# 4.10.1.20 Historical Calculation of Pension Rate under the Means Test - March 1951 to November 1976

## Summary

This topic contains an example of the calculation of pension rate under the means test from 9 March 1951 to 25 November 1976.

This topic covers the following matters:

• calculation of rate, and
• calculation of RA.

## Calculation of rate

This example shows how to calculate the rate of pension payable to a married couple under the means test, using rates as at 4 October 1973. Amounts are in dollars. The following table shows the financial circumstances of the couple.

Ownership Income (SSAct section 8(1)-'income') Property
Person 2,000 5,280
Partner 1,000 1,000
Total 3,000 6,800

The following table shows the steps in the calculation of the pension rate for single and partnered.

Step Action Single Partnered
1

Determine the income reduced for children.

- Couple's total income

- Less allowable income for 2 children

- RESULT: INCOME REDUCED FOR CHILDREN

3,000.00

624.00

2,376.00

3,000.00

624.00

2,376.00

2

Determine the property component.

• Total property
• Less exempt amount = \$400 × 2
• RESULT: NET PROPERTY TOTAL
• Divide by 10
• RESULT: PROPERTY COMPONENT

6,800.00

800.00

5,480.00

548.00

6,800.00

800.00

5,480.00

548.00

3

Determine the means as assessed.

• Income reduced for children
• RESULT: MEANS AS ASSESSED

2,376.00

548.00

2,924.00

2,376.00

548.00

2,924.00

4

Determine the means affecting the rate.

• Means as assessed
• Less permissible means as assessed
• Divide by 2
• RESULT: MEANS AFFECTING THE RATE

2,924.00

1,794.00

565.00

2,924.00

1,794.00

565.00

5

If there ARE children, go to step 7.

If there were NO children, the FINAL step is step 6.

6

Determine the deduction from the maximum pension rate.

• Maximum pension rate
• Less means affecting the rate (divide the means affecting by 2 for couples)
• RESULT: RATE OF PENSION

1,196.00

565.00

631.00

1,053.00

282.50

770.50

7

Determine the excess of means for each partner.

• Means affecting the rate
• Less additional pension for children. In this case there are 2 children =\$260 × 2
• Divide by 2 (if partnered)
• RESULT: EXCESS OF MEANS

565.00

520.00

45.00

565.00

520.00

45.00

22.50

(each)

8

Determine the fortnightly rate of pension for each partner.

• Maximum pension (as at 4/10/73)
• Add guardian allowance (if single)
• Less excess of means
• RESULT: ANNUAL RATE ASSESSED
• Divide by 26
• RESULT: FORTNIGHTLY RATE

1,196.00

208.00

45.00

1,359.00

52.20

1,053.00

22.50

1,030,50

39.60

Explanation: If there were NO children, the rates would be determined as follows:

Single Partnered
Maximum pension (as at 4/10/1973) \$1,196.00 \$1,053.00
Less means affecting rate \$565.00 \$565.00
Divide by 2 (if partnered)   \$282.50
Result: ANNUAL RATE ASSESSED \$631.00 \$770.50 each

## Calculation of RA

The following table shows the steps in calculating the rate of RA payable, based on the pension rate as at 4 October 1973. Amounts are in dollars.

Step Action \$
1

Determine the interim amount of RA.

• Maximum RA
• Less allowable means as assessed
• RESULT: INTERIM AMOUNT OF RA

260.00

52.00

312.00

2

Determine the actual means as assessed:

• Means as assessed, OR
• Half the combined means as assessed for each partner
• RESULT: ACTUAL MEANS AS ASSESSED

Assume 100.00

52.00

100.00

4

Determine the annual rate of RA payable.

• Interim amount of RA
• Less actual means as assessed
• RESULT: ANNUAL RATE OF RA PAYABLE
• Divide by 2
• RESULT: AMOUNT PAYABLE TO EACH PARTNER

312.00

100.00

212.00

106.00

Note: Before 5 September 1985 RA was known as 'supplementary assistance'.

Last reviewed: 7 November 2016