The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

4.10.2 Historical unemployment (including JSP), sickness benefit & SA income test from September 1969 to present date

Summary

This section covers the income test for unemployment (including JSP), sickness benefit and SA from September 1969 to the present date.

Notes to the table are included immediately after the table. The following table shows the permissible income and income test applying at each date. Before 12 December 1987, excess amounts were rounded to the nearest cent.

Date Permissible income Income test

27/09/1969

Note A

Note B

Note C
  • $3.00 per week (pw) unmarried, under 21, one parent residing in Australia
  • $6.00 other persons

Benefit reduced dollar for dollar by income over permissible income ($3.00 or $6.00).

01/11/1980

$3.00 pw unmarried, under 18, one parent residing in Australia

Benefit reduced by half the amount by which income exceeds $3.00 pw up to $40.00 pw and the full amount of any income over $40.00 pw.

$6.00 other persons

Benefit reduced by half the amount by which income exceeds $6.00 pw up to $50.00 pw and the full amount of any income over $50.00 pw.

01/11/1982

$10.00 pw

Benefit reduced by half the amount by which income exceeds $10.00 pw up to $60.00 pw and the full amount of any income over $60.00 pw.

01/03/1984

Note D

$20.00 pw

Benefit reduced by half the amount by which income exceeds $20.00 pw up to $70.00 pw and the full amount of any income over $70.00 pw.

01/05/1986

$30.00 pw

Benefit reduced by half the amount by which income exceeds $30.00 pw up to $70.00 pw and the full amount of any income over $70.00 pw.

01/12/1987

Note E

$60.00 per fortnight (pf)

Weekly rates of benefit reduced by one quarter of the amount by which income exceeds $60.00 pf up to $140.00 pf and one half of the amount of any income over $140.00 pf.

20/09/1990

$60.00 pf plus an additional $30.00 pf if one works or $60.00 pf if both work.

The allowance income test for married couples is applied after the earnings free area is applied. The earnings free area does not apply to single recipients, or pensioner partners.

20/09/1993

$60.00 pf plus an additional $30.00 pf for a single allowee for earned income, or $50.00 pf if one partner works or $100.00 pf if both partners work.

The allowance income test is applied after applying the earnings free area - the earnings free area does not apply to pensioner partners.

20/03/1994

Earnings Credit Scheme with a maximum balance of $500.00 each for recipients and partners. Single people accrue earnings credit at $90.00 pf. A member of a couple accrues at $80.00 pf (no changes in permissible income for the income test).

Earnings are offset against the Earnings Credit Scheme (when income affects the rate of payment) before the income test is applied to remaining income. Recipients paid at a maximum rate will accrue a credit. Recipients cannot use earnings credit when income results in a nil payment under the income test.

01/07/1995
  • The removal of the additional free area for earned income.
  • Replacement of the 100% withdrawal rate for income over $140.00 pf, with a 70% withdrawal rate.
  • Removal of the joint income test (except for pensioner/allowee couples) and the introduction of the personal and partner income tests.

The allowance income test is firstly applied based on the ordinary income of the person and will not affect their partner's rate of allowance unless the income is above the cut-out point.

01/07/1995

Note F

The accrual rate of earnings credit is $60.00 pf for single allowees and for each member of a couple.

Each fortnight that the recipient's own ordinary income is below the ordinary income free area ($60.00), an earnings credit will accrue unless the recipient has accrued the maximum amount.

01/07/1998

Note G
  • Introduction of YA (other), replacing YTA, NSA and SA for young people.
  • Income free area of $60.00 pf.
  • Income threshold of $140.00 pf.

Taper rate on income between $60.00 pf and $140.00 is 50%.

Taper rate for income above $140.00 pf is 70%.

01/07/2000

Note H
  • Income free area moves from $60.00 pf to $62.00 pf with the introduction of the New Tax System.
  • Income threshold of $140.00 pf moves to $142.00 pf.

Note: This includes YA (other).

No changes to ordinary income test tapering.

01/07/2006

Income threshold of $142.00 pf is increased to $250.00 pf.

Note: This includes YA (other).

Taper rate on income between $62.00 and $250.00 pf is 50%. Taper rate for income above $250.00 becomes 60%. Partner excess income taper rate becomes 60%.

01/07/2012

Note I

 Income free area moves from $62.00 pf to $143.00 pf for YA (other).

Taper rate on income between $143.00 and $250.00 pf is 50%.

Taper rate on income over $250.00 is 60%.

01/01/2013

Existing NSA taper rates for all single principal carers were replaced with a single, lower taper rate of 40c in the dollar for income above $62.00 pf.

All other NSA recipients will remain subject to the usual NSA income test of 50c in the dollar for fortnightly income between $62.00 and $250.00 and 60c in the dollar for income above $250.00 pf.

20/3/2014

Income free area moves from $62.00 pf to $100.00 pf for NSA, WA, PA, PPP, and SA.

No changes to ordinary income test tapering.
1/7/2015
  • Income free area moves from $100.00 pf to $102.00 pf for NSA, WA, PA, PPP and SA.
  • Income threshold moves from $250.00 pf to $252.00 pf for NSA, WA, PA, PPP and SA.

No changes to ordinary income test tapering.
1/7/2016
  • Income free area moves from $102.00 pf to $104.00 pf for NSA, WA, PA, PPP and SA.
  • Income threshold moves from $252.00 pf to $254.00 pf for NSA, WA, PA, PPP and SA.

No changes to ordinary income test tapering.

1/7/2017

Note J

Note K

 Maintain at level the income free area for NSA, WA, PA, PPP and SA from 1 July 2017 for the next 3 years. Indexation is scheduled to recommence from 1 July 2020. No changes to ordinary income test tapering.
1/7/2020
  • Income free area moves from $104.00 pf to $106.00 pf for JSP, WA, PA and PPP.
  • Income threshold moves from $254.00 pf to $256.00 pf for JSP, WA, PA and PPP.
 Partner excess income taper rate for JSP temporarily changed to 25c in the dollar from 27 April until 24 September 2020 as part of Government's response to the COVID-19 pandemic.
25/9/2020

Personal income test for JSP temporarily increased from $106.00 to $300.00 per fortnight.

Note: This also occurred for YA (other).

Personal income test for JSP was changed to a single taper rate of 60c for every dollar above the free area from 25 September 2020 to 31 March 2021.

Partner income test taper rate for JSP was increased to 27c from 25 September 2020 to 31 March 2021.

1/4/2021

Note L
  • The income free areas for JSP and PPP increased to $150.00 per fortnight.
  • Income threshold remains at $256.00 for JSP and PPP.

Note: This also occurred for YA (other), although with a threshold of $250.00.

Personal income test for JSP and PPP changed so that income between $150.00 and $256.00 reduces the rate of payment by 50c in the dollar and income above $256.00 reduces the rate of payment by 60c in the dollar.

Partner income test taper rate returned to 60c in the dollar.

Notes

These notes relate to unemployment and sickness benefit income test from September 1969 to present day:

Note Explanation
A

Before 1 November 1977 partner's income did not affect the rate of sickness benefit payable for the claimant, that is, the maximum single rate of sickness benefit plus additional benefit for any children could be paid irrespective of the partner's income.
B

Partner's income in excess of the rate of the additional benefit payable for the partner, reduced the rate of additional benefit for partner on a dollar for dollar basis.
C

Savings provisions apply to sickness benefit cases granted before 1 November 1977.
D

Before 1 August 1984 the special income test for recipients whose partner received a 'prescribed pension' did not apply.
E The single rate of sickness benefit for recipients without dependents was not increased. The amount payable remained at the 15 December 1986 rate as a result of the decision to standardise the single unemployment and sickness benefit rates from 13 December 1987 (that is, instalments falling due on or after that date). The full income test was then applied to this rate.
F

From 20 March 1997 the Earnings Credit Scheme was abolished for all allowance and pension payments. There was no savings provision for this change. As of 20 March 1997 income was assessed using an income free area and the appropriate taper rates.
G

From 1 July 1998, the Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Act 1998 introduced YA.

The income test is the same as NSA.
H

As part of the changes introduced with the New Tax System at 1 July 2000 - income and asset free areas were generally increased by 2.5%.
I As part of the Social Security and Other Legislation Amendment (Income Support and Other Measures) Act 2012, the income free area for YA (other) will increase from $62.00 to $143.00 and the second threshold amount will remain at $250.00.
J As part of the Social Services Legislation Amendment Act 2017, indexation which occurs on 1 July each year for NSA, WA, PA, PPP and SA, will be paused for 3 years. The first instance is 1 July 2017.
K From 20 March 2020, NSA, SA, WP, BVA and WidB will cease and most recipients of these payments will transition to JSP, Age or CP, depending on their circumstances.
L Indexation of the income free area on 1 July each year ceases.

Act reference: SSAct section 8(1)-'income'

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