Prime Time Financial Counsellors Pty Ltd: Newstart Allowance

Newstart Allowance

Reproduced from Centrelink's "A Guide to Australian Government Payments 1 July - 19 September 2010"

Basic Conditions of Eligibility
Residence Requirements
Basic Rates
Rent Assistance
Assets Test
Income Test
Deeming - Financial Investments

Basic Conditions of Eligibility

Must be unemployed, or regarded as unemployed (this can include some people who work).
Aged 21 or over but under Age Pension age.
Willing to undertake suitable paid employment..
Unless exempted, must participate in or be willing to participate in approved activities and/or JobSearch.
Prepared to enter into, comply or vary an existing Activity Agreement to fulfil the activity test.

Residence Requirements

Must be an Australian resident.
Available to newly arrived migrants after 104 weeks in Australia as an Australian resident (some exemptions may apply).
If not required to look for work you may be paid for up to 13 weeks of temporary overseas absence in certain limited circumstances.

Basic Rates

Single, no children	$462.80 pf
Single, with dependent children	$500.70 pf
Single, aged 60 or over, after nine months on Mature Age Allowance (includes Pharmacetical Allowance)	$500.70 pf
Partnered (each)	$417.70 pf
Single, principal carer of a dependent child (granted an exemption to foster caring/home schooling/distance education/large families	$601.30 pf

Advance of allowance of up to $500 may be available.
Pharmaceutical Allowance may be paid.
Education Entry Payment of $208 may be payable. Until 30 June 2010, a temporary supplement of $950 will be paid to eligible customers when Education Entry Payment is made.
Job Seekers undertaking Work for the Dole (including Full-time Work for the Dole and Drought Force), Green Corps activities and the Language, Literacy and Numeracy Program may be eligible for an additional supplement of $20.80 per fortnight.
Training Supplement of $41.60 per fortnight may be payable for the duration of an approved course of study or training commencing prior to 30 June 2011.
If a couple is separated because of illness, they may each be paid $500.70 pf.
One member of a couple may be paid $500.70 pf if the partner not receiving payment is imprisoned.
Single principal carers of a dependent child under 16 and people assessed as having a partial capacity to work may be eligible for a Pensioner Concession Card.

Rent Assistance

Family Situation Maximum payment per fortnight No payment if your fortnightly rent is less than Maximum payment if your fortnightly rent is more than

Single, no children $113.40 $100.80 $252.00

Single, no children, sharer $75.60 $100.80 $201.60

Couple, no children $107.00 $164.40 $307.07

One of a couple who are separated due to illness, no children* $113.40 $100.80 $252.00

One of a couple who are temporarily separated, no children $107.00 $100.80 $243.47

* Includes respite care and partner in prison.

Rent Assistance for families with children is usually paid with Family Tax Benefit. See Family Tax Benefit Part A for current rates.
Rent Assistance is not paid:
- to people paying rent to a government housing authority, although in some situations sub-tenants may qualify for Rent Assistance.
- for residents of Australian Government funded nursing homes and hostels.
- to single Disability Support Pensioners under 21, without dependants, living with parents.
- to other single people aged under 25, living with parents.
Special rules apply to single sharers, people who pay board and lodging or live in a retirement village.
Rent Certificates are required to verify rent where the person does not have a formal tenancy agreement or is not named as a tenant on a formal tenancy agreement.
Rent Assistance is paid as part of another payment. It may be reduced due to the income test rules applying to that primary payment.
Rent Assistance is subject to portability provisions where relevant.

Rent Assistance is not available to single people aged under 25, without dependants, who live with their parent or guardian.
Where both members of a couple without children are receiving an allowance or benefit, Rent Assistance is shared.

Income Test

Family Situation For full
Allowance (pf)* For part
Allowance (pf)**

Single no children up to $62 less than $864.67

Single aged over 60 after nine continuous months on payment up to $62 less than $927.84

Single, with dependent child(ren) up to $62 less than $927.84

Partnered (each) up to $62 less than $789.50

Single, principal carer of a dependent child (granted an exemption for foster caring/home schooling/distance education/large family) up to $62 less than $1,095.50

*
Fortnightly income between $62 and $250 reduces fortnightly allowance by 50 cents in the dollar.

For income above $250 per fortnight, fortnightly allowance reduces by 60 cents in the dollar.

Partner income which exceeds the cut-off point reduces fortnightly allowance by 60 cents in the dollar.

** These figures may be higher if you are eligible for Pharmaceutical Allowance or Rent Assistance.

Working Credit

Working Credit helps working-age people to keep more of their income support payment when they take up work. When people have little or no income, they will build up "working credits". Then if they do work, their working credits increase the amount they can earn before their income support payment is reduced. For example, someone with 150 working credits is able to earn an extra $150 above the income free area before their payment starts to reduce.

It also helps people who take up short-term jobs by making it easier for them to get their payments restarted (for up to 12 weeks). This means that people don't have to reapply for payments, they just need to prove that their job has ended, or that their income has dropped, and Centrelink will restart their payments.

A personal income test is applied.

Assets Test

Assets Test for Homeowners

Family Situation	For Full Pension / Allowance*	For Part Pension # †
Single**	Up to $181,750	Less than $649,250
Partnered (combined)	Up to $258,000	Less than $963,000
Illness separated couple (combined)	Up to $258,000	Less than $1,193,000
One partner eligible	Up to $258,000	Less than $963,000

Transitional Homeowner

Family Situation	For Full Pension / Allowance*	For Part Pension # †
Single	Up to $181,750	Less than $604,750
Partnered (combined)	Up to $258,000	Less than $941,500
Illness separated couple (combined)	Up to $258,000	Less than $1,104,000
One partner eligible	Up to $258,000	Less than $941,500

Assets Test for Disability Support Pensioners Under 21 - Homeowners

Family Situation	For Full Pension / Allowance*	For Part Pension # †
*Aged Under 21 Single - not independent*
16 - 17 years	Up to $181,750	Less than $394,500
Partnered (combined)	Up to $181,750	Less than $422,500
*Aged Under 21 Single - independent*
	Up to $181,750	Less than $508,250
*Aged Under 21 - Couple (combined)*
One partner eligible	Up to $258,000	Less than $907,000

Assets Test for Non-Homeowners

Family Situation	For Full Pension / Allowance*	For Part Pension # †
Single**	Up to $313,250	Less than $755,000
Partnered (combined)	Up to $389,500	Less than $1,094,500
Illness separated couple (combined)	Up to $389,500	Less than $1,324,500
One partner eligible	Up to $389,500	Less than $1,094,500

Transitional Non-Homeowner

Family Situation	For Full Pension / Allowance*	For Part Pension # †
Single	Up to $313,250	Less than $726,250
Partnered (combined)	Up to $389,500	Less than $1,073,000
Illness separated couple (combined)	Up to $389,500	Less than $1,235,500
One partner eligible	Up to $389,500	Less than $1,073,000

Assets Test for Disability Support Pensioners Under 21 - Non-Homeowners

Family Situation	For Full Pension / Allowance*	For Part Pension # †
*Aged Under 21 Single - not independent*
16 - 17 years	Up to $313,250	Less than $526,000
Partnered (combined)	Up to $313,250	Less than $554,000
*Aged Under 21 Single - independent*
Illness separated couple (combined)	Up to $313,250	Less than $639,750
*Aged Under 21 - Couple (combined)*
One partner eligible	Up to $389,500	Less than $1,038,500

Some assets are deemed to earn income, while certain assets are not included in the assets test; see Deeming - Financial Investments or contact Centrelink for more information.

Note: The rate of payment is calculated under both the income and assets tests. The test that results in the lower rate (or nil rate) will apply.

#	Limits will increase if Rent Assistance is paid with your pension.
*	Assets over these amounts reduce pension by $1.50 per fortnight for every $1,000 above the limit (single and couple combined). Newstart Allowance, Widow Allowance, Partner Allowance, Sickness Allowance, Special Benefit, Parenting Payment, Youth Allowance and Austudy Payment and Mature Age Allowance are not payable if assets exceed these amounts.
**	For Disability Support Pension recipients, these limits apply if aged over 21 only. For those under 21 the same income/assets test applies, but with different limits. See your nearest Centrelink Customer Service centre for more information.
Asset and Income limits for Transitional Rate and saved case customers apply to customers who are resident in Australia, or are not absent for more than 13 weeks only. For other cases, contact Centrelink for more information.

Extra Allowable amount for Retirement Village and Granny Flat Residents
If your Entry Contribution is equal to or less than the Extra Allowable Amount, you are assessed as a non-homeowner. Your Entry Contribution will count as an asset. You may qualify for Rent Assistance. The Extra Allowable Amount is the difference between the non-homeowner and homeowner test limits, currently $131,500.

Hardship Provisions
If you have assets but little or no income you are expected to rearrange your affairs to provide for yourself. In some cases that is not possible. If you are in "severe financial hardship" you may be able to get a social security payment. Different tests apply to such cases.

Payment may be deferred when liquid assets exceed $5,500 (single) or $11,000 (couple or single with dependants).
Hardship provisions may apply.

Deeming - Financial Investments

(a) Income Test for Pensions

Family Situation	Full Pension (pf)*	For Part Pension (pf) # †
Single**	Up to $146.00	Less than $1,548.20
Couple (combined)	Up to $256.00	Less than $2,370.00
Illness separated couple (combined)	Up to $256.00	Less than $3,060.40

(b) Income Test for Pensioners - Transitional Rules

The notional maximum pension for transitional rate pensioners is $624.90 per fortnight for a single pensioner and $1,009.40 per fortnight for pensioner couples. This rate excludes rent assistance.

Income test for transitional rate pensioners:

Family Situation	Full Pension (pf)ˆ	For Part Pension (pf) # †
Single**	Up to $146.00	Less than $1,731.75*
Couple (combined)	Up to $256.00	Less than $2,817.50*
Illness separated couple (combined)	Up to $256.00	Less than $3,427.50*

Note: The rate of payment is calculated under both the income and assets tests. The test that results in the lower rate (or nil rate) will apply.
ˆ	Allowable income is increased by up to $24.60 pf for each dependant child.
*	Income over these amounts reduces the rate of pension payable by 50 cents in the dollar (single), 25 cents in the dollar each (for couples). For transitional or saved cases income over these amounts reduces the rate of pension payable by 40 cents in the dollar (single), 20 cents in the dollar each (for couples).
#	These figures may be higher if Rent Assistance is paid with your pension.

Some assets are deemed to earn income, while there are special rules for other types of income. Contact Centrelink for more information.

Employment income is subject to a Work Bonus for eligible pensioners over pension age.

Pensioners receiving payments at 19 September 2009 may be paid under 'transitional arrangements'.

Work Bonus

Basic conditions of eligibility:

The Work Bonus is a concession on the income test treatment of employment income for pensioners over age pension age, except Parenting Payment (Single).
The Work Bonus is used to reduce assessable employment income in an instalment period. An instalment period is a period of a maximum of 14 days.
Half of the first $500 of fortnightly employment income will be disregarded from the income test for pensioners over age pension age. This is in addition to the normal allowable income threshold.
All pensioners over age pension age, other than recipients of Parenting Payment (Single), are eligible for the Work Bonus. If they are eligible for a transitional rate, Centrelink will compare the transitional rate (which has no Work Bonus) to the new rate (which does include the Work Bonus). The transitional rate is paid where it pays a higher rate.
No registration process, however pensioners must keep Centrelink up to date with their employment income.

Compensation Payment

Compensation payments, such as weekly workers' compensation payments, are assessed differently. If the compensable injury occurred prior to receiving an income support payment each dollar of any regular compensation payment reduces the income support payment (pension or allowance) by a dollar. If the compensable injury occurred while receiving an income support payment any regular compensation payment is assessed under the normal income test. Compensation payments may include a component of taxable income and it is this component that is included as income for Family Tax Benefit purposes. Lump sum compensation payments may result in a non-payment period. Contact Centrelink for more information.

Means Testing of Income Streams

Classification Income Test Deductible Amount Assets Test

Complying
eg. Life or Life expectancy/fixed term pensions or annuities. Gross Income less Deductible amount Purchase Price Relevant Number (term) Exempt

Non-complying (>5 yrs) e.g. allocated pensions, allocated annuities or term certain annuities. Gross Income less Deductible amount Purchase Price Relevant Number (term) Account balance or if none: PP less [(PP - RCV) / RN x term elapsed]

Non-complying (5 yrs or less) e.g. term certain annuities. Deem Income Not Applicable Account balance or
if none:
PP less [(PP - RCV) / RN x term elapsed]