18.104.22.168 PPS income & assets tests & limits
This topic covers the following matters:
- the ordinary income test
- income free area limits
- how income reduces payment
- compensation (1.1.C.240) income
- the effect of the IMP, and
- the PPS assets test.
Ordinary income test
The following table shows the 4 steps involved in applying the ordinary income test for PPS.
|1||Determine the person's ordinary income for the fortnight.|
|2||Determine the person's ordinary income free area limit.|
|3||Does the person's ordinary income exceed their ordinary income free area?
|4||Determine 40% of the ordinary income excess.
RESULT: THE REDUCTION FOR ORDINARY INCOME.
Income free area limits
These limits are indexed from 1 July each year.
How income reduces payments
Income over the income free area limit reduces the payment received by 40 cents in the dollar until the payment is reduced to nil.
Act reference: SSAct section 1068A-E1 Effect of income on maximum payment rate
Policy reference: SS Guide 22.214.171.124 Pensions income test, 126.96.36.199 Additional Free Area for Dependent Children, 4.2.2 Benefits Income Test & Limits, 188.8.131.52 Determining the Rate of Income for PP, 5.5.4 Samples of PP Rate Calculations
Compensation such as weekly worker's compensation payments, are assessed under a separate income test. Lump sum compensation payments are also subject to special rules.
Act reference: SSAct section 17 Compensation recovery definitions, Part 3.14 Compensation recovery
Effect of IMP
An IMP applies to leave and redundancy payments received from employment, in the same way as the benefits income test.
Policy reference: SS Guide 4.3.4 Income Maintenance Period
PPS assets test
PPS is subject to the benefits assets test. PPS is NOT payable if a recipient's assets exceed those limits.