10.1.1 Overview of Ordinary Income

Last amended: 13 April 2011

Income rates and definitions

There are several methods of assessing income for service pension and income support supplement, depending on whether income is earned at a constant rate, irregular rate or as a lump sum.    

A pension rate varies according to whether:

• the pensioner is a member of a couple,
• the pensioner is blind, or
• children are involved.

Certain amounts taken to be received over 12 months

One-off, irregular or non-periodical lump sum amounts are taken to be received over 12 months commencing on the day on which the person becomes entitled to receive the amount provided the amount is not:

• in the form of periodic payments, or
• remunerative work undertaken by the person, or
• already counted under the income test under the deeming or income streams rules, or
• a specifically exempt lump sum, or
• generally exempt lump sum.

Note: while section 46A does not apply to lump sum amounts obtained from remunerative work, this exception to the 12 month assessment rule does not allow lump sum income amounts (for example, an employee receiving back pay as a lump sum due to award conditions not being met) to be disregarded. The Rate Calculator generally provides that the person's annual rate of income is to be held, so lump sum amounts arising through adjustments to remuneration can be assessed and held over the following 12 months under that alternative provision.     

Income exempt from assessment

Some types of income are exempt from assessment. The treatment of these types of income varies, according to the type of income involved and the payment to which it relates. Payments received from Centrelink have specific assessment requirements.    

Income from employment

There are numerous forms of income from employment, from wages and allowances through to commissions and fringe benefits. Assessment requirements depend on the nature of the income.    

Income from overseas

Income received from overseas has specific assessment criteria.    

This includes the treatment of:

• overseas pensions,
• war pensions, and
• restitution payments.

Income from property

Income from real estate includes income from:

• the sale of a property,
• rent, and
• board and lodgings.    
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  Section 10.1.6 Income from Property

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Income from other sources

Other sources of income with particular assessment requirements include:

• property settlements and life interest,
• insurance products,
• personal injury schemes,
• education and training allowances,
• gifts, legacies and royalties,
• private companies and trusts,
• private annuities,
• overseas annuities,     
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  Section 10.1.7 Income from Other Sources

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• solar power generation and feed-in tariffs for electricity generated by solar panels.     
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  Domestic solar power generation

  Section 10.1.3/Exempt income from other non-government sources

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