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Example 3 - Single Special Rate Disability Compensation Payment Recipient with a Compensation Limitation

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Last amended 
18 May 2022

A single Special Rate Disability Compensation Payment recipient receives the following income per fortnight.

Rates as at March 2004.

Special Rate Disability Compensation Payment

$771.00

Compensation Limitation

$  65.00 Debit

Bank Interest

$    5.00

Total

$711.00

Calculation

Step

Action

 

 

1

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

(a) $711.00

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) $464.20

3

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

 

(c) $64.99

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) $246.80

 

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) $120.00

 

6

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

 

(f) $66.00

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) $126.80

 

8

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

 

(h) $34.87

9

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

 

$165.86

Thus the Limitation Rate (rounded down to the nearest dollar) is $165.00 per fortnight.