The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia. Incentive allowance & DSP


IA was payable before the introduction of DSP on 12 November 1991, to all:

  • recipients receiving sheltered employment allowance, AND
  • invalid pension recipients who were undertaking
    • training at an activity therapy centre
    • training at an adult training centre, or
    • independent living training.

Savings provision

IA was abolished upon the introduction of DSP. A savings provision applies however to all recipients who were receiving IA at 11 November 1991. IA remains payable at the rate applicable at 11 November to recipients who:

  • were qualified for IA immediately before 12 November 1991, AND
  • were receiving DSP on 12 November 1991.


IA rates are frozen at the rate payable at 11 November 1991. The rates are $62 per fortnight (pf) for recipients without dependents, $72.40 pf for recipients with one or 2 dependent children and $82.70 pf for recipients with 3 or more dependent children.

How does IA affect DSP?

If a recipient's rate of DSP includes an amount for IA, then their rate of DSP cannot include an amount for RA.

The recipient may choose to have the amount for IA excluded from their DSP rate to enable them to be paid RA if they are qualified for it.

Recipients who used to receive sheltered employment allowance

A former recipient of sheltered employment allowance who transferred to DSP, remains qualified for IA if the recipient is ENGAGED IN supported employment (1.1.S.430), that is employment at an Australian disability enterprise. A physical absence from a supported employment program does not necessarily mean that the recipient has ceased to be engaged in that employment. It must be clear that there has been a severance of supported employment for a recipient to cease to be qualified for IA.

What is an absence from supported employment?

A recipient remains engaged in supported employment during physical absences if the recipient is absent on paid or unpaid leave and intends to resume their employment at the end of the leave period.

Example: A recipient would continue to receive IA during temporary absences from supported employment such as:

  • employer closures during holiday periods
  • other absences, including sick leave, and
  • periods of long service leave.

The reason for the absence, not the length of the absence, is the critical factor in deciding whether a recipient remains qualified for IA. IA can remain payable as long as there has not been a severance of the supported employment, regardless of the length of the absence.

The same provision applies in relation to absences from activity therapy centres, adult training centres and independent living training if the decision maker is satisfied that the recipient will return to the centre or program.

Qualification for IA continues if an IA recipient transfers from one qualifying activity to another.

Example: A recipient transfers from one Australian disability enterprise to another.

Act reference: SSAct Schedule 1A clause 36 Incentive allowance (changes introduced on 12 November 1991)

Last reviewed: