The taper rate is used to reduce the rate of a person's [glossary:service pension:245] or [glossary:income support supplement:118] if they or their partner have any [glossary:ordinary income:533] in excess of the ordinary/adjusted [glossary:income free area :147] (IFA). Any income in excess of the IFA will reduce the maximum payment rate by a 'taper rate' of 50 cents in the dollar (or 40 cents for transitional rate of pension). The result is the income reduced rate.
The same taper rate is also used in [glossary:disability income rent test:494] calculations to determine the amount of [glossary:rent assistance:367] for service pensioners and income support supplement recipients.
In addition to the income test taper, any assets in excess of the assets value limit will reduce the maximum payment rate per fortnight by 37.5 cents for every $250 over the Asset Value Limit. The result is the assets reduced rate