Last amended: 18 June 2010
VEA ? [2]
Child maintenance received by a pensioner from the parent of a child or a partner/former partner is not assessed as ordinary income [3] under the income test [3] for income support purposes. It is, however, taken into account under the maintenance income test [3] for "more than the base rate" of Family Tax Benefit Part A [3] and for child related payments in respect of DVA saved children [3].
More ? [4]
There is an important distinction between child support payments received and child support payments paid. Child support payments received by a person are not assessed under the ordinary income test that applies to service pensions. However, child support payments paid by a person are included within that person's assessable income.
Maintenance income [3] payments do not reduce the additional free area provided for dependent children [3].
Spousal maintenance payments are usually made periodically but can be received as lump sums. Spousal maintenance is distinct from a property settlement, which is the return of a person's own property.
For the person who receives spousal maintenance, the maintenance is not assessed as ordinary income under the income test for income support purposes. It is, however, taken into account under the maintenance income test for family payment purposes.
More ? [5]
Where a person is claiming or receiving income support and part of their income is used to pay spousal maintenance, it is necessary to look at the facts in each case to determine whether the income used to pay spousal maintenance should be assessed as income.
More ? [6]
The VEA does not exclude maintenance income payments, in the hands of the payer, from the income test. The basis for allowing a favourable discretion to exclude (in some circumstances) spousal maintenance amounts, in the hands of the payer, from the income test is that those amounts may be regarded as not being available for the person's own use or benefit. This may allow a reasonable finding that they do not fall within the definition of income within the VEA.
The individual circumstances of each case must be carefully considered to determine whether this expectation, of the amounts not being available for use by the payer, is correct. Where a delegate is reasonably satisfied that a valid and binding spousal agreement exists, then the maintenance income may be excluded from the pension assessment of the payer.
More ? [7]
Where a divorced or separated couple subsequently reconcile, maintenance income payments may still be required under a continuing court order. In this circumstance the continued exemption of the payments from the income test would not be appropriate, owing to the expectation under the VEA that members of a couple will pool and share their combined financial resources.
Family Assistance Guide 3.1.7 Maintenance Income Test
http://www.fahcsia.gov.au/guides_acts/fag/faguide-3/faguide-3.1/faguide-3.1.7.html [12]
Family Assistance Guide 3.1.7 Maintenance Income Test
http://www.fahcsia.gov.au/guides_acts/fag/faguide-3/faguide-3.1/faguide-3.1.7.html [12]
The ordinary income of a person for a period means, as described in section 46 of VEA [18], the gross ordinary income from all sources for that period without any reduction, other than a reduction of business income.
One element of the means test [3] for income support pensions whereby the rate of pension payable to a pensioner reduces progressively as their income increases above a certain threshold known as the income free area (IFA) [3].
The maintenance income test applies when assessing a person's entitlement to Family Tax Benefit [3]. A threshold amount of income (the maintenance income free area) is allowed, with each dollar of maintenance income [3] above the threshold reducing FTB Part A payments by 50 cents. The maintenance income test also applies to child-related payments in respect of DVA saved children [3].
Family Tax Benefit A is a payment made by the Family Assistance Office to assist families with the cost of raising children. It replaces Minimum Family Allowance, Family Allowance, Family Tax payment Part A and Family Tax Assistance Part A.
From 1 January 1998 responsibility for administration of most income support child related payments was transferred to Centrelink [3]. However, saving provisions allow any person in receipt of service pension [3] or income support supplement [3] on 31 December 1997 who would be or is financially disadvantaged by the transfer to continue having their child related payments paid by DVA [3]. Saved children are assessed under the rules contained in the VEA as at 31 December 1997.
According to subsection 5K(1) of the VEA [18], maintenance income in relation to a person, means:
but does not include disability expenses maintenance.
Section 5F(1) of the VEA defines dependent child as having the same meaning as in the Social Security Act 1991. For income support purposes, dependent child is defined as:
Child under 16 years
A child under 16 years cannot be considered a dependent child if:
Child 16 years or older
A young person who has turned 16 years but is under 22 years can still be a dependent child of the pensioner if:
A child over 16 years cannot be considered a dependent child if:
Income includes earning from casual, part-time or full-time earnings.
Note: the meaning of a dependent child for DVA income support pension purposes is not the same as the meaning for Family Tax Benefit purposes.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16409%23comment-form
[2] https://clik.dva.gov.au/book/export/html/16409#tgt-cspol_part10_ftn699
[3] https://clik.dva.gov.au/%23
[4] https://clik.dva.gov.au/book/export/html/16409#tgt-cspol_part10_ftn700
[5] https://clik.dva.gov.au/book/export/html/16409#tgt-cspol_part10_ftn701
[6] https://clik.dva.gov.au/book/export/html/16409#tgt-cspol_part10_ftn702
[7] https://clik.dva.gov.au/book/export/html/16409#tgt-cspol_part10_ftn703
[8] https://clik.dva.gov.au/service-eligibility-assistant-updates/all-determinations-order-date-signed-oldest-most-recent/determinations-under-vea
[9] https://clik.dva.gov.au/legislation-library
[10] https://clik.dva.gov.au/book/export/html/16409#ref-cspol_part10_ftn699
[11] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/94-children/944-payments-respect-saved-children
[12] http://www.fahcsia.gov.au/guides_acts/fag/faguide-3/faguide-3.1/faguide-3.1.7.html
[13] https://clik.dva.gov.au/book/export/html/16409#ref-cspol_part10_ftn700
[14] https://clik.dva.gov.au/book/export/html/16409#ref-cspol_part10_ftn701
[15] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/106-maintenance-income/1063-documentary-requirements-spousal-maintenance-agreements
[16] https://clik.dva.gov.au/book/export/html/16409#ref-cspol_part10_ftn702
[17] https://clik.dva.gov.au/book/export/html/16409#ref-cspol_part10_ftn703
[18] http://www.comlaw.gov.au/Series/C2004A03268
[19] https://clik.dva.gov.au/book/export/html/16409#tgt-SSA_ftn1
[20] http://www.comlaw.gov.au/Series/C2004A04121
[21] https://clik.dva.gov.au/book/export/html/16409#ref-SSA_ftn1