5.5.3.30 Partnered NSA recipient, partner's income results in nil rate, or partner not on income support

Summary

This topic shows the basic rate calculation when partner 1 is on NSA and partner 2 is on NSA but is in a nil-rate period as they have an income that is sufficient to reduce their own NSA rate to nil. In this example partner 2's income is also sufficient to reduce partner 1's NSA rate. These calculations use Benefit Rate Calculator B.

Note: The method described will apply to any payment in Benefit Rate Calculator B (e.g. PA with an NSA partner). Phase 2 is also applied where one partner is not in receipt of an income support payment using the relevant partner income free area for situations where the partner is not receiving income support.

The couple, both 22 years and over but less than age pension age, receive the income listed in the following table.

Partner Employment income Other continuing income
1 - 140.00
2 1,000.00 -

The following 2 tables show the steps involved in the basic rate calculation. The rates and income test parameters used applied at 20 September 2019 and are shown in dollars per fortnight. Current rates can be obtained from the A guide to Australian Government payments booklet on the DHS website.

The first phase of the calculation is to determine the effect of each partner's own income on their individual payment rates under the personal income test. The following table shows how this is done.

Step Action Partner 1 Partner 2
1 Determine each partner's ordinary income (1.1.O.30):
  • Assessable earned income
  • Add any other income

RESULT: PARTNER'S ORDINARY INCOME

0.00

140.00

140.00

1,000.00

0.00

1,000.00

2 Apply the personal income test to these amounts:
  1. For income between $104.00 and $254.00, multiply by 0.5
    Partner 1:
    = ($140.00 − $104.00) × 0.5
    = $36.00 × 0.5
    = $18.00
    Partner 2:
    = ($254.00 − $104.00) × 0.5
    = $150.00 × 0.5
    = $75.00
  2. For income above $254.00, multiply by 0.6
    Partner 1: nil.
    Partner 2:
    = ($1,000.00 − $254.00) × 0.6
    = $746.00 × 0.6
    = $447.60
  3. Add a and b
    Partner 1: $18.00 + $0.00 = $18.00
    Partner 2: $75.00 + $447.60 = $522.60

RESULT: INCOME REDUCTION

 

 

 

 

18.00

 

 

 

 

0.00

 

 

 

 

18.00

 

 

 

 

 

 

75.00

 

 

447.60

 

 

 

 

522.60

3 Determine the maximum payment rate:
  • Locate the maximum rate
  • Add the applicable rate of ES

RESULT: MAXIMUM PAYMENT RATE

504.70

7.90

512.60

504.70

7.90

512.60

4 Subtract the income reduction from the maximum payment rate:
  • Maximum payment rate
  • Less income reduction

RESULT: INDIVIDUAL RATES (under personal income test)

512.60

18.00

494.60

512.60

522.60

-10.00

nil rate as < 0.00

The next phase of the calculation is to determine the effect of partner 2's income on partner 1's payment by applying the partner income test to partner 2. The following table shows how this is done.

Step Action $
1 Determine the partner income free area where partner is receiving an allowance:

Maximum rate for partner 2 (see Step 3 of table above)

  • Less lower range reduction
    = $150.00 × 0.5
    = $75.00

Result: reduced rate

  • Divide by 0.6
    = $437.60 ÷ 0.6
    = $729.33
  • Add $254.00
    =$729.33 + $254.00
    = $983.33
  • Round up to the nearest whole dollar

RESULT: PARTNER INCOME FREE AREA

512.60

 

75.00

437.60

729.33

 

983.33

 

984.00

2 Determine partner excess:
  • Partner income
  • Less partner income free area
    =$1,000.00 - $984.00
    = $16.00

RESULT: PARTNER EXCESS

 

1,000.00

 

 

16.00

3 Determine partner income reduction:
  • Partner excess
  • Multiply by 0.6

RESULT: PARTNER INCOME REDUCTION

16.00

9.60

9.60

4 Determine rate payable to partner 1:
  • Rate from individual calculation (under personal income test)
  • Deduct partner income reduction

RESULT: RATE PAYABLE TO PARTNER 1

494.60

9.60

485.00

Note: This table is used to calculate the effect of partner income in situations where the partner is not receiving income support. The partner income free area is calculated using Module G, depending on the partner's circumstances.

Policy reference: SS Guide 4.2.2 Benefits Income Test & Limits, 3.15.2 ES - Qualification & Payability

Last reviewed: 20 September 2019