Calculating the rate of income support payments

Calculating the rate of pension 

Single pensioner

To calculate the rate of pension for your clients, you will need to apply the assets and income means tests. The pension rate that applies will be the lower of these two tests. You will need to use the rate of pension that includes the pension and energy supplements, which as at 20 September 2024, is $1,144.40 per fortnight for singles and $862.60 for each member of a couple.

You will also need to:

• Establish total assessable assets. As at 20 September the first $314,000 of assets for single homeowners or $566,000 for single non-homeowner does not reduce the pension. Every $1,000 of assets above these thresholds will reduce the pension by $3 per fortnight.
• Establish assessable income. As at 20 September for singles the first $212 per fortnight of assessable income will not reduce the pension. Every $1 above the threshold will reduce the pension by 50 cents per $1.

Example

Fernando is a single homeowner with $400,000 of assessable assets and $36,400 per annum of assessable income.

Fernando will receive a pension of $550.40 per fortnight based on the income test.

Pensioner couple

For a pensioner couple, you will need to establish the total combined assessable assets and combined assessable income. The rate of pension that includes the pension and energy supplements, which as at 20 September 2024, is $862.60 per fortnight (per eligible member of the couple) will be the basis for the calculation.

As at 20 September 2024 the first $470,000 of assets for homeowners, or $722,000 for non-homeowners will not reduce the pension. Every $1,000 of assets above these thresholds will reduce the pension by $3 per fortnight.

As at 20 September 2024 the first $372 per fortnight of assessable income will not reduce the pension. Every $1 above the threshold will reduce the pension by 50 cents per $1.

Example

Age pensioners Arthur and Martha are homeowners with assessable assets of $700,000 and assessable income of $36,400 per annum.

Arthur and Martha will receive a pension of $1,035.20 combined per fortnight or $517.60 each, based on the asset test.

Pensioner and non-recipient couple

For pensioner and non-pensioner couples, the easiest way to make the calculation is to assume they’re both eligible.

Example

Janet is 67 and Fred is 56, retired and not seeking paid work. They are homeowners with assessable assets of $700,000 and assessable income of $36,400 per annum.

Janet would receive $517.60 (half the combined rate if both of them were eligible). Fred is not eligible for Age Pension as he is below age pension age and is not eligible for JobSeeker as he is not seeking paid work.

Example

Igor is of age pension age and his partner Svetlana is 50 and meets the eligibility criteria for the JobSeeker Payment. They are homeowners with assessable assets of $700,000 and assessable income of $36,400 or $1,400 per fortnight.

Igor would receive $517.60 per fortnight based on the previous calculations in Janet and Fred’s example. Svetlana would not receive any JobSeeker Payment as the asset test precludes her outright.

Svetlana now decides to contribute $360,000 to super (not assessable) and they spend $90,000 to renovate their home. Their assessable assets now become $250,000 and their assessable income is $22,900 per annum or $880.77 per fortnight. As their assets are now under the assets threshold, the income test will be the dominant test for both Igor’s Age Pension and Svetlana’s JobSeeker Payment.

The maximum rate of pension for a member of a couple is currently $862.60 per fortnight (50% of $1,725.20). Igor's rate is $735.41 as calculated below:

The maximum rate of Job Seeker Payment for a member of a couple is currently $720.20 per fortnight. Svetlana's rate of JobSeeker Payment is $556.57 as calculated below:

Next: Your guide to means testing