Appendix A: Transfer payments and concession cards
Income Support Payments
This section outlines the broad eligibility criteria for the income support payments in the Australian transfer system. Most such payments apply a 104 week waiting period or residence requirement to newly arrived residents, with exemptions for certain specified new entrants.
Payment rates and means testing provisions as at 1 July 2008 are outlined at Appendix C.
Age Pension is available to men and women at Age Pension age, which is 65 years for men and 63½ years for women (increasing to 65 by July 2013). Generally, a claimant is required to be an Australian resident and in Australia at the time of claim, unless they are claiming under an International Social Security Agreement. To receive Age Pension a person must have prior residence of 10 years or more, with at least five years in a continuous block (they can include, under certain International Agreements, periods of residence in the agreement country). Under certain limited circumstances people may be exempt from the 10-year residence requirement.
Disability Support Pension is for people aged 16 and over (new entrants must be under Age Pension age), with a physical, intellectual or psychiatric impairment (assessed as 20 points or more under the Impairment Tables) that prevents them from working, or being re-skilled to work, for 15 hours a week at or above the minimum wages for at least the next two years. Recipients of the payment at 10 May 2005 are required to be unable to work 30 hours a week. Similar prior residence requirements as Age Pension apply unless the person became unable to work while in Australia.
Special provisions allow recipients who commence work or increase their earnings on a long term basis to have their eligibility 'suspended' for up to two years, rather than cancelled, allowing them to return to payment if they cease work or reduce their hours of work. Disability Support Pension is non-taxable for recipients under Age Pension age.
Carer Payment is a pension for a person providing constant care for a person with disability or severe medical condition, or who is frail aged; a child with profound disability; two or more children with disability; or an adult and that adult's dependent child who needs care permanently or for an extended period. The person being cared for must receive an income support or service pension, or not have qualifying residence for a pension, or meet the Special Care Receiver income and assets limits. They are not required to live with or adjacent to the person being cared for. A Carer Payment recipient can participate in employment, education, training or unpaid voluntary work for up to 25 hours a week without it affecting their eligibility.
Bereavement Allowance is a pension paid for up to 14 weeks to a recently widowed person, without a qualifying child for Parenting Payment Single, following the death of their partner (the period can be extended if the widow is pregnant).
Newstart Allowance is for people between 21 and Age Pension age who are regarded as unemployed, and who satisfy the requirements of an activity test (or are exempted from activity testing, for example, due to a temporary incapacity for work). Activity requirements are tailored to the individual's capacity to work. For example, reduced requirements apply to people with disability with a partial capacity to work and principal carers of older children (aged 6 to 15 if partnered and 8 to 15 if single). The most common activity requirement is to seek and accept suitable work. Other agreed activities are designed to improve employment prospects.
Sickness Allowance is for people who are temporarily incapacitated for work or study as a result of illness, and who have a job or course of study to return to (if aged 25 plus).
Parenting Payment is for principal carers of dependent children. Claimants must have a qualifying child aged under six if the carer is partnered or under eight if the carer is single. A person must enter into an activity agreement with part-time requirements if the youngest child is aged six or more. Those who were on Parenting Payment at 30 June 2006, must have a qualifying child aged under 16 and must enter into an activity agreement with part-time requirements if the youngest child is aged seven or more.
Parenting Payment for a single parent is a pension. Parenting Payment for a partnered person is an allowance. To receive Parenting Payment a claimant must have two years prior Australian residence. This period is waived for people whose partner dies while they are in Australia.
Widow Allowance is for older women (born on or before 1 July 1955) widowed, divorced or separated prior to turning 40 and with no recent workforce experience at the time of initial claim. No recent workforce experience is defined as having not worked at least 20 hours a week for 13 weeks or more in the 12 months before claim. Payment rates and means testing as for Newstart Allowance (for a single person).
Youth Allowance is an income support payment for young people aged 16-20 and full-time students aged 21-24. Youth Allowance (student) is for full-time students in secondary or tertiary education or training and full-time Australian Apprentices aged 16 to 24 years. The student must be undertaking an approved course of study. Youth Allowance (other) is for young people aged 16 to 20 who are not in full-time study, seeking or preparing for work or temporarily unable to work. Youth Allowance for non-independent under 18 year olds is paid to a parent, unless the parent directs in writing otherwise.
Rates for people with children are similar to equivalent Newstart Allowance rates. A lower rate is paid to partnered young people without children or living away from home. Rates are lower again, and age related, if the young person is living at home. Youth Allowance for non-independent young people is subject to parental means testing arrangements: a parental income and family assets test applies unless a parent receives an income support payment or holds a low income Health Care Card; a family actual means test applies to families with specified financial arrangements. The payment includes young people assessed as only having a partial capacity for work—this group is not subject to parental means testing.
Austudy Payment is for people over 25 who are full-time students in study or training or full-time Australian Apprentices. The student must be undertaking an approved course of study. Payment rates and income testing are the same as Youth Allowance for an independent young person, except that they are not paid the lower 'at home' rate.
ABSTUDY is for full-time secondary and tertiary students and apprentices who are Aboriginal or Torres Strait Islander. Payment rates are generally equivalent to Youth Allowance (Student) and Newstart Allowance for over 21-year-olds. ABSTUDY has a range of supplementary benefits in addition to living allowance payments.
Special Benefit is for those who are in financial hardship but who are not eligible for any other type of payment. The rate of Special Benefit is discretionary but cannot exceed that otherwise payable to Newstart Allowance or Youth Allowance recipients. The payment is activity tested in some cases, and is paid subject to strict liquid assets test limits and any income is subject to a dollar for dollar income test. Special Benefit may be paid to newly arrived residents within the 104-week waiting period.
Payments closed to new entrants: Some recipients receive payments that are closed to new entrants. Recipients are not subject to participation requirements. These payments include:
- Mature Age Allowance is for people aged 60 years to Age Pension age receiving an income support payment for nine months or more with no recent workforce experience (closed to new entrants 20 September 2003, phased out by 20 September 2008).
- Partner Allowance is for partners of income support recipients born on or before 1 July 1955 with no recent workforce experience at the time of claim (closed to new entrants from 20 September 2003).
- Widow B Pension is paid to widowed, divorced or separated women aged 50 years and over on 1 July 1987, and women aged 45 years and over on 1 July 1987 who received Sole Parent Pension (or one of its forerunners) on or after that date and made a claim before 20 March 1997 (closed to new entrants from 20 March 1997).
- Wife Pension (Age) is a payment for female partners of recipients of Age Pension where those partners are not eligible in their own right for another pension (closed to new entrants from 1 July 1995).
- Wife Pension (Disability Support Pension) provides income support for female partners of people receiving Disability Support Pension who are not eligible for a pension in their own right (closed to new entrants from 1 July 1995).
Payments to veterans and their dependents
A service pension is paid to veterans on the grounds of age or invalidity, and to eligible partners, widows and widowers. The age service pension is paid to veterans who have qualifying service and the partner service pension is paid to eligible partners and widows. These service pensions are paid five years earlier than the Age Pension in recognition of the intangible effects of war. The invalidity service pension may be granted at any age up to age 65. The rate of service pension is indexed in the same way as Age Pension.
Disability pension is available to compensate veterans for injuries or diseases caused or aggravated by war service or certain defence service rendered on behalf of Australia before 1 July 2004. It is a non-taxable pension.
The War Widow's/Widower's and Orphan's Pension is paid to compensate widowed partners and dependants of veterans who have died as a result of war service or eligible defence service. War widow's/Widower's Pension is not affected by other income except from other compensation payments.
The Income Support Supplement (ISS) is a payment made in addition to a War Widows/ers' Pension to assist recipients who may not have any other source of significant income. It was announced in the 1994-95 Budget and introduced in March 1995 to rationalise and simplify income support arrangements paid in addition to a War Widows/ers' Pension. Instead of a recipient having to approach Centrelink and qualify for one of three or four different income support payments such as Age Pension or Disability Support Pension under the Social Security Act 1991, the person can claim the Income Support Supplement with the Department of Veterans' Affairs. To qualify for the Income Support Supplement, the person must be an Australian war or defence widow/er, and not be in receipt of another income support pension. From 1 July 2008, there is no longer an age requirement for the Income Support Supplement. War widow/ers who are under pension age (currently 63.5 for females, 65 for males) may access the Income Support Supplement as a tax-free payment if they are incapacitated. The Income Support Supplement, like the other income support payments, is income and asset tested but is capped at a lower ceiling rate, recognising that War Widows/ers' Pension is also paid and is counted as income.
In analysis the Service Pension and Income Support Supplement are treated as income support as they are both means tested payments.
Family Assistance Payments
This section outlines the broad eligibility criteria for family assistance payments in the Australian transfer system. Payment rates and income testing provisions as at 1 July 2008 are outlined at Appendix C.
Family Tax Benefit (FTB) Part A is a per child payment to assist families with the direct costs of raising children. It is available to parents who provide care of dependent children for 35 per cent or more of the time. FTB Part A also includes assistance for families with private rental costs for families with children aged under 16 (Rent Assistance), three or more children (Large Family Supplement), and multiple births with three or more surviving children of the one confinement (Multiple Birth Allowance). FTB Part A has two rates—a 'maximum' rate and a 'base' rate paid—both subject to income but not assets tests. Children aged 13 to 15 have a higher maximum rate than younger children because teenagers cost more. Lower rates of payment are available for children from 16 to 24, as Youth Allowance becomes available to children in low income families once a child turns 16. However, increases in the generosity of FTB rates and means testing arrangements for children aged under 16 relative to those applying to Youth Allowance now result in almost all families experiencing a reduction in government assistance when a child turns 16. The FTB Part A family income test does not apply if parent receives an income support payment. The maintenance income test applies to FTB Part A above the base rate (including Rent Assistance).
Family Tax Benefit (FTB) Part B is a per family payment, paid to single parents and couples with one main income earner with a dependent child aged under 16 or a qualifying full-time student aged 16 to 18. FTB Part B for couple families is paid subject to an income test on the second earner and only available to couple or single parent families with a primary earner with income of $150,000 per year or less. FTB Part B has a higher rate for families with a child aged under 5.
FTB is a paid as a fortnightly payment to most families based on an estimate of total family adjusted taxable income. Families can elect to wait until their adjusted taxable income is known and claim the payment as a lump sum. FTB supplements are available at the end of the tax year and can be used to offset any debt arising from an incorrect estimate of income. Where the care of a child is shared between two or more adults (each with more than 35 per cent of the care) who are not members of the same couple, FTB can be 'shared'. FTB is not subject to assets testing.
Baby Bonus is a lump sum payment of $5,000 paid on the birth or adoption of a child. From 1 January 2009 Baby Bonus will be paid as 13 fortnightly instalments and only available if family income in the six months following the birth or adoption of a child is $75,000 or less.
Double Orphan Pension is provided to a guardian or approved care organisation with the care and control of a child where both parents have died or one parent has died and the other parent is unable or unavailable to care for specific reasons.
Maternity Immunisation Allowance is a one-off lump sum payment for children who are aged 18 to 24 months and fully immunised (unless exempted). From 1 January 2009 it will generally be made in two payments: for children who have received the immunisations required for an 18 month old and a four year old. Family assistance payments are non-taxable.
Child Care Benefit (CCB) is available for families using child care provided by an approved child care service or registered carers. Approved services can include Long Day Care, Family Day Care, Outside School Hours Care, Vacation Care and some Occasional and In-Home Care. Registered care includes nannies, relatives or friends registered as carers. Families who are eligible for CCB for approved care can get up to 24 hours of CCB per child per week regardless of their work status. Families where both parents or a single parent are working, studying, training or looking for work for at least 15 hours a week (unless exempted) are eligible for up to 50 hours of CCB per child per week for approved care. CCB for registered care is paid only where both parents or a single parent are working, studying, training or looking for work at any time in the week. There is a weekly limit of 50 hours of CCB for registered care.
CCB for approved care is subject to a family income test. The maximum rate is payable if a parent is on income support, or if their family income is below the relevant income threshold. Most families using approved care choose to receive their CCB as a reduction in fees. The other option is as a lump sum after the end of the year. There is no income test for CCB for registered care.
Child Care Tax Rebate meets 50 per cent of the out-of-pocket child care expenses for approved care up to a limit of $7,500 per child per annum and can be paid quarterly or annually. To receive payment, the claimant must have been assessed as eligible for CCB and both parents or a single parent must be working, studying, training or looking for work.
Other Supplementary Payments
This section outlines the broad eligibility criteria for supplementary payments in the Australian transfer system as at 1 July 2008. Further detail is provided at Appendix D.
Rent Assistance (RA) is an increase in the rate of income support or FTB Part A for people available to eligible income support and FTB recipients paying private rent above minimum thresholds. It is paid at a rate of 75 cents for every dollar above the threshold until a maximum rate is reached. The maximum rates and thresholds vary according to a customer's family situation and the number of children. For singles without children, the maximum rate may also vary according to whether or not accommodation is shared with others. For families with children aged under 16 it is paid as part of the FTB Part A and subject to the family payment income test (unless receiving income support) and the maintenance income test. RA is withdrawn at the same rate as the primary payment, for example, 20 per cent for families receiving RA with FTB Part A, 60 per cent for allowance recipients and 40 per cent for pensioners (20 per cent for each partner). RA is non-taxable.
Remote Area Allowance (RAA) provides assistance to income support customers residing in defined remote areas, recognizing that many do not get the full benefit of tax zone offsets. RAA is a contribution towards some of the costs associated with living in particularly remote areas. It is paid in addition to the income support rate and is not reduced by the income or assets test.
Telephone Allowance (TAL) is a quarterly payment to assist with the cost of maintaining a telephone service. It is paid to pensioners, certain allowees and Commonwealth Seniors Health Card holders who are telephone subscribers. A higher rate of Telephone Allowance is payable for income support recipients of Age Pension age, Commonwealth Seniors Health Card holders, and Disability Support Pension and Carer Payment if a person or their partner have a home internet connection.
Utilities Allowance (UA) is a payment to assist with regular household bills. It is paid to people of age (or veteran) pension age in receipt of income support, and to recipients of Mature Age, Widow and Partner Allowances, Disability Support Pension, Carer Payment, Bereavement Allowance, Widow B Pension, Wife Pension, Invalidity Service Pension and Income Supplement. UA is paid quarterly. Eligibility test days are 20 March, 20 June, 20 September and 20 December.
Seniors Concession Allowance (SCA) is a similar payment to UA. It is paid to Commonwealth Seniors Health Card holders and DVA Gold Card holders of service pension age who do not already receive UA.
Pensioner Education Supplement (PES) is paid to students in approved study on: Parenting Payment Single, Disability Support Pension, Carer Payment, Special Benefit (in some circumstances), Widow Allowance, Widow B Pension and Wife Pension (in some circumstances), Newstart Allowance, Youth Allowance and certain other allowees transferred from Disability Support Pension or Parenting Payment Single who previously receiving PES.
Education Entry Payment (EdEP) is a lump-sum payment to assist with the cost of beginning approved study. It is available to PES recipients (available annually), and to recipients of Parenting Payment Partnered, Mature Age, Newstart Allowance, Partner and Widow Allowances if they have been on income support for at least 12 months.
Work for the Dole Supplement is a fortnightly supplement to help Newstart Allowance recipients and Youth Allowance recipients with the cost of participating in Work for the Dole programs.
Language, Literacy and Numeracy Supplement is a fortnightly supplement to help people on eligible income support payments with the costs associated with participating in the Language, Literacy and Numeracy program.
Pension Bonus Scheme pays a one-off lump sum to people who defer receipt of Age Pension and continue to work.
Pension Bonus Bereavement Payment is one-off lump sum to the surviving partner of a deceased Pension Bonus Scheme member who did not make their claim for a Pension Bonus before their death.
Crisis Payment is a one-off payment to help people who are in severe financial hardship. It is available to social security income support recipients forced to leave their own home due to extreme circumstances, such as a natural disaster, or who are victims of domestic violence, newly released prisoners or newly arrived humanitarian entrants.
Mobility Allowance is a non–means tested income supplement for people with disability aged 16 or over and unable to use public transport without substantial assistance. There are two rates of Mobility Allowance. A higher rate is paid to recipients of Disability Support Pension, Newstart Allowance and Youth Allowance (Other) working at least 15 hours a week or looking for such work, the lower rate is paid to other recipients.
Carer Allowance is for people who provide daily care and attention at home to a person with disability or medical condition who is: aged 16 or over with substantial functional impairment; or a dependent child under age 16 who needs substantially more care than child without disability. Child Disability Assistance Payment is available to recipients of CA (child) at 1 July each year.
Carer Bonus payments were made in June 2008 following the 2008-09 Budget (and in each of the preceding four Budgets). Carer Bonus payments included a one-off lump sum of $600 to Carer Allowance recipients and a one-off lump sum of $1,000 to recipients of: Carer Payment; DVA Carer Service Pension; or Wife Pension and Carer Allowance; or DVA Partner Service Pension and Carer Allowance.
Seniors Bonus payments were made in June 2008 following the 2008-09 Budget as a one-off lump sum payment of $500 to income support recipients of age (or service) pension age; recipients of Mature Age, Partner and Widow Allowances; people qualified for Seniors Concession Allowance, Wife Pension and Widow B Pension (regardless of age). Recipients eligible for both the Seniors and Carers Bonuses received both.
Concession Cards
Pensioners and specified allowance recipients (aged 60 and over and on income support for nine months or more, 'principal carers' and those assessed as having a 'partial capacity to work') are issued a Pensioner Concession Card. Other allowance recipients (excluding student payment recipients) and eligible FTB families are issued a Health Care Card. A low-income Health Care Card can be claimed, subject to an income test, by other low income families and individuals. Self-funded retirees of Age Pension age can claim a Commonwealth Seniors Health Card, subject to an income test. Concession Cards also remain available to certain income support recipients for a period if they leave payment due to employment income.
While all cardholders have access to low-cost pharmaceuticals and a concessional Medicare Safety Net threshold, holders of the Pensioner Concession Card may receive additional concessions provided by state, territory and local governments. Discounts can apply to: fares on public transport, rates (council and water), utilities (electricity), and motor vehicle registration charges. The level of these concessions and others available to cardholders vary between state, territory and local government. Further details on concession cards see Appendix H.