10.1.9.70 Inside Australia rate - one of a couple paid under the direct deduction rate
One of a couple paid under an agreement
Sometimes one of a couple is entitled to an Australian pension autonomously and one is entitled to a pension under an agreement. When this happens the rate payable to the partner paid under the agreement may be zero.
Example: A couple both claim age pension. The husband qualifies under the Agreement with Italy and the wife qualifies autonomously. The husband receives Italian pension of $18,000 per annum and the wife receives an Italian pension of $14,000 per annum. They have other income of $3,000 per annum between them.
Note: Pension rate used is hypothetical and is for illustration purposes only.
|1||Apportion the Italian pension to each partner as follows:|
|Husband's Italian pension
Wife's Italian Pension
Divide by 2
|2||Calculate the agreement pension first by deducting $16,000 from the maximum married rate.|
Less share of Italian pension
Excess Italian pensions
|The husband's rate is NIL.|
|3||Calculate the autonomous rate of pension disregarding (for the income test) the amount of deducted Italian pension in Step 2.|
Italian pension income
Less wife's ordinary income free area
Taper (50 cents in every $)
Maximum married rate
Less affecting income
Rate payable to wife
$8,576 per annum
|4||Compare income test rate to assets test rate and pay whichever is the lesser.|
2009 Pension Reform transitional provisions
As part of reforms to pensions from 20 September 2009, a person's pension may be paid under transitional arrangements where this provides a higher rate of payment.
Further information on the transitional arrangements is at 188.8.131.52.
Act reference: SSAct Schedule 1A Savings and transitional provisions
Policy reference: SS Guide 184.108.40.206 Pension Reform - transitional arrangements
From 20 September 2009 a work bonus applies to pensioners of age pension age (except PPS).
The work bonus allows for a certain amount of employment income that is earned, derived or received in an instalment period by a pensioner who is of age pension age (except PPS) to be disregarded for the purposes of the pension income test. From 1 July 2019, the work bonus was expanded to include income from self-employment from gainful work, as well as employment income.