fortnight is $550 and they have no Income Bank credits to reduce their earned income.

To calculate the reduction amount:

• Earned Income = $550.00 (No Income Bank Credits are accrued because this is over the income free threshold)
• Income Bank = 0 (There is no reduction to Rupert's Earned Income)
• Rupert's Income is greater than $509.00, therefore the Lower Income Threshold is applied:
• (Earned Income - $509) multiplied by 50% = Reduction amount
• ((550 - 509) x 0.50) = 20.50

Rupert's payment will be reduced by $20.50.

2

Income above the Upper Income Threshold

Sylvia receives Youth Allowance (Student) and is employed.

Sylvia's income for this fortnight is $800 and they have no Income Bank credits to reduce their earned income.

To calculate the reduction amount:

• Earned Income = $800.00 (No Income Bank Credits are accrued because this is over the income free threshold)
• Income Bank = 0 (There is no reduction to Sylvia's Earned Income)
• Sylvias Income is greater than $610.00, therefore the Upper Income Threshold is applied
• (Earned Income - $610) multiplied by 60%, plus $50.50 = Reduction amount
• ((800 - 610) x 0.60) + 50.50 = 164.50

Sylvia's payment will be reduced by $164.50.

3

Income above the Upper Income Threshold with Income Bank Credits

Ben receives Youth Allowance (Apprentice).

Ben's income for this fortnight is $900 and has an Income Bank Balance of 266 credits.

To calculate the reduction amount:

• Earned Income = $900.00 (No Income Bank Credits are accrued because this is over the income free threshold)
• Income Bank = 266 (This will be drawn down to reduce Ben's income this fortnight)
• Ben's remaining ordinary income is 900 - 266 = 634
• All Income Bank credits are used and still don't reduce Ben's income to the income free threshold. This leaves Ben with no Income Bank credits remaining
• Ben's income after reduction is still greater than $610.00, therefore the Upper Income Threshold is applied:
• (Adjusted Earned Income - $610) multiplied by 60%, plus $50.50 = Reduction amount
• ((634 - 610) x 0.60) + 50.50 = 64.90

Ben's payment will be reduced by $64.90 and will not have Income Bank Credits to use the following fortnight.

4

YA student transfers to YA jobseeker then to YA student

Rashid is 19 and defers from a Bachelor of Engineering degree half way through the second year. Rashid attends a Services Australia office to register as a job seeker. At the time of deferral from the course, Rashid's Income Bank balance was 3,400 credits.

As soon as Rashid's activity changes from full-time student to job seeker, the:

• Student Income Bank balance will be set to zero
• Working Credit balance will be set 3,400 credits

When Rashid returns to full-time study the following year, any remaining Working Credit balance (up to a maximum of 3,500 credits) will be transferred to the Income Bank.

5

Income Bank credits reducing income below the Upper Income Threshold

Jennifer receives ABSTUDY as a full-time Australian Apprentice.

Jennifer's income for this fortnight is $850 and has an Income Bank Balance of 266 credits.

To calculate the reduction amount:

• Earned Income = $850.00 (No Income Bank Credits are accrued because this is over the income free threshold)
• Income Bank = 266 (This will be drawn down to reduce Jennifer's income this fortnight)
• Jennifer's remaining ordinary income is 850 - 266 = 584
• All Income Bank credits are used and still don't reduce Jennifer's income to the income free area. This leaves Jennifer with no Income Bank credits remaining
• Jennifer's income after reduction is greater than $509 and lower than $610.00, therefore the Lower Income Threshold is applied:
• (Adjusted Earned Income - $509) multiplied by 50% = Reduction amount
• ((584 - 509) x 0.50) = 37.50

Jennifer's payment will be reduced by $37.50.

Jennifer has used all accrued income bank credits and will not have credits to use the following fortnight.

6

ABSTUDY full time student ceases study then recommences

Mike is a full-time student in receipt of ABSTUDY payments. Mike has been on ABSTUDY for some time and has had no employment income to date, so the Student Income Bank balance is 12,700 credits.

Mike then withdraws from the course of study and payments are cancelled from the last day of study. Mike works for 5 weeks, but then decides to return to full-time study. Mike reclaims and is granted ABSTUDY payments from the date study recommences.

As there has been a gap in ABSTUDY entitlement, Mike's Income Bank balance is set to zero from the date ABSTUDY entitlement recommenced. Mike is not entitled to carry over the previous Income Bank balance of 12,700 credits.

If Mike had recommenced studies within 28 days of withdrawing from the previous course, Mike's:

• entitlement to receive ABSTUDY would have continued through the gap between courses, and
• Income Bank balance would have continued over this period, and
• Income Bank and any income from part-time employment would have been taken into account when determining the rate of ABSTUDY for this time

7

ABSTUDY full time student travels overseas temporarily

Sally is a full-time student in receipt of ABSTUDY payments. Sally has been on ABSTUDY for some time and has had no employment income to date. Sally's Student Income Bank balance is 12,700 credits.

Sally travels to England in the mid semester break. While overseas, Sally's ABSTUDY payments are suspended for not meeting the portability rules. As Sally's payments were suspended (and not cancelled), the student income bank balance is restored to 12,700 credits, the amount it was immediately before payments were suspended. Any income that would normally affect Sally's payments is taken into account.

Customer is transferring from:

Customer is transferring to:

Number of credits that can be transferred:

A payment that attracts Student Income Bank

Youth Allowance (job seeker)

Lesser of Student Income bank balance or 3,500

A payment that attracts Student Income Bank

A payment that attracts the Australian Apprentice Income Bank

Lesser of Student Income Bank balance or 1,000

A payment that attracts Student Income Bank

A payment that attracts Working Credit that is not Youth Allowance (job seeker)

Lesser of Student Income Bank balance or 1,000

A payment that attracts Student Income Bank

Another payment that attracts Student Income Bank

Nil

Youth Allowance (job seeker)

A payment that attracts Student Income Bank

Lesser of Working Credit balance or 3,500

Youth Allowance (job seeker)

A payment that attracts Working Credit that is not Youth Allowance (job seeker)

Lesser of Working Credit balance or 1,000

Youth Allowance (job seeker)

A payment that attracts the Australian Apprentice Income Bank

Lesser of Working Credit balance or 1,000

A payment that attracts the Australian Apprentice Income Bank

Youth Allowance (job seeker)

Lesser of Australian Apprentice Income Bank balance or 1,000

A payment that attracts the Australian Apprentice Income Bank

A payment that attracts Working Credit that is not Youth Allowance (job seeker)

Lesser of Australian Apprentice Income Bank balance or 1,000

A payment that attracts the Australian Apprentice Income Bank

A payment that attracts Student Income Bank

Lesser of Australian Apprentice Income Bank balance or 1,000

A payment that attracts the Australian Apprentice Income Bank

Another payment that attracts the Australian Apprentice Income Bank

Nil

A payment that attracts Working Credit that is not Youth Allowance (job seeker)

A payment that attracts the Australian Apprentice Income Bank

Lesser of Working Credit balance or 1,000

A payment that attracts Working Credit that is not Youth Allowance (job seeker)

A payment that attracts Student Income Bank

Lesser of Working Credit balance or 1,000

A payment that attracts Working Credit that is not Youth Allowance (job seeker)

Youth Allowance (job seeker)

Lesser of Working Credit balance or 1,000