4.2.8.20 Dependent YA - maintenance income test

Summary

This topic covers the following matters:

• commencement of the maintenance income test (MIT)
• exemptions from the MIT
• annualised amount of maintenance income
• maintenance income free area (MIFA)
• calculating the 'MIT result'.

In order to calculate the reduction for parental income (4.2.8.05) a dependent YA claimant/recipient must have a MIT result determined. The MIT only assesses maintenance income received by the YA recipient's parent for the purposes of supporting the individual YA recipient. Other maintenance income received by the parent in respect of other dependent children is not counted in this test.

In situations where the YA claimant/recipient is exempt from the MIT or where their parent's maintenance income does not exceed the MIFA, then the MIT result is determined to be nil.

Commencement of MIT

The MIT commenced on 1 January 2017. It cannot affect a person's rate of YA prior to this date.

Exemptions from the MIT

YA claimants/recipients are exempt from the MIT if the claimant/recipient's parent or parent's partner is permanently blind and is receiving:

• an age pension
• a disability support pension
• a service pension, OR
• an income support supplement (VEA Part IIIA).

If the YA claimant/recipient is exempt from the MIT then the MIT result for the YA claimant/recipient is nil.

Annual amount of maintenance income

To work out the annual amount of maintenance income for a parent of the claimant/recipient:

• assume that the YA claimant/recipient is an FTB child of the parent
• only take into account maintenance income received in relation to the YA claimant/recipient
• take into account all maintenance income received in relation to the YA claimant/recipient including voluntary periodic maintenance paid in cash or in kind (for example, the payment of school or university fees)
• in working out whether maintenance income is received in relation to the person, have regard to the considerations that would apply under the FAAct, and
• have regard to maintenance income for the financial year current at the point-in-time at which the YA MIT is applied.

Maintenance income free area (MIFA)

The MIFA is the amount of maintenance income the parent of a YA claimant/recipient can receive in relation to the YA recipient, before it affects the claimant/recipient's rate of YA.

The MIFA for a parent of a YA claimant/recipient draws on some of the principles and thresholds that are used to calculate the FTB Part A MIFA.

The value of the MIFA for each maintained YA claimant/recipient may depend on whether the parent also receives maintenance income for other dependent YA claimants/recipients, or FTB children.

As for the FTB Part A MIFA, the MIFA for YA has 2 components:

1. A component for 'fixed costs' allocated in relation to a first 'maintained' child/young person (the 'first child MIFA amount'). In 2024-25 this amount is $1,960.05.
2. A component allocated for each second and subsequent maintained child/young person (the 'additional child MIFA amount'). In 2024-25 this amount is $653.35 for each additional child.

The amounts for the first child MIFA and additional child MIFA for each financial year are published on 1 July in the Guide to Australian Government Payments.

The rules for extending a MIFA in respect of each maintained child/young person under the MIT for YA coordinate the allocation of the MIFA component for fixed costs so that this is applied once only to a parent receiving maintenance. This includes checking whether recognition for fixed costs of maintenance income received has been, or is likely to be, extended under the FTB Part A MIT (where an individual has maintained children across FTB and YA).

This creates an 'order of precedence' in the extension of the MIFA component for fixed costs whereby:

• If there is a maintained YA recipient and a maintained FTB Child, the FTB Child gets the first child MIFA amount, and the YA recipient gets the additional child MIFA amount.
• If there is no maintained FTB Child, but there is only one maintained YA dependent, then the YA dependent gets the first child MIFA amount.
• If there is no maintained FTB Child, but there is more than one maintained YA dependent, then the YA dependents share the first child MIFA amount and the additional child MIFA amounts.

Table 1: Calculating the MIFA

Note: For the purposes of calculating a YA claimant's/recipient's MIFA, only FTB children and other dependent YA claimants/recipients for whom the parent receives maintenance income are taken into account. Dependents who are neither FTB children nor dependent YA recipients, for example, dependents who attract AIC additional boarding allowance or a means tested ABSTUDY payment, but are not in receipt of YA and are not considered to be FTB children, are not taken into account.

Calculating the MIT result

The YA MIT result is $0.50 for every $1.00 over the MIFA.

Table 2: Calculating the MIT result

Rate increase or decrease determination due to a 'revised estimate of maintenance income'

If a recipient's rate of YA has been recalculated as a result of a revised estimate of maintenance income either made by or given to Services Australia, and Services Australia is satisfied that the revised estimate is reasonable, then the date of effect of the recalculation is the day when the revised estimate was made by or given to Services Australia. The recalculation will not be backdated beyond that date.