10.1.9.70 Inside Australia rate - one of a couple paid under the direct deduction rate
One of a couple paid under an agreement
Sometimes one of a couple is entitled to an Australian pension autonomously and one is entitled to a pension under an agreement. When this happens the rate payable to the partner paid under the agreement may be zero.
Example: A couple both claim age pension. The husband qualifies under the Agreement with Italy and the wife qualifies autonomously. The husband receives Italian pension of $18,000 per annum and the wife receives an Italian pension of $14,000 per annum. They have other income of $3,000 per annum between them.
Note: Pension rate used is hypothetical and is for illustration purposes only.
| Step | Action | |
|---|---|---|
| 1 | Apportion the Italian pension to each partner as follows: | |
| Husband's Italian pension Wife's Italian Pension Total Divide by 2 |
$18,000 $14,000 $32,000 $16,000 |
|
| 2 | Calculate the agreement pension first by deducting $16,000 from the maximum married rate. | |
| Maximum rate Less share of Italian pension Excess Italian pensions |
$15,841 $16,000 -$159 |
|
| The husband's rate is NIL. | ||
| 3 | Calculate the autonomous rate of pension disregarding (for the income test) the amount of deducted Italian pension in Step 2. | |
|
Income Calculation Italian pension income Other income Total income Less wife's ordinary income free area Affecting income Taper (50 cents in every $) Rate Calculation Maximum married rate Less affecting income Rate payable to wife |
$16,000 $1,500 $17,500 $2,970 $14,530 $7,265
$15,841 $7,265 $8,576 per annum |
|
| 4 | Compare income test rate to assets test rate and pay whichever is the lesser. | |
2009 Pension Reform transitional provisions
As part of reforms to pensions from 20 September 2009, a person's pension may be paid under transitional arrangements where this provides a higher rate of payment.
Further information on the transitional arrangements is at 5.1.8.40.
Act reference: SSAct Schedule 1A Savings and transitional provisions
Policy reference: SS Guide 5.1.8.40 Pension reform - transitional arrangements
Work bonus
From 20 September 2009 a work bonus applies to pensioners of age pension age (except PPS).
The work bonus allows for a certain amount of employment income that is paid in an instalment period by a pensioner who is of age pension age (except PPS) to be disregarded for the purposes of the pension income test. From 1 July 2019, the work bonus was expanded to include income from self-employment from gainful work, as well as employment income.