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Friday, December 12, 2014The total assessable income free area (also referred to as pensioner threshold) is equal to the maximum total income for a full pensioner. In general, the free area is the sum of:

- Maximum basic rate [2] (at the not a member of a couple rate),
- Pension supplement [2] amount (excluding the Minimum pension supplement amount [2]),
*and* - applicable pension income free area amount.

Note: The Aged Care legislation also provides for the total assessable income free area to be calculated using the pre-20 Sep 2009 Maximum basic rate [2] for some residents to give an equitable outcome relative to the new pension system.

According to Schedule 6-B1 of the VEA [3] a MBR is the person's maximum rate is ascertained at the date of grant of the designated pension, and is the maximum annual pension rate payable at the date of grant (excluding allowances).

The pension supplement is added to a person's maximum basic rate [2]. The pension supplement is calculated as a 'combined couple' rate. The 'not a member of a couple' rate is 66.33% of the 'combined couple' rate. The member of a couple rate is 50% of the combined couple rate. From 1 July 2010, the minimum pension supplement amount [2] will be able to be claimed on a quarterly basis rather than on a fortnightly basis.

The minimum pension supplement is an annual rate and is paid fortnightly. From 1 July 2010, the minimum pension supplement will become more flexible, with recipients able to elect to receive the payment quarterly. It is calculated as a combined couple rate and is indexed twice a year in line with CPI increases. The 'not a member of a couple' rate is 66.33% of the combined couple rate. The member of a couple rate is 50% of the combined couple rate. The minimum pension supplement commenced on 20 September 2009 and replaced utilities allowance and telephone allowance.

**Links**

[1] https://clik.dva.gov.au/user/login?destination=comment/reply/23387%23comment-form

[2] https://clik.dva.gov.au/%23

[3] http://www.comlaw.gov.au/Series/C2004A03268