The Law Handbook 2024

Chapter 5.1: Dealing with social security 317 In some circumstances, a person who provides evidence that they have a catastrophic, profound or terminal condition listed in the Social Security Guide (available at https://guides.dss.gov.au/social- security-guide/3/6/2/20) may have their claim for the Disability Support Pension accepted without the need for further evidence. Advice from a lawyer should be obtained in relation to the application of policy in these kinds of cases (see Chapter 2.4: Legal services that can help). Rate of payment Except for single pensioners aged under 21 with no children, the basic rates of the Disability Support Pension are the same as for the Age Pension (ss 117, 1064, 1065, 1066A, 1066B SS Act). The rate of pension payable to those under 21 depends on the person’s age and living arrangements. A pensioner may also be eligible for Rent Assistance and other supplements that increase the pension above the standard rate. Disability Support Pension rates are subject to the pension income or assets test, unless the pensioner is permanently blind (see ‘Income and assets tests for pensions’, below). (See also A Guide to Australian Government Payments for more information about the Disability Support Pension.) Income and assets tests for pensions The rates of pensions are subject to the income test or the assets test, unless the pensioner is permanently blind. Where a person has both income and assets, the test that produces the lower payment applies. Income test The pension income test is used to assess Age Pension (ss 8, 1064, 1065, 1066A, 1066B, s1073AA, pt 3.10 SS Act). Pensioners are permitted to earn additional income. Once this extra income reaches the threshold, their pension payments are reduced. The threshold amount depends on the person’s marital status. For each $1 of income over the relevant threshold, the pension is reduced by 50 cents (singles) or 25 cents each (couples). The threshold is indexed annually and is listed as $204.00 for a single person and $360 for couples at the time of writing. Employment income is subject to a Work Bonus for pensioners over Age Pension age, except the Parenting Payment (Single). The Work Bonus was introduced to replace the Pension Bonus Scheme and is designed to encourage pensioners of Age Pension age to remain in the workforce by allowing them to earn more income before their pensions are affected. On 1 July 2019, the Work Bonus was extended to also apply to self-employment income from gainful work. The first $300 of income in a fortnight is disregarded from the income test. Also, if a person does not earn money in a fortnight, they may accrue the $300 to offset future earnings from employment (this is called the Work Bonus income bank). A person can accrue up to $7800. This is in addition to the normal allowable income threshold. (Before 1 July 2019, the fortnightly Work Bonus was $250 and the maximum that could be accrued was $6500.) A permanently blind person can receive the Age Pension or the Disability Support Pension regardless of their income (s 1065 SS Act). However, their income will be assessed if they claim Rent Assistance. The income of a pensioner’s partner is also relevant income for the purpose of calculating payment rates. ‘Income’ is defined very broadly in the SS Act; the definition is different to that used for income tax law. Under the SS Act, income includes amounts that are ‘earned, derived or received for the person’s own use or benefit’ and periodical payments or benefits by way of gifts or allowances. ‘Income amount’ means valuable consideration, personal earnings, moneys or profits (whether of a capital nature or not) (s 8). Among others, income includes bank interest, regular superannuation payments and rent paid by tenants. (For workers’ compensation payments, see ‘Compensation and damages payments’, below.) Several types of income are not assessed under the income test, for example: • loans that a person receives; • payments under the SS Act; • emergency relief; • instalment of parental leave pay under the Paid Parental Leave Act 2010 (Cth); • insurance payments for loss of property; • a National Disability Insurance Scheme amount paid under the National Disability Insurance Scheme Act 2013 (Cth); and • refunds from Medicare or health insurance funds.