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Ordinary/adjusted income test
The ordinary income test provides for an ordinary/adjusted income free area; that is, it provides that the pensioner may receive income up to a certain amount without any reduction in their maximum rate of pension (provided that the assets do not exceed the assets value limit). Any income in excess of the income free area will reduce the pension at the rate of 40 cents on the dollar.
The ordinary/adjusted income free area provides that the pensioner may receive income up to a certain amount without any reduction in their maximum rate of pension.
Any income in excess of the free area will reduce the pension at the rate of 50 cents on the dollar, or 40 cents for those receiving a transitional rate of pension. The amount of ordinary and adjusted income free areas is specified in item 1 in Table E-1 in point SCH6-E6 VEA.
Note: War widow's pension is included as income under the adjusted income test. Neither Disability Compensation Payment nor war widow(er)'s pension are included as income under the ordinary income test.
Assets value limit is the maximum value of assets a person can have without affecting the person's pension rate. The assets value limit is worked out in accordance with SCH6-F3 of the VEA.
The income free area is the amount of income that an income support pensioner may receive without suffering any reduction in pension under the income test.
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