4.2.4.10 PPS income & assets tests & limits

Summary

This topic describes the ordinary income (1.1.O.30) and assets tests and limits for PPS. The income and assets tests for PPP are described in a separate topic, 4.2.4.20.

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.

Step Action
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?
  • If NO, the ordinary income excess in NIL.
  • If YES, the difference is the ORDINARY INCOME EXCESS.
4 Determine 40% of the ordinary income excess.

RESULT: THE REDUCTION FOR ORDINARY INCOME.

Income free area limits

Information on current income free areas and income limits for PPS can be obtained from the Parenting Payment - Income and assets tests page on the DHS website.

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 4.2.1.10 Pensions income test, 4.2.1.20 Additional Free Area for Dependent Children, 4.2.2 Benefits Income Test & Limits, 4.3.1.40 Determining the Rate of Income for PP, 5.5.4 Samples of PP Rate Calculations

Compensation income

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

Policy reference: SS Guide 3.1.9.10 Compensation & Payability, 4.13 Compensation, 6.4 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.

Act reference: SSAct section 500Q(2) Assets test-payment not payable if assets value limit exceeded

Policy reference: SS Guide 4.2.3 Pensions & benefits assets tests

Last reviewed: 12 August 2019