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7.9.3 Formulated rate table

7.9.3.1The table below sets out the steps for determining the 'formulated rate' of recovery.

Step

Action

1

Calculate the total income from all sources. Write the total income at (a)

(a)

2

Is the amount at (a) ? the maximum basic rate (MBR)?

If yes, write the MBR at (b)

If no, copy (a) to (b)

(b)

3

Multiply (b) by 14% and copy (c)

(c)

4

Is the amount at (a) ? MBR?

If yes, write $0 to (d)

If no, subtract the MBR from (a), and write the amount to (d)

(d)

5

Is the amount at (d) ? the income free area (IFA)?

If yes, copy the IFA to (e)

If no, copy (d) to (e)

(e)

6

Multiply (e) by 55%
and write the amount at (f)

(f)

7

Is the amount at (d) ? IFA?

If yes, write $0 to (g)

If no, subtract the IFA from (d), and write the amount to (g)

(g)

8

Multiply (g) by 27.5% and write the amount at (h)

(h)

9

Add up the amounts at (c), (f) and (h) to determine the formulated rate.

7.9.3.2Income used in the formulated rate includes:

  • all items defined in the CLIK Policy Library – P10/C1 Ordinary Income
    This excludes 'deprived income' and 'deemed income' as per this manual's Section 7.9.2.4  Where deemed income on financial assets are excluded, any actual income earned derived or received should be taken into account
  • service pension or income support supplement
  • basic rate of disability pension
  • war widow's/widower's pension, including the non-indexed amount and pension supplement
  • Centrelink payments.

7.9.3.3Income not used in the formulated rate includes:

a payment under Part VI VEA

pharmaceutical allowance

rent assistance

remote area allowance

deprived income (in income support pension assessment)

deemed income (in income support pension assessment)

family tax benefit

any payment under VCES

orphan's pension received in trust for a child

Note:An example of the formulated rate is in this manual's Section 7.21 Examples at the end of this chapter.