1.1.U.20 Unavoidable or reasonable expenditure (NSA, YA, SA, PP, PA, WA, Austudy)
- the day-to-day costs of living, referred to as reasonable costs of living, PLUS
- other unavoidable or reasonable expenditure, PLUS
- for YA and Austudy only deductions from liquid assets are allowed in respect of funds required for education purposes over a 12 month period.
For the purposes of the SWPP, unavoidable or reasonable expenditure DOES NOT include the day-to-day, or reasonable costs of living.
Examples - Reasonable costs of living
The following are examples of expenses that would be considered as reasonable costs of living for the LAWP and IMP:
- rent or mortgage payments,
- regular medical expenses,
- rates, water and sewerage costs,
- gas, electricity and telephone bills,
- petrol for the person's vehicle,
- public transport costs, and
- any other cost the Secretary determines is a reasonable cost of living for the person.
Reasonable costs of living - upper limit
For a person who is not a member of a couple, the amount considered reasonable to live on over a period cannot exceed the amount of allowance that the person would have been entitled to receive over that time, had the income maintenance period or other waiting periods not been applied. For a person who is a member of couple, reasonable expenditure cannot exceed twice that amount. This calculation includes PhA, RA, ES, pension supplement and RAA, but not FTB. In addition, if the person had other income during that period, the limit for reasonable expenditure may be reduced.
Examples - Calculating the upper limit of reasonable cost of living
A single person claims NSA, has no additional income, is paying rent, and is subject to 6 week IMP.
- If the person were not subject to the IMP, their rate of payment would be $324.70 Basic Benefit plus $50.00 RA per fortnight (pf). When calculating the reasonable cost of living for this person, the amount attributed to the reasonable costs of living cannot exceed $374.70 pf.
A married person claims NSA, has $200 pf additional income, is not paying rent, and is subject to 6 week IMP.
- If the person were not subject to the IMP, their rate of payment (after the income test and based on a maximum entitlement of $293.80 pf) would be $211.80 pf. When calculating reasonable expenditure for this person, this amount must be doubled as they are a member of couple. Therefore the amount attributed to the reasonable costs of living cannot exceed $423.60 pf.
Examples - Other unavoidable or reasonable expenditure:
In addition to the reasonable costs of living the following are examples of expenses that would be considered as unavoidable or reasonable expenditure for the LAWP/IMP/SWPP:
- repairs to, or replacement of, essential white goods in the person's home,
- replacements for essential household goods stolen or lost through natural disaster when the cost is NOT the subject of an insurance policy,
- funeral expenses,
- essential repairs to the person's car or home,
- essential medical expenses,
- school expenses,
- motor vehicle registration,
- essential expenses associated with the birth or adoption of a child by the person,
- premiums for vehicle or home insurance, and
- any other costs that the Secretary determines are unavoidable or reasonable expenditure in the circumstances in relation to a person.
The following are examples of expenses that would NOT be considered as unavoidable or reasonable expenditure:
- a family holiday,
- purchasing unessential furniture such as an outdoor setting,
- entertainment costs,
- purchase/installation of a recreational swimming pool, and
- paving a driveway.
Act reference: SSAct section 19C(4) Meaning of unavoidable or reasonable expenditure, section 19C(5-7) Meaning of reasonable costs of living, section 14A(1) Social security benefit liquid assets test definitions
Policy reference: SS Guide 3.2.1 NSA - Qualification & Payability, 3.2.3 YA - Qualification & Payability, 3.6.5 SA - Qualification & Payability, 3.5.1 PP - Qualification & Payability, 3.3.1 PA - Qualification & Payability, 3.4.3 WA - Qualification & Payability, 3.3.3 Austudy - Qualification & Payability