22.214.171.124 Income from overseas payments - specific payments
This topic provides information about the following:
- Chilean Pensions of Mercy (Pensiones de Gracia)
- Italian supplement and other exempt payments
- UK Child Benefit
- UK allowances
- UK Bereavement Support Payment, and
- UK Council Tax Reduction.
Chilean Pensions of Mercy (Pensiones de Gracia)
Chilean Pensions of Mercy (Pensiones de Gracia) were established under Chilean law to compensate and repair the moral suffering of victims and relatives of victims of human rights abuse or political violence that occurred in Chile between 11 September 1973 and 10 March 1990.
Monthly payments made under Chilean Law Number 19.123 (Mercy Payments) and Chilean Law Number 19.234 (Periodic Mercy Payments) are exempt from the income test applied to all payments under the social security laws of Australia.
Act reference: SS(IntAgree)Act Schedule 15 Chile
Policy reference: SS Guide 10.16 Agreement with Chile
Italian supplement & other exempt payments
Italian law guarantees a minimum rate of pension. If a recipient has not made sufficient contributions to produce a contributory rate equal to the guaranteed minimum rate of Italian pension, Italy will make an extra payment to bring the actual rate to the minimum rate. This extra payment is known as the supplement or the 'integrazione al minimo', and is disregarded from the Australian income test in certain situations under the agreement with Italy.
Certain other amounts are also excluded from the income test, including the 'Importo Differenziale ex L335/95'. Although these amounts are excluded from the income test, they are included as part of the direct deduction amount if the person is receiving Australian pension by virtue of the agreement with Italy, and the person is in Australia.
Act reference: SS(IntAgree)Act Schedule 2 Italy
Policy reference: SS Guide 10.4.8 Rate Calculation - Agreement with Italy
UK Child Benefit
Act reference: SSAct section 8(8)(j) a payment made to a person for or in respect of a dependent child of the person
The following payments from the UK Government are NOT treated as income for Australian social security purposes:
- attendance allowance, and
- disability living allowance.
UK housing benefit IS assessed as income for social security purposes. This applies in situations where the recipient receives the payment directly or when it is directed to the housing provider, even if paid as a direct subsidy over which the recipient has no control, such as to a council provider. When it is directed to the provider, it is considered to be 'valuable consideration' and treated as income.
Explanation: UK housing benefit can be paid in cash, paid to a private landlord at the recipient's direction or paid as a subsidy for council housing. All types of payment are income.
Act reference: SSAct section 8(1)-'income amount', section 35A Personal Care Support, section 8(8) Excluded amounts - general, see (ze)
Policy reference: SS Guide 1.1.V.25 Valuable consideration, 126.96.36.199 Income exempt from assessment - specifically approved, 188.8.131.52 Deferred income, salary sacrifice, valuable consideration & fringe benefits
UK Bereavement Support Payment
Eligibility for the UK Bereavement Support Payment is based on the applicant's deceased spouse having contributed a sufficient amount to the UK's National Insurance Contribution. The Bereavement Support Payment includes a lump sum and a time limited monthly payment. The lump sum component is assessed as a non-remunerative lump sum and apportioned over 52 weeks.
Act reference: SSAct section 1073 Certain amounts taken to be received over 12 months
Policy reference: SS Guide 184.108.40.206 Determining the rate of income for benefits, 220.127.116.11 Determining the rate of income for pensioners of age pension age from 20/09/2009, 18.104.22.168 Determining the rate of income for PP
UK Council Tax Reduction
UK Council Tax Reduction (sometimes called UK Council Tax Support) is NOT considered income for Australian social security purposes. This is because UK Council Tax Reduction effectively operates to reduce a person's Council Tax liability rather than being paid as an income amount. The value of the Council Tax Reduction cannot be paid out in the form of cash. The Council Tax Reduction is analogous to pensioner discounts that people can receive in Australia off their rates.