Date amended:
Last amended: 09 September 2021
Determining the rate for nonblinded ISS recipients
In determining the rate of income support supplement applicable to nonblinded war widow/widowerpensioners, two separate tests are applied:
 the adjusted income test, and
 the assets test.
How the income and assets tests are applied
For the adjusted income test, the total adjusted income is compared to the ordinary/adjusted income free area. The adjusted income free area for a person who is not a member of a couple differs from that for a person who is a member of a couple. It may also be increased if there are dependent children and the pensioner is on transitional rates.
For the assets test, the value of the person's assets is compared to the assets value limit which varies according to whether the person is a member of a couple and whether the person is a homeowner. The resulting rates are compared to the ceiling rate plus any rent assistance payable. Whichever is the lowest (the income reduced rate if all 3 are the same) is added to any remote area allowance payable. The result is the rate of income support supplement.
Determining the rate for blinded ISS recipients
The rate of ISS for blinded ISS recipients is the ceiling rate, free of the income and assets tests. However, any rent assistance payable can be reduced by the disability income rent test. Any rent assistance or remote area allowance payable is added to the ceiling rate.
Income support payments received by the partner of a blind pensioner are not exempt from the income and assets tests.
ISS recipients with dependent children or FTB children
Whether an ISS recipient has a dependent child or an FTB child can affect:
 rent assistance,
 remote area allowance, and
 the income free area, if the ISS recipient is assessed under the transitional rules..
Ceiling rate
The same ceiling rate applies regardless of whether the ISS recipient is paid under the standard rules or the transitional rules The ceiling rate may be increased if the war widows pension paid under Part II or Part IV of the VEA is compensation reduced. The increased ceiling rate is the sum of the normal ceiling rate and the amount of the reduction in the war widows pension. This increased ceiling rate is used in the overall calculation process to be compared against the income reduced rate and assets reduced rate.
Note: Service pensions payable to war widow/widowerpensioners is subject to the ceiling rate as outlined above.
ISS below ceiling rate
ISS may be paid at less than ceiling rate under the income and assets tests. Any income/asset reduction will be applied to the relevant (transitional or standard) maximum rate. The level of adjusted income at which ISS reduces below the ceiling rate and ceases are different for transitional rules and standard rules because of the different income test taper rates and different maximum rates. Similarly, there are different levels of assets at which ISS reduces and ceases under transitional rules and standard rules because of the different maximum rates.
Overall ISS rate calculation process
The following table shows the steps involved in the overall rate calculation for income support supplement for a non blinded person.
Step  Action 
1  Determine the person's maximum basic rate.

1A  Work out the amount of pension supplement.

2  Determine the amount per year (if any) of rent assistance.

3  Add steps 1, 1A, and 2 to obtain the person's maximum payment rate. 
4  Apply the adjusted income test to work out any reduction for income. More → More → (go back)

5  Take the reduction for adjusted income (if any) away from the maximum payment rate. The result is called the income reduced rate. 
6  Apply the assets test to work out any reduction for assets.

7  Take the reduction for assets (if any) away from the maximum payment rate. The result is called the assets reduced rate. 
8  Work out the person's ceiling rate.

9  Add:
The result is called the increased rate. 
10  Compare the:
The person's provisional payment rate is equal to the lowest of these rates, or the income reduced rate if the three rates are equal. 
11  Work out the amount per year (if any) of remote area allowance payable to the person.

12  Add any amount obtained in step 11 to the provisional payment rate. The result is the person's rate of income support supplement. 
Note: current rates are found in the Reference Library.
ISS and pension supplement
War widow/ers are not paid the pension supplement as a separate payment. Instead, the payments that make up the pension supplement are incorporated into war widow/ers pension and the ISS ceiling rate.
Transitional arrangements – pre 20 September 2009 pensioners
Transitional arrangements protect pensioners who were in payment before 20 September 2009 and whose pension would be reduced under the standard rules. The process for the calculation of pension in these cases is:
 determine the person's maximum basic rate of service pension in accordance with Schedule 5, Part 5, subclause 32(1), (2) or (3). This is the transitional MBR (which is indexed by CPI only),
 add any amount of rent assistance to the transitional MBR to give the maximum payment rate,
 work out the income reduced rate, allowing for additional child income free area (if applicable). There is no work bonus income concession and the 40 cents taper rate applies,
 work out the assets reduction amount (using the standard rules in module F) and deduct from the maximum payment rate,
 follow the standard steps to determine ceiling rate and increased rate, and
 the lowest of the income reduced rate, the assets reduced rate and the increased rate is the provisional payment rate, or the income reduced rate if the three rates are equal.
The provisional payment rate calculated under the transitional arrangements applies until such time as the standard rules provide a higher rate of pension.
ISS Calculation where there are saved children
Where a person has saved children, the steps set out in 'overall ISS rate calculation process' are modified, as follows:
 the maintenance income test is applied to the maintenance income of the person to work out the reduction for maintenance income,
 the reduction for maintenance income is then subtracted from the sum of dependent child addon, guardian allowance (if payable) and rent assistance (if payable). The resulting amount is added to the provisional payment rate (see step 10 of 'overall ISS rate calculation process'),
 when calculating any rent assistance payable, the higher rent assistance thresholds and rates of rent assistance payable to pensioners with saved children are to be used.