5.1.8.60 Transition to JSP - transitional arrangements for former recipients of WP

Summary

This topic outlines the transitional arrangements that apply to JSP recipients who were receiving WP on 19 March 2020.

This page contains information on the following:

  • background
  • overview of the transitional arrangements
  • eligibility for transitional arrangements
  • application of transitional arrangements
  • example 1: calculating the rate of JSP under the transitional arrangements - method 1
  • example 2: calculating the rate of JSP under the transitional arrangements - method 2 for those with income or assets below pension thresholds but above the NSA income free area
  • example 3: calculating the rate of JSP under the transitional arrangements - method 2 for those with income or assets above pension thresholds
  • treatment of those affected by the 2009 pension reform transitional arrangements.

Background

WP was a non-activity tested income support payment for female partners of Age and DSP recipients. It was paid at the rate equivalent to Age.

WP was closed to new entrants on 1 July 1995. On 20 March 2020, JSP commenced and replaced a range of existing payments, including WP.

Former WP recipients moved to alternative social security payments depending on their circumstances on 19 March 2020. Former WP recipients:

  • over age pension age moved to Age
  • in receipt of CA moved to CP
  • under age pension age and not in receipt of CA moved to JSP with transitional arrangements to ensure their rate of payment was not reduced as long as their circumstances remained unchanged.

Act reference: SSAct section 43(1B) Qualification for Age, section 198AD Qualification - WP and CA recipient, section 654 Rate of JSP for former recipients of WP

Policy reference: SS Guide 1.2.3.20 Wife pension (WP) - description, 3.6.4.55 Qualification for CP for ex WP recipients, 1.2.1.05 Jobseeker payment (JSP) - description

Overview of transitional arrangements

Social security legislation established transitional arrangements for women moving from WP to JSP. The transitional arrangements allow former WP recipients affected by the introduction of JSP to maintain their former rate of payment until such time that the amount payable under JSP exceeds the rate they would have received under the WP.

From 20 March 2020, the payment rate and means test thresholds that applied on 19 March 2020 will be frozen for JSP recipients who qualify for the transitional arrangements. A comparison will be made between the rate worked out using the frozen amounts and the current rate of JSP. The recipient will receive whichever rate of payment is higher.

The transitional arrangements differ based on the individual circumstance of the former WP recipient immediately prior to 20 March 2020, with 2 methods applicable:

  • Method 1 applies to recipients who
    • on 19 March 2020 had income and assets below the pension income and assets tests free areas, and
    • had income below the NSA income test free area each day during the period between 6 February 2020 and 19 March 2020 inclusive.
  • Method 2 applies to recipients who
    • on 19 March 2020 have income or assets above either or both the pension income and assets free areas, or
    • have income above the NSA income test free area on at least 1 day during the period between 6 February 2020 and 19 March 2020 inclusive.

Once a method is established, then that method is used to work out a recipient's transitional payment rate as long as they maintain their transitional status.

Act reference: SSAct section 655(1) WP transition rate - method 1, section 656(1) WP transition rate - method 2

Eligibility for transitional arrangements

Transitional arrangements apply to former recipients of WP if:

  • they were receiving WP immediately before 20 March 2020, and
  • they continue to meet the qualification requirements of WP as in force immediately prior to 20 March 2020.

Transitional arrangements will cease to apply if:

  • the JSP rate exceeds the WP transition rate for a period of 42 consecutive days, and/or
  • the recipient would not have qualified for WP under all of the rules that applied immediately prior to 20 March 2020 (e.g. if their partner dies or from exceeding the pension income or assets tests cut-outs).

If a recipient loses access to the transitional arrangements, then the recipient's JSP rate is to be worked out in accordance with the normal JSP rules.

Transitional status cannot be reinstated or regained once it is lost.

Act reference: SSAct section 654(1) Rate of JSP for former recipients of WP, section 654(5) If, for a period of 42 consecutive days …, section 654(6) If, on a day (the cessation day) on or after 20 March 2020 …

Application of transitional arrangements

The transitional arrangements apply from 20 March 2020. They apply only to those JSP recipients who meet the eligibility requirements for former recipients of WP.

The rate of payment is calculated in accordance with the method statement in Table A:

Table A
Step Action
1 Work out JSP rate. See Note 1.
2 Work out WP transition rate based on method 1 or method 2. See Note 2.
3 If the WP transition rate exceeds the JSP rate, the rate is the WP transition rate.
4 If the WP transition rate does not exceed the JSP rate, the rate is the JSP rate.

Note 1: In working out the JSP rate, only the income test is applied. The JSP assets test is disregarded. This allows former WP recipients to retain payability under JSP who may have otherwise not qualified due to their assets being over the assets value limit.

Note 2: The WP transition rate for recipients assessed under method 1 is the pension rate payable with the following modifications:

  • pension basic rate, pension supplement, and pension assets test thresholds frozen as they were on 19 March 2020, and
  • JSP income test thresholds (not frozen).

The WP transition rate for recipients assessed under method 2 is the pension rate payable with the following modifications:

  • pension basic rate, pension supplement, and pension income and assets test thresholds frozen as they were on 19 March 2020.

Act reference: SSAct section 654(2) Rate of JSP for former recipients of WP, section 654(3) Method statement (Rate of JSP for former recipients of WP), section 655(2) WP transition rate - method 1, section 655(3) However, subsection (2) applies with the following modifications …, section 656(2) WP transition rate - method 2, section 656(3) However, subsection (2) applies with the following modifications …

Example 1: Calculating the rate of JSP under the transitional arrangements - method 1

The rate calculation below is an example of the method 1 calculation used for recipients of JSP who in the period between 6 February to 19 March 2020 (inclusive) were receiving WP and had income and assets below the pension income and assets test free areas AND income below the NSA income free areas.

For this example, the recipient is assumed to have $50 of private income and her partner is assumed to have $30 (making a total of $80 for the couple combined, each with a share of $40) and $100,000 worth of assessable assets (they own their own home).

Step 1: Work out JSP rate

The JSP is worked out using Benefit Rate Calculator B under section 1068 of the SSAct via the following method statement.

Note: Rates are an illustrative guide, based on rates as at 20 September 2019, recognising that the pension rates for WP have been paused.

Note: The following rate calculation includes steps which refer to amounts of pension supplement, PhA, RA, SEA, advance payments and RAA. These steps are included since the amounts may be relevant in some instances. However, in the example provided, these amounts are not relevant and produce a $0 amount.

Table B
Step Action SSAct reference $
1

Work out the person's MBR

Work out the pension supplement amount

Work out the ES

section 1068 Module B

section 1068 Module BA

section 1068 Module C

504.70

0

7.90

2 Work out the PhA amount section 1068 Module D 0
3 Work out the applicable RA amount section 1070Q 0
4 Work out the maximum payment rate by adding up the amounts above   504.70 + 7.90 = 512.60
5 Apply the income test to work out the income test reduction section 1068 Module G  
  • Work out the ordinary income
  40
  • Work out the income free area
section 1068-G12 104
  • Work out if ordinary income exceeds the income free area
  40 - 104 = 0
  • Work out the ordinary income reduction
section 1068-A1 0
6 Take the income reduction from the maximum payment rate   512.60 - 0 = 512.60
7

Work out the rate of benefit paid:

  • Subtract any SEA deduction
  • Subtract any advance payment deduction
  • Add any RAA
 

 

0
0
0

Final rate 512.60

Step 2: Work out WP transition rate

The WP transition rate is worked out using Pension Rate Calculator A under section 1064 of the SSAct, with some modifications, via the following method statement.

Note: Rates are an illustrative guide, based on rates as at 20 September 2019, recognising that the pension rates for WP have been paused.

Note: The following rate calculation includes steps which refer to amounts of pension supplement, PhA, RA, SEA, advance payments and RAA. These steps are included since the amounts may be relevant in some instances. However, in the example provided, these amounts are not relevant and produce a $0 amount.

Table C
Step Action SSAct reference $
1

Work out the person's MBR (Note: This amount is frozen at the 19 March 2020 amount.)

Work out the pension supplement amount (Note: This amount is frozen at the 19 March 2020 amount.)

Work out the ES

section 1064 Module B

section 1064 Module BA

section 1064 Module C

641

51.90

10.60

2 Work out the applicable RA amount section 1070Q 0
3 Work out the maximum payment rate by adding up the amounts above   641 + 51.90 + 10.60 = 703.50
4

Note: THIS IS THE ALLOWANCE INCOME TEST.

Apply the income test to work out the income test reduction

section 1068 Module G  
Work out the ordinary income   40
Work out the income free area section 1068-G12 104
Work out if ordinary income exceeds the income free area   40 - 104 = 0
Work out the ordinary income reduction section 1068-A1 0
5 Take the income reduction from the maximum payment rate   703.50 - 0 = 703.50
6
Apply the assets test to work out the reduction for assets section 1064 Module G  
  • Work out the assets
  50,000
  • Work out the assets value limit (Note: This amount is frozen at the 19 March 2020 amount.)
section 1064-G3 197,250
  • Work out if the assets exceeds the assets value limit
  50,000 - 197,250 = 0

 

  • Work out the reduction for assets
  0
7 Take the reduction for assets from the maximum payment rate   703.50 - 0 = 703.50
8 Compare the income reduced rate and the assets reduced rate, with the lower being the provisional payment rate   703.50 vs 703.50 = 703.50
9

Work out the rate of benefit paid:

  • Subtract any SEA deduction
  • Subtract any advance payment deduction
  • Add any RAA
 

 

0
0
0

Final rate 703.50

Step 3: Compare the rates at step 1 & step 2

The rate of JSP for former recipients of WP is calculated by comparing the rate determined under step 1 with the rate determined under step 2, with the higher of the 2 being the recipient's JSP rate.

Table D
Step Action $
1 JSP rate from step 1 (Table B) 512.60
2 WP transition rate from step 2 (Table C) 703.50
3 Compare the 2 rates from steps 1 and 2 (Tables B and C) 512.60 vs 703.50
4 The higher of the 2 is the transitional JSP rate 703.50

Act reference: SSAct section 655 WP transition rate - method 1, section 1064 Rate of age and disability support pensions and CP (people who are not blind), section 1068 Rate of WA, JSP (18 or over), SA (18 or over), PA and MAA under Part 2.12B

Example 2: Calculating the rate of JSP under the transitional arrangements - method 2 for those with income or assets below pension thresholds but above the NSA income free area

The rate calculation below is an example of the method 2 calculation used for recipients of JSP who in the period between 6 February to 19 March 2020 (inclusive) were receiving WP and had income and assets above either or both the pension income and assets test free areas OR in the period between 6 February to 19 March 2020 had income above the NSA income free area for at least 1 day.

In this example, the recipient had income above the NSA income free area, but below the pension income free area, as well as assets below the pension assets test free area. For the example, the recipient is assumed to have $50 of private income and her partner is assumed to have $200 of private income (making a total of $250 for the couple combined, each with a share of $125) and $200,000 worth of assessable assets (they own their own home).

Step 1: Work out JSP rate

The JSP rate is worked out using Benefit Rate Calculator B under section 1068 of the SSAct via the following method statement.

Note: Rates are an illustrative guide, based on rates as at 20 September 2019, recognising that the pension rates for WP have been paused.

Note: The following rate calculation includes steps which refer to amounts of pension supplement, PhA, RA, SEA, advance payments and RAA. These steps are included since the amounts may be relevant in some instances. However, in the example provided, these amounts are not relevant and produce a $0 amount.

Note: For allowances, the assets test free area represents a limit at which any amount over the free area reduces the recipient's entitlement to nil. Under the transitional arrangements, this provision is disregarded. This is to allow former WP recipients with assets over the assets free area to have their rate calculated as per the transitional rate calculation.

Table E
Step Action SSAct reference $
1

Work out the person's MBR

Work out the pension supplement amount

Work out the ES

section 1068 Module B

section 1068 Module BA

section 1068 Module C

504.70

N/A

7.90

2 Work out the PhA amount section 1068 Module D 0
3 Work out the applicable RA amount section 1070Q 0
4 Work out the maximum payment rate by adding up the amounts above   504.70 + 7.90 = 512.60
5
Apply the income test to work out the income test reduction section 1068 Module G  
  • Work out the ordinary income
  125
  • Work out the income free area
section 1068-G12 104
  • Work out if ordinary income exceeds the income free area
  125 - 104 = 21
  • Work out the ordinary income reduction
section 1068-A1 21 x 50% = 10.50
6 Take the income reduction from the maximum payment rate   512.60 - 10.50 = 502.10
7 Work out the rate of benefit paid:
  • Subtract any SEA deduction
  • Subtract any advance payment deduction
  • Add any RAA
 

0
0
0

Final rate 502.10

Step 2: Work out WP transition rate

The WP transition rate is worked out using Pension Rate Calculator A under section 1064 of the SSAct, with some modifications, via the following method statement.

Note: Rates are an illustrative guide, based on rates as at 20 September 2019, recognising that the pension rates for WP have been paused.

Note: The following rate calculation includes steps which refer to amounts of pension supplement, PhA, RA, SEA, advance payments and RAA. These steps are included since the amounts may be relevant in some instances. However, in the example provided, these amounts are not relevant and produce a $0 amount.

Table F
Step Action SSAct reference $
1

Work out the person's MBR (Note: This amount is frozen at the 19 March 2020 amount.)

Work out the pension supplement amount (Note: This amount is frozen at the 19 March 2020 amount.)

Work out the ES

section 1064 Module B

section 1064 Module BA

section 1064 Module C

641

51.90

10.60

2 Work out the applicable RA amount section 1070Q 0
3 Work out the maximum payment rate by adding up the amounts above   703.50
4 Apply the income test to work out the income test reduction section 1064 Module E  
  • Work out the ordinary income
  125
  • Work out the income free area (Note: This amount is frozen at the 19 March 2020 amount.)
section 1064-E4 154
  • Work out if ordinary income exceeds the income free area
  125 - 154 = 0
  • Work out the ordinary income reduction
section 1064-E10 to section 1064-E11 0
5 Take the income reduction from the maximum payment rate   703.50 - 0 = 703.50
6 Apply the assets test to work out the reduction for assets section 1064 Module G  
  • Work out the assets
  100,000
  • Work out the assets value limit (Note: This amount is frozen at the 19 March 2020 amount.)
section 1064-G3 197,250
  • Work out if the assets exceeds the assets value limit
  100,000 - 197,250 = 0
  • Work out the reduction for assets
  0
7 Take the reduction for assets from the maximum payment rate   703.50 - 0 = 703.50
8 Compare the income reduced rate and the assets reduced rate, with the lower being the provisional payment rate   703.50 vs 703.50 = 703.50
9

Work out the rate of benefit paid:

  • Subtract any SEA deduction
  • Subtract any advance payment deduction
  • Add any RAA
 

 

0
0
0

Final rate 703.50

Step 3: Compare the rates at step 1 & step 2

The rate of JSP for former recipients of WP is calculated by comparing the rate determined under step 1 and the rate determined under step 2, with the higher of the 2 being the recipient's JSP rate.

Table G
Step Action $
1 JSP rate from step 1 (Table E) 502.10
2 WP transition rate from step 2 (Table F) 703.50
3 Compare the 2 rates from steps 1 and 2 (Tables E and F) 502.10 vs 703.50
4 The higher of the 2 is the transitional JSP rate 703.50

Act reference: SSAct section 654(2) Rate of JSP for former recipients of WP, section 656 WP transition rate - method 2, section 1064 Rate of age and disability support pensions and CP (people who are not blind), section 1068 Rate of WA, JSP (18 or over), SA (18 or over), PA and MAA under Part 2.12B

Example 3: Calculating the rate of JSP under the transitional arrangements - method 2 for those with income or assets above pension thresholds

The rate calculation below is an example of the method 2 calculation used for recipients of JSP who in the period between 6 February to 19 March 2020 (inclusive) were receiving WP and had income and assets above either or both the pension income and assets test free areas OR in the period between 6 February to 19 March 2020 had income above the NSA income free area for at least 1 day. In this example, the recipient had income above both the NSA income free area and the pension income free area, as well as assets above the pension assets test free area. For the example, the recipient is assumed to have $550 of private income and her partner is assumed to have $450 of private income (making a total of $1000 for the couple combined, each with a share of $500) and $400,000 worth of assessable assets (they own their own home).

Step 1: Work out JSP rate

The JSP rate is worked out using Benefit Rate Calculator B under section 1068 via the following method statement.

Note: Rates are an illustrative guide, based on rates as at 20 September 2019, recognising that the pension rates for WP have been paused.

Note: The following rate calculation includes steps which refer to amounts of pension supplement, PhA, RA, SEA, advance payments and RAA. These steps are included since the amounts may be relevant in some instances. However, in the example provided, these amounts are not relevant and produce a $0 amount.

Note: For allowances, the assets test free area represents a limit at which any amount over the free area reduces the recipient's entitlement to nil. Under the transitional arrangements, this provision is disregarded. This is to allow former WP recipients with assets over the assets free area to have their rate calculated as per the transitional rate calculation.

Table H
Step Action SSAct reference $
1

Work out the person's MBR

Work out the pension supplement amount

Work out the ES

section 1068 Module B

section 1068 Module BA

section 1068 Module C

504.70

N/A

7.90

2 Work out the PhA amount section 1068 Module D 0
3 Work out the applicable RA amount section 1070Q 0
4 Work out the maximum payment rate by adding up the amounts above   504.70 + 7.90 = 512.60
5 Apply the income test to work out the income test reduction section 1068 Module G  
Work out the ordinary income   500
Work out the income free area section 1068-G12 104
Work out if ordinary income exceeds the income free area   500 - 104 = 396

Work out the ordinary income reduction

  • Excess income below $254 receives a 50 cent taper rate
    ($254 - $104 = $150)
  • Excess income above $254 receives a 60 cent taper rate
    ($500 - 254 = $246)
section 1068-A1

 

150 x 50% = 75
246 x 60% = 147.60
75 + 147.60 = 222.60

6 Take the income reduction from the maximum payment rate   512.60 - 222.60 = 290
7 Work out the rate of benefit paid:
  • Subtract any SEA deduction
  • Subtract any advance payment deduction
  • Add any RAA
 

0
0
0

Final rate 290

Step 2: Work out WP transition rate

The WP transition rate is worked out using Pension Rate Calculator A under section 1064 of the SSAct, with some modifications, via the following method statement.

Note: Rates are an illustrative guide, based on rates as at 20 September 2019, recognising that the pension rates for WP have been paused.

Note: The following rate calculation includes steps which refer to amounts of pension supplement, PhA, RA, SEA, advance payments and RAA. These steps are included since the amounts may be relevant in some instances. However, in the example provided, these amounts are not relevant and produce a $0 amount.

Table I
Step Action SSAct reference $
1

Work out the person's MBR (Note: This amount is frozen at the 19 March 2020 amount.)

Work out the pension supplement amount (Note: This amount is frozen at the 19 March 2020 amount.)

Work out the ES

section 1064 Module B

section 1064 Module BA

section 1064 Module C

641

51.90

10.60

2 Work out the applicable RA amount section 1070Q 0
3 Work out the maximum payment rate by adding up the amounts above   641 + 51.90 + 10.60 = 703.50
4 Apply the income test to work out the income test reduction section 1064 Module E  
  • Work out the ordinary income
  500
  • Work out the income free area (Note: This amount is frozen at the 19 March 2020 amount.)
section 1064-E4 154
  • Work out if ordinary income exceeds the income free area
  500 - 154 = 346
  • Work out the ordinary income reduction
section 1064-E10 to section 1064-E11 346 × 50% = 173
5 Take the income reduction from the maximum payment rate   703.50 - 173 = 530.50
6 Apply the assets test to work out the reduction for assets section 1064 Module G  
  • Work out the assets
  200,000
  • Work out the assets value limit (Note: This amount is frozen at the 19 March 2020 amount.)
section 1064-G3 197,250
  • Work out if the assets exceeds the assets value limit
  200,000 - 197,250 = 2,750
  • Work out the reduction for assets
  3 reduction per 1,000 (2,750) = 8.25
7 Take the reduction for assets from the maximum payment rate   703.50 - 8.25 = 695.25
8 Compare the income reduced rate and the assets reduced rate, with the lower being the provisional payment rate  

530.50 vs 695.25 = 530.50

9

Work out the rate of benefit paid:

  • Subtract any SEA deduction
  • Subtract any advance payment deduction
  • Add any RAA
 

0
0
0

Final rate 530.50

Step 3: Compare the rates at step 1 & step 2

The rate of JSP for former recipients of WP is calculated by comparing the rate determined under step 1 and the rate determined under step 2, with the higher of the 2 being the recipient's JSP rate.

Table J
Step Action $
1 JSP rate from step 1 (Table H) 290
2 WP transition rate from step 2 (Table I) 530.50
3 Compare the 2 rates from steps 1 and 2 (Table H and I) 290 vs 530.50
4 The higher of the 2 is the transitional JSP rate 530.50

Act reference: SSAct section 656 WP transition rate - method 2, section 1064 Rate of age and disability support pensions and CP (people who are not blind), section 1068 Rate of WA, JSP (18 or over), SA (18 or over), PA and MAA under Part 2.12B, section 654(2) Rate of JSP for former recipients of WP

Treatment of those affected by the 2009 pension reform transitional arrangements

Former recipients of WP who were eligible for the transitional arrangements under the 2009 pension reforms will be assessed using method 2 of the JSP transitional arrangements taking place prior to the transitional calculation for JSP.

For these recipients, the WP transition is then worked out using the transitional arrangements created as part of the 2009 pension reforms (i.e. a 40 cent income test taper) and with rates and amounts payable under the transitional arrangements from the 2009 pension reforms frozen as at 19 March 2020. This rate is then compared against the rate of JSP, with the higher rate paid to the recipient.

Act reference: SSAct section 656(4) WP transition rate - method 2

Policy reference: SS Guide 5.1.8.40 Pension reform - transitional arrangements, 5.2.2.15 Historical transitional pension rates payable from 20/09/2009

Last reviewed: 20 March 2020