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9.4.2 Effect of Children on Eligibility for Income Support Pensions, Benefits and Allowances

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Last amended: 3 June 2013

Dependent child

A child of a person must first meet the definition of a dependent child which includes requirements such as age, student status, income and residency. Section 5F(1) of the VEA defines dependent child as having the same meaning as in the Social Security Act 1991.     

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Sec 5(1) Family relationships definitions–children

Sec 5(3)(c) Family relationships definitions–children

http://www.comlaw.gov.au/comlaw/management.nsf/lookupindexpagesbyid/IP200401781?OpenDocument

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Note: the meaning of a dependent child for DVA income support pension purposes is not the same as the meaning for Family Tax Benefit purposes.

Child under 16 years

A child under 16 years is considered a dependent child if:

  • the pensioner has legal responsibility either alone or jointly with another person for the day to day care, welfare and development of the young person and the young person is in the pensioner's care, or
  • the young person is not a dependent child of someone else and the young person is wholly or substantially in the pensioner's care.

A child under 16 years cannot be considered a dependent child if:

Child 16 years or older

A young person who has turned 16 years but is under 22 years can still be a dependent child of the pensioner if:

  • they are wholly or substantially dependent on the pensioner, and
  • their income in the financial year will not exceed the personal income limit (see below), and
  • they are receiving full-time education at a school, college or university.

A child over 16 years cannot be considered a dependent child if:

  • they receive a social security pension or benefit such as youth allowance, or payments under a program included in the programs known as Labour Market Programs; or
  • their personal income (including casual, part-time or full-time earnings) is more than the amount specified in section 5(4)(b) of the Social Security Act.     

A child over 16 years cannot be a dependent child of another person if the other person is their partner.

Note: Where a child/young person has lodged a claim for Youth Allowance, and a person has lodged a claim for partner service pension, the delegate should contact Centrelink to determine whether the claim will be backdated to before the claim for partner service pension. This could affect eligibility to claim partner service pension.    

Dependent child – residence requirements

A person is not to be treated as a dependent child of another person (the adult) unless the young person is an Australian resident and is living with the adult.

Dependent child test

A young person is generally held to be dependent on an adult where:

  • the adult has legal responsibility (alone or jointly with another person) for the welfare of the child, and the child is in the adult's care, or
  • the young person is wholly or substantially in the adult's care, and is not a dependent child of someone else.

There are other considerations, such as residency requirements and income received by the child, that may affect a finding under the Social Security Act definition that a child is dependent.

Shared custody

Where both parents share legal responsibility for a child's care and welfare, and custody is also equally shared, it is not appropriate to find that the child is dependent on one parent, but not on the other. In a situation of shared custody, it is reasonable to find that the child is still substantially in an adult's care, thereby meeting the requirement for dependency for the purposes of applying the increased income free area.

Children and partner service pension eligibility

    

A person under qualifying age who has a dependent child at the time of a claim for partner service pension may, if they meet all the other eligibility criteria, be eligible for the pension.    

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Partner Service Pension

Section 3.1.4

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A child/young person receiving a social security pension or benefit (e.g. Youth Allowance) is not considered a dependent child under the VEA.

Where a child/young person has lodged a claim for Youth Allowance but the claim is not yet determined, the delegate should contact Centrelink to determine whether the claim will be backdated to before the claim for partner service pension. This could affect the eligibility for partner service pension.

If the Youth Allowance claim will be backdated to before the claim for partner service pension, the person claiming partner service pension should be advised that the Youth Allowance claim will affect their eligibility. They will need to decide whether they wish to cancel the claim for Youth Allowance, depending on what best suits the particular circumstances of the child/young person and themselves.

Children and Commonwealth Seniors Health Card

    

One of the eligibility criteria for the Commonwealth Seniors Health Card is that the person satisfies the seniors health card income test. The income limit applicable under this test is increased for each dependent child of the person.     

Children and the ordinary/adjusted income free area

For those service pensioners assessed under the transitional rules only, the ordinary/adjusted income free area used in calculating a person's service pension or income support supplement is increased for dependent children.     

Children and the income/assets reduction limit (IARL)

The IARL is the maximum amount by which a person's service pension can be reduced and still qualify for a Gold Card. The IARL informs the income and assets limits for treatment at departmental expense. For those assessed under transitional rules only, the IARL is increased for each dependent child as a result of applying the additional income free area in respect of each child. For this purpose, a dependent child includes a person under 22 years of age who is receiving Youth Allowance.    

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Reference Library – Pension Rates

PRC/View

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Qualifying age is defined in section 5Q(1) of the VEA and is equivalent to the pension age for a veteran which is described in section 5QA VEA as:

  •       60 years for a male,
  •       for females subject to age equalisation (refer to the table in section 5QA VEA).

Section 5F(1) of the VEA defines dependent child as having the same meaning as in the Social Security Act 1991.  For income support purposes, dependent child is defined as:

Child under 16 years

  •       the pensioner has legal responsibility either alone or jointly with another person for the day to day care, welfare and development of the young person AND the young person is in the pensioner's care, or
  •       the young person is not a dependent child of someone else AND the young person is wholly or substantially in the pensioner's care.

A child under 16 years cannot be considered a dependent child if:

  •       they are not a full-time student, and
  •       their weekly income from any source is more than the amount specified in section 5(3)(c) of the Social Security Act.    

Child 16 years or older

A young person who has turned 16 years but is under 22 years can still be a dependent child of the pensioner if:

  •       they are wholly or substantially dependent on the pensioner, and
  •       their income in the financial year will not exceed the personal income limit, and
  •       they are receiving full-time education at a school, college or university.

A child over 16 years cannot be considered a dependent child if:

  •       they receive a social security pension or benefit such as youth allowance, or
  •       their personal income is more than the amount specified in section 5(4)(b) of the Social Security Act.    

Income includes earning from casual, part-time or full-time earnings.

Note: the meaning of a dependent child for DVA income support pension purposes is not the same as the meaning for Family Tax Benefit purposes.

 

 

A person's 'partner' is someone who is a member of a couple with that person.

A service pension is an income support payment broadly equivalent to the social security age and disability support pensions. It may be paid once a veteran or partner has reached the nominated age or is incapacitated for work.

The CSHC is intended to assist those retirees and other eligible veterans, war widow(er)s and their partners of pension age who fail to qualify for an income support pension from DVA or a pension or benefit from Centrelink. The card entitles the holder to pharmaceuticals listed on the PBS at a concessional rate and seniors supplement.

 

 

Pensioners and ISS recipients who were in receipt of pension on or before 19 September 2009 are eligible to be assessed under transitional rules, if:

  • transitional rules will result in a higher rate of pension, and
  • they have never been assessed under the new rules.

The requirement that the pensioner has never been assessed under the new rules, does not arise where the pensioner's entitlement is re-determined from a date prior to 20 September 2009.  Where new pension information is received and is effective prior to this date, the pensioner's right to receive the transitional rate is considered anew.

Once a pensioner or ISS recipient has been assessed under the new rules they cannot revert to transitional rules.  There is one exception to this, to cover respite care changes to pensioners who return to live as a couple again.

Recipients assessed under transitional rules:

  • have their payment calculated using the transitional maximum basic rate,
  • have a taper rate of 40 cents in the dollar for the income test, and
  • can still receive the additional income free area for children.

 

 

Pensioners and ISS recipients who were in receipt of pension on or before 19 September 2009 are eligible to be assessed under transitional rules, if:

  • transitional rules will result in a higher rate of pension, and
  • they have never been assessed under the new rules.

The requirement that the pensioner has never been assessed under the new rules, does not arise where the pensioner's entitlement is re-determined from a date prior to 20 September 2009.  Where new pension information is received and is effective prior to this date, the pensioner's right to receive the transitional rate is considered anew.

Once a pensioner or ISS recipient has been assessed under the new rules they cannot revert to transitional rules.  There is one exception to this, to cover respite care changes to pensioners who return to live as a couple again.

Recipients assessed under transitional rules:

  • have their payment calculated using the transitional maximum basic rate,
  • have a taper rate of 40 cents in the dollar for the income test, and
  • can still receive the additional income free area for children.