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7.9.3 Formulated rate table
7.9.3.1 — The table below sets out the steps for determining the 'formulated rate' of recovery.
Step | Action |
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1 | Calculate the total income from all sources. Write the total income at (a) | (a) | |
2 | Is the amount at (a) greater than 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 write the amount at (c) |
| (c) |
4 | Is the amount at (a) less than the MBR? If yes, write $0 to (d) If no, subtract the MBR from (a), and write the amount to (d) | (d) |
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5 | Is the amount at (d) greater than the income free area (IFA)? If yes, copy the IFA to (e) If no, copy (d) to (e) | (e) |
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6 | Multiply (e) by 55% |
| (f) |
7 | Is the amount at (d) less than the IFA? If yes, write $0 to (g) If no, subtract the IFA from (d), and write the amount to (g) | (g) |
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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. |
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7.9.3.2 — Income 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 compensation payment
- war widow(er)'s pension, including the non-indexed amount and pension supplement
- Centrelink payments.
7.9.3.3 — Income not used in the formulated rate includes:
a payment under Part VI VEA 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 the 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.