8.7.6.30 DHS Deductions & Withholdings - Cashless Debit Card Trial

Deductions & withholdings

Once the gross payment is determined each fortnight, the 80/20 split is calculated before any Centrelink deductions or withholdings are processed. Where possible, these deductions and withholdings will be taken from the restricted portion. However, when a person's deductions exceed 80% of their gross payment, the deductions will then reduce the unrestricted portion.

After deductions, the remaining funds will be paid into the trial participant's regular bank account and welfare restricted bank account (8.7.2.50). The exact percentages that will be paid into these accounts will vary, depending on the amount of a person's deductions. However, as a general rule 20% of the gross amount will be put into the participant's regular account (unless the deductions exceeded 80% of the gross amount). The balance is deposited into the participant's welfare restricted bank account.

Lump sums are not split and are 100% restricted. Lump sums are not affected by any deductions.

Example 1: Deductions are less than 80% of gross payment.

Jeff gets a CP (member of a couple rate). He also gets a pension supplement and ES. Jeff is due an arrears payment of the CP of $100.00 to be paid as a lump sum. Jeff has asked DHS to process a number of deductions for him each fortnight.

Description Gross payment
Basic CP $629.00
Pension supplement $51.10
Energy supplement $10.60
Total gross payment: $690.70

Split calculation:

  • 80% restricted = $552.56
  • 20% unrestricted = $138.14

Jeff has the following wihtholdings and deductions which DHS will process:

Withholding/deduction Amount
Withholdings (including debt repayment, overpayment repayment, advance repayment) $38.50
Child support -
Rent Deductions Scheme $125.00
Centrepay -
Penalty -
Tax $10.00
Total of deductions: $173.50

Final calculation for deposit onto restricted Cashless Debit Card:

Description Amount
80% restricted $552.56
Less deductions of $173.50
Subtotal $379.06
Plus lump sum CP arrears $100.00
Total restricted portion paid out: $479.06
Grand total
Restricted portion $479.06
Unrestricted portion $138.14

Example 2: Deductions are greater than 80% of gross payment.

Alex gets a CP (member of a couple rate). He also gets a pension supplement and ES. Alex is due an arrears payment of CP of $100.00 to be paid as a lump sum. Alex has asked DHS to process a number of deductions for him each fortnight.

Description Gross payment
Basic CP $629.00
Pension supplement $51.10
Energy supplement $10.60
Total gross payment: $690.70

Split calculation

  • 80% restricted = $552.56
  • 20% unrestricted = $138.14

Alex has the following withholdings and deductions which DHS will process:

Deduction/withholding Amount
Debt repayment $90.00
Advance repayment $38.50
Child support $44.00
Rent Deductions Scheme $150.00
Centrepay $300.00
Penalty -
Tax $10.00
Total of deductions: $632.50

Final calculation for deposit onto restricted Cashless Debit Card:

Description Amount
80% restricted $552.56
Less deductions of $632.50
Subtotal −$79.94

In this situation, Alex's deductions are greater than the 80% restricted portion so the balance will have to be taken from his unrestricted portion.

Description Amount
Unrestricted portion $138.14
Less balance owing for deductions $79.94
Total for unrestricted portion $58.20
Lump sum CP arrears $100.00
Total restricted portion paid out: $100.00
Grand total
Restricted portion: $100.00
Unrestricted portion: $58.20
Last reviewed: 4 February 2019