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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.More ?
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.VEA ?
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.More ?
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.More ?
Income from overseas
Income received from overseas has specific assessment criteria.More ?
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. More ?
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, More ?
- solar power generation and feed-in tariffs for electricity generated by solar panels. More ?
Domestic solar power generation
Section 10.1.3/Exempt income from other non-government sources
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.
ISS is an income support payment that may be paid to eligible war widows and widowers under the VEA and persons receiving wholly dependent partners' compensation under the MRCA, and who satisfy the means tests. It is an indexed rate, increased twice-yearly in March and September in line with changes to the cost of living and/or average wages. Income Support Supplement (ISS) legislation commenced on 20 March 1995. It is a payment created to replace the ceiling rate income support age, carer, wife and disability support pensions, paid to war widows/widowers by Centrelink.
According to Section 5E(2) of the VEA a person is a member of a couple, if they are:
- legally married to another person and is not living separately and apart from the other person on a permanent basis; or
- living in a prescribed registered relationship with the other person (whether of the same sex or a different sex) and is not living separately and apart from that other person on a permanent basis; or
- all of the following conditions are met:
- living with another person, whether of the same sex or a different sex;
- not legally married to that person;
- in a de facto relationship with that person; and
- not in a prohibited relationship
The term “partnered” is also commonly used.
A person may be regarded as permanently blind in both eyes where:
- there is a total loss of sight; or
- visual acuity after correction with suitable lenses is less than 6/60 in both eyes on the Snellen Scale; or
- where, in the written opinion of an ophthalmologist, the visual field deficits and/or combination of deficits results in a visual impairment which is the equivalent of a corrected visual acuity measure of less than 6/60 in both eyes.
The Commission Guideline CM5829: Determining 'permanently blind', 'no useful sight' and 'blinded in both eyes' may be instructive in making a blinded/blindness determination.
Centrelink is a Government service delivery agency responsible for delivering a range of Commonwealth Government services (including social security pensions and allowances) to the Australian community through a network of more than 400 Centrelink offices.