220.127.116.11 Rate of PLS
A person in the PLS can nominate an amount to receive as a loan each fortnight. This amount is paid in addition to any entitlement under normal social security law entitlements. From 1 July 2019, a person (or their partner) can access the PLS and top up their pension to 150% of the maximum fortnightly rate of Age. Self-funded retirees can get the whole 150% as a loan.
Where the person receives DFISA, their PLS maximum fortnightly payment rate is reduced by the amount of fortnightly DFISA the person is receiving.
The fortnightly loan amount can be changed at any time to any amount up to the maximum.
Act reference: SSAct section 1134(1) Effect of participation in pension loans scheme-pension or allowance rate
Policy reference: SS Guide 18.104.22.168 Calculating the maximum PLS loan
The portion of the fortnightly payment that is a loan is the difference between:
- the total fortnightly rate of pension or allowance including any relevant supplements a person actually receives, including the impact of income and assets tests direct deduction, proportional portability rate, DFISA, etc., and
- the total amount they have nominated to receive each fortnight up to an allowable limit of 150% of the max fortnightly pension rate.
Example: Janet is a 70 year old single maximum rate age pensioner with securable property. Her Age income with supplements is currently $926.20 per fortnight ($24,081.20 per year).
- Janet accesses the PLS, using her property as security, and nominates to receive 150% of her current Age with supplements.
- Her income increases to $1,389.30 per fortnight ($36,121.80 per year), 150% of the maximum rate of the Age with supplements. $463.10 per fortnight is a loan under the PLS and $926.20 per fortnight is her normal income support entitlement.
Treatment of RA, pension supplement & ES
A person may receive RA, pension supplement and ES as part of the actual amount payable under the normal income and asset test provisions.
If some pension is payable to a person under the normal income and assets test provisions, they also qualify for family assistance (FA) and CCS free of the FA income and assets test and for bereavement payments. These payments do NOT form part of the loan debt.
Note: Those receiving no income support amount, only loan payments through the PLS, do not qualify for FA free of the FA income and assets tests.
Act reference: SSAct section 1210(1) Application of income and assets test reductions and of compensation reductions for income tax purposes, section 1134(1) Effect of participation in pension loans scheme-pension or allowance rate
The interest rate of the PLS is a compound interest rate and is applied to the outstanding loan debt each fortnight. The outstanding loan debt consists of the principal plus previously accrued interest, less any repayments made by the person.
Note: The interest rate is set by the relevant Minister, and is published on the Federal Register of Legislation.
Interest continues to accrue each fortnight on the outstanding balance until the loan has been repaid in full. If the debt is fully repaid, interest is charged up to the date of repayment. The following table shows the interest rates since the start of the scheme:
|Date of effect||Interest rate|
|1 January 2020 to present||4.50%|
|25 December 1997 to 31 December 2019||5.25%|
|20 March 1997 to 24 December 1997||6.25%|
|10 July 1996 to 19 March 1997||7.90%|
|1985 to 10 July 1996||10%|
The loan is paid from the first fortnight after the claim is granted unless a customer requests otherwise and delegate is satisfied that the:
- person is qualified for PLS, AND
- the loan is payable.