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.

5.5.1.40 Pensioner couple, 3 children

Method used prior to 20 September 2009

This example shows the basic rate calculation using Pension Rate Calculator A. The pensioner couple has a combined rate of ordinary income (1.1.O.30) of $8,000.00 a year. For pension assessment purposes, income is split equally between each member of a couple.

The following table shows the steps involved in the basic rate calculation. The rates used applied at 20 September 2000. Current rates can be found in the A guide to Australian Government payments booklet on the Services Australia website.

Step Action Partner 1 $ Partner 2 $
1

Determine the maximum payment rate:

  • Locate the MBR in Module B*
  • Add any PhA

RESULT: MAXIMUM BASIC RATE

8,551.40

72.80

8,624.20

8,551.40

72.80

8,624.20
2

Determine the income reduction using Module E:

  • Annual ordinary income
  • Less child free area
  • Less ordinary income free area limit

RESULT: ORDINARY INCOME EXCESS

4,000.00

959.40

2,444.00

596.60

4,000.00

959.40

2,444.00

596.60
3

Determine 40% of the ordinary income excess (refer to Explanation below)

RESULT: TOTAL INCOME DEDUCTION

238.64

238.64
4

Subtract the total income deduction from the maximum payment rate:

  • Maximum payment rate
  • Less total income deduction

RESULT: INCOME REDUCED RATE

8,624.20

238.64

8,385.56

8,624.20

238.64

8,385.56
5

Divide the income reduced rate by 26

RESULT: FORTNIGHTLY PAYMENT RATE PER PERSON

322.52

322.52

*The figures in Module B are modified by the factors in Module BA - Amount of Pension Supplement.

Explanation of Step 3: The pension income test prior to 20 September 2009 allowed for a 40 cents reduction for each dollar over the income free area, i.e. a 40% reduction rate. For a pensioner couple, each dollar of income is split equally between both members of the couple (as in step 2). This means that each dollar is split into 50 cents for each member of the couple, and the actual reduction for each member is 50 cents × 40% = 20 cents.

The total reduction for the couple is then 20 cents + 20 cents = 40 cents in total.

Act reference: SSAct section 9(1)-'pensioner couple', section 1064(1) Rate of age and disability support pensions and CP (people who are not blind),

SS(Admin)Act section 54 Rounding off instalments of social security payments

Last reviewed: