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Allowances and payments

Austudy

Eligibility (ss 7, 568)

To be eligible for Austudy, a person must satisfy an activity test, be at least 25 (unless receiving Youth Allowance immediately before turning 25), and be an Australian resident. Waiting periods may apply, including a preclusion period for seasonal workers.

The activity test is satisfied if the person is undertaking qualifying study (this may require a full-time or concessional study load in an approved course) or a full-time Australian Apprenticeship. The person must also satisfy progress rules. A person cannot satisfy the activity test if they are a new apprentice or have completed doctoral study.

A person commits an Austudy participation failure by failing without reasonable excuse to comply with certain Centrelink requirements, or to satisfy the activity test. If the person commits a failure in the same payment period as a previous failure, the failure is not considered a participation failure if it is the person’s first payment period. If the failure is committed during a subsequent period, it is not considered a participation failure if another failure was not committed in the immediately preceding payment period, or the person had acted in accordance with a Centrelink requirement in respect of the failure.

Following an Austudy participation failure, Austudy is not payable until the person undertakes an activity required by, or complies with a direction of, Centrelink in respect of the failure. An eight-week non-payment period applies following repeated participation failures, although Centrelink has discretion not to apply the non-payment period.

Austudy is also not payable while the person is subject to a “multiple entitlement exclusion”. This applies if the person becomes entitled to another payment or scheme referred to in section 578A while receiving Austudy, or is subject to an Assurance of Support. Austudy is also not payable to Community Development Employment Project Scheme (CDEP) participants or armed service widow(er)s who receive a lump sum or weekly payments under section 234(1)(b) of the Military Rehabilitation and Compensation Act 2004 (Cth).

Rate of allowance (ss 581, 1067L)

The rate of Austudy varies according to whether the recipient:

  • is single;
  • is a member of a couple; or
  • has dependent children.

In addition, a special rate is available for long-term income support recipients commencing full-time study or an Australian Apprenticeship.

Bereavement Allowance

Eligibility (ss 7, 315)

The Bereavement Allowance is payable for a maximum of 14 weeks after the death of a person’s partner. Where the person is pregnant at the time of her partner’s death, this period may be extended to the end of the pregnancy (when, in the normal course of events, she would become eligible for the Parenting Payment (single) (see “Parenting Payment”, below).

To qualify for this payment, the person must have been a member of a couple where one partner has died. From 1 July 2009, Bereavement Allowance is payable to persons in same-sex relationships. If the person and their partner were Australian residents when the partner died, no previous residence is required. Otherwise, the person has to have been an Australian resident and in Australia for 104 weeks or have a qualifying residence exemption. Alternatively, a woman can qualify for this allowance if, immediately before the death of her husband, a Wife pension or Partner Service Pension (see pt III Veterans’ Entitlements Act 1986 (Cth)) was payable to her and she was not in Australia at the time of her husband’s death.

Rate of allowance (ss 329, 1066)

The rate of Bereavement Allowance is the same as for the single Age Pension including the Pension Supplement. The rate payable is subject to the pension income or assets test.

Newstart Allowance

Eligibility (ss 7, 593, 596, 597, 613)

To be eligible for Newstart Allowance, a person must be at least 22 and below Age Pension age. The person must:

  1. be unemployed (i.e. primarily concerned with finding full-time work, and not significantly engaged in setting up a business or some activity that interferes with their ability to look for, or take up, employment);
  2. be an Australian resident;
  3. satisfy an activity test (or not be required to do so);
  4. be prepared to enter into an Employment Pathway Plan, and comply with an Agreement in force;
  5. not be involved in industrial action involving the person or their trade union;
  6. not reduce their job prospects by moving to an area of lower employment prospects; and
  7. not be enrolled as a full-time student.

The activity test is set out in section 601. The person must show that they are actively seeking and willing to undertake suitable paid work; and that they are complying with any directions from Centrelink or their Job Network Provider to undertake paid work or training.

There are exemptions to the activity test (ss 602C to 603F). These include:

  • over 55 and engaged in at least 30 hours a week of approved unpaid voluntary work, or a combination of such work and part-time paid employment;
  • attending a training camp for the Armed Forces Reserve (or similar);
  • covered by a general special circumstances exemption, such as homelessness, major personal crisis, major disruption to their home, temporary caring responsibilities, newly-arrived refugees, etc.;
  • unfit for more than eight hours work due to temporary illness or injury, and unable to undertake another suitable activity;
  • covered by an automatic 12-month maximum special family circumstances exemption, such as foster caring, home schooling, and caring for four or more children; or
  • covered by special circumstances such as caring for a dependent child with a disability, being subject to domestic violence, extremely high stress due to recent relationship breakdown, the death of an immediate family member and caring responsibilities.

Increasingly, activity test requirements are being modified, rather than a complete exemption being allowed. In addition, people deemed to have a “partial capacity to work” (s 16B) will be required to look for work of up to 25 hours per week, but will be deemed to fully meet the activity test if they undertake 15 hours work per week. This decision will be made following a Job Capacity Assessment (see “Disability Support Pension”, above).

Employment pathway plans

Employment Pathway Plans are written agreements “negotiated” between Centrelink and a recipient of activity-tested payments. In practice, they are generally negotiated with a Job Network Provider, but must be approved by Centrelink.

Employment Pathway Plans require the person to do things to improve their chances of obtaining employment. These include job training, paid work experience, unpaid voluntary work and applying for a certain number of jobs in a period. Newstart Allowance is usually not payable until a person signs an Employment Pathway Plan, and a participation failure may result if a person unreasonably fails to comply with the terms of the Employment Pathway Plan (see below).

Waiting periods

Generally, a person must wait seven days from the date of claim before becoming eligible for Newstart Allowance, unless the person transfers from another income support payment within the previous 13 weeks. The waiting period may be reduced or waived because of financial hardship.

In addition, payment may be deferred where the person has liquid assets of more than $5,500 (single) or $11,000 (member of a couple, or with dependent children).

Migrants who entered Australia or became permanent residents after 4 March 1997 must serve a waiting period of 104 weeks, although Special Benefit may be available in some circumstances.

There are also waiting periods for people who get payouts of sick leave, annual leave, long service leave or maternity leave, or have done seasonal work earning more than “average weekly ordinary time earnings” in the six months prior to claim.

Participation payment failures

Participation Failures are set out in division 3A of the SSA Act. The regime applies to Participation Payments (generally New Start Allowance, but for some people Youth Allowance, Parenting Payment and Special Benefit).

There are now four possible types of failure:

  1. no show no pay failures (sub-div B);
  2. connection failures (sub-div C);
  3. reconnection failures (sub-div C); and
  4. serious failures (sub-div D).

Centrelink can also impose an unemployment non-payment period.

“No show no pay” failures

A person commits a no show no pay failure if they:

  • fail to do something required by an Employment Pathway Plan, or commit misconduct while participating;
  • fail to comply with a serious failure requirement, or commit misconduct while complying; or
  • intentionally act in a way that could have the reasonably foreseeable result of a job offer not being made.

It is only possible to commit one “no show no pay” failure per day. The penalty for a failure is the loss of one-tenth of the person’s fortnightly payment. A failure only applies if the person has no reasonable excuse (unless the person commits misconduct), although rules as to what constitutes a “reasonable excuse” have been tightened (see s 42(UA)).

Connection failures

A person commits a connection failure if (without reasonable excuse) they:

  • fail to attend an appointment required by Centrelink notice or Employment Pathway Plan, or to enter into an Employment Pathway Plan;
  • fail to meet a job search requirement or comply with an Employment Pathway Plan requirement; or
  • fail to keep or return a job seeker diary.

If a connection failure is committed, the person may be required to comply with a reconnection requirement (essentially an opportunity to fix the failure).

Reconnection failure

A person commits a reconnection failure if they fail to comply with a reconnection requirement without reasonable excuse.

The penalty for a reconnection failure is loss of one-tenth of the person’s fortnightly payment for each business day until the failure is fixed. Further reconnection requirements may be imposed even if the person had a reasonable excuse for committing an earlier reconnection failure.

Serious failure

A serious failure is committed if a person, without reasonable excuse, persistently fails to comply with their obligations, in relation to a participation payment. An eight-week non-payment period applies if a serious failure is committed.

Centrelink may require the person who has committed a serious failure to comply with a serious failure requirement. If the person begins to comply, Centrelink may end the non-payment period.

If Centrelink determines that the person would be in severe financial hardship if required to serve the non-payment period, the non-payment period can be ended early.

Comprehensive Compliance Assessment

Before determining that a person has committed a serious failure due to persistent non-compliance, Centrelink must conduct a Comprehensive Compliance Assessment to ascertain why the person has committed failures or failed to meet Centrelink requirements, whether the person has employment barriers, and whether the participation requirements are appropriate.

Three failures in any six-month period will automatically trigger an Assessment. At an Assessment, a Centrelink officer will, among other things, consider whether the person would benefit from any additional assistance. Failure to attend an Assessment may result in a connection failure.

Unemployment non-payment period

If a person is unemployed due to misconduct, or an unreasonable voluntary act, generally an eight-week non-payment period applies. This can be ended early if the person is in severe financial hardship, and is in a specified class of persons (e.g. has an impairment, is homeless, or has a dependent child).

Other penalties and non-payment periods

Centrelink may impose a deferment period on a seasonal worker who is “between jobs” (s 633). The length of the period will depend on how long the person worked and how much they earned (see s 16A).

A deferment of 26 weeks may be imposed if a person reduces their own employment prospects by moving to a new place of residence without sufficient reason. There is only “sufficient reason” when the person has moved to join a family member, for treatment of illness, to undertake approved rehabilitation or training, or due to an “extreme circumstance” (e.g. domestic violence) (s 634).

Rate of allowance (ss 643, 1068)

The rate of Newstart Allowance varies according to whether the recipient:

  • is single;
  • is a member of a couple;
  • has dependent children; or
  • is aged over 60.

Work for the Dole participants may be eligible for an additional $20.80 per fortnight.

A person on Newstart Allowance may also be eligible for Rent Assistance (see “Rent assistance”, below).

The rates are reduced if the recipient (or their partner) has income that brings the recipient above the income threshold. There is also an assets test for Newstart Allowance.

Parenting Payment

Eligibility (ss 7, 500)

A Parenting Payment (PP) is paid to a “principal parent” who has at least one “Parenting Payment child”. The parent must be an Australian resident and in Australia at the date of claim.

Parenting Payment (partnered) (PP (partnered)) is paid to a member of a couple where the child is under six years old, and Parenting Payment (single) (PP (single)) is paid to a single person where the child is under eight years old.

Transitional arrangements allowing continuation of PP to parents of older children were removed on 1 January 2013.

A recipient of the PP may have “participation requirements”. Penalties for non-compliance apply (see “Newstart Allowance”, above).

The rates of payment and income and assets tests are different for PP (partnered) and PP (single) (see below).

A “principal parent” is a person with the care of at least one dependent child, i.e.:

  • a natural or adopted child or young person in the adult’s care, and the adult is legally responsible for the young person’s day-to-day care, welfare and development; or
  • not the dependent of someone else, and wholly or substantially in the adult’s care.

The child can be the PP child of only one person at a time.

Members of a couple are those legally married but not living separately and apart on a permanent or indefinite basis, or those determined to be living in a “marriage-like relationship” with another person (including a person of the same sex). Such persons are generally precluded from receiving PP (single) or, for that matter, any payment at the single rate.

The question of whether two people are not living separately and apart, or are living in a “marriage-like relationship”, is complex and takes account of many factors, with a non-exhaustive list in section 4(3) of the SSA. They include financial aspects of the relationship, the nature of the household, social aspects, any sexual relationship and the extent of the persons’ commitment to each other.

A person applying for, or receiving, PP (single) may be obliged to provide Centrelink with information on their living arrangements and relationship with the other person. Failure to provide the information will lead to refusal, suspension or cancellation of the payment. If the information provided by the person does not establish that the person is single, the PP (single) is not payable.

Parenting Payment is also not paid if:

  • another person is receiving PP for the same child;
  • the person’s partner is receiving PP;
  • the person is receiving another social security payment, or payments under another Commonwealth scheme; or
  • the person is serving a waiting or deferment period.
Participation requirements

A Parenting Payment recipient may be required to sign an Employment Pathway Plan. Failure to comply with the Parenting Payment Employment Pathway Plan may result in a penalty being imposed. The penalties are the same as for Newstart Allowance breaches (see “Newstart Allowance”, above).

Rate of payment (ss 503, 1068A, 1068B)

There are two rates of Parenting Payment:

  • the Parenting Payment – single rate; and
  • the Parenting Payment – partnered rate.

The PP (single) rate is subject to the same assets tests as for pension payments. The income test is subject to frequent changes – check Centrelink for details.

The PP (partnered) rate will depend on whether the person’s partner is receiving a benefit. An asset limit applies which is the same as the pensioner assets test.

Partner Allowance (benefit)

Note: This payment is no longer open to new applicants.
Eligibility (s 771HA)

The partner of a person receiving a benefit may also receive a Partner Allowance.

Sickness Allowance

Eligibility (ss 7, 666)

To be eligible for Sickness Allowance, a person must be aged between 22 and Age Pension age, and be an Australian resident.

The person must be temporarily incapacitated for work (or study, if receiving Austudy or ABSTUDY). That incapacity must be caused wholly by a medical condition arising from sickness or an accident. Immediately before the incapacity, the person must have been in employment, and when the incapacity ends must be able to return to their job.

Incapacity for work is judged by assessing the extent to which a person’s medical condition limits their ability to engage in paid work. Sickness Allowance is also payable to recipients of Austudy or ABSTUDY who are temporarily incapacitated but still committed to resuming full-time study.

A person who claims Sickness Allowance within five weeks of becoming incapacitated for work may be paid from the date of incapacity.

Rate of allowance (ss 709, 1068)

The rate of the Allowance varies according to the age of the person. The rates are the same as for Newstart Allowance.

Special Benefit

Eligibility (ss 7, 729, 731)

Special Benefit is a “safety net” that provides income support for people who do not qualify for another social security payment, and who need financial support.

To be eligible for Special Benefit the person must:

  • not be eligible for a pension or benefit under the SSA or a service pension under the Veterans’ Entitlements Act 1986 (Cth);
  • not be disqualified for Newstart Allowance because of industrial action, being a seasonal worker, moving to a low employment area or breaching the requirements of the SSA;
  • not be disqualified for Parenting Payment or Austudy for failure to meet participation requirements;
  • not be disqualified for the Youth Allowance because of failure to satisfy the activity test or breaching the requirements of the SSA;
  • be a resident of Australia or hold a visa that the minister determines eligible for Special Benefit; and
  • be unable to earn a sufficient livelihood for self and dependents due to reasons beyond their control.

The SSA gives Centrelink discretion to decide whether to recognise a person as “unable to earn a sufficient livelihood” and to determine whether Centrelink should pay them. These decisions are affected by:

  • whether they are able to support themselves or receive adequate support from their families;
  • the reasons behind their lack of support; and
  • the nature and extent of their financial hardship.

A two-year waiting period may apply to Special Benefit applicants. An exemption applies for holders of a specific class of visas, or where there has been a significant change in circumstances beyond the person’s control.

Typical caseswhere Special Benefit may be paid include:

  • resident children, whose parents are not entitled to payments;
  • victims of natural disasters;
  • people on Criminal Justice Stay Visas or some other temporary visas; and
  • migrants who are too old to receive Newstart Allowance but cannot meet the residence requirements for Age Pension.

These categories are not exhaustive. Both Centrelink and appeals Tribunals will look at the circumstances of each case (see Chapter 7.2: Social Security Appeals).

People receiving Special Benefit who are holders of designated temporary protection, humanitarian, and safe haven visas are usually required to meet the activity test from 13 weeks after the visa is granted (see “Newstart Allowance”, above). People living in isolated areas, some carers, pregnant women, parents, and some people who are temporarily ill are specifically exempt, as well as those covered by the “special circumstances” general discretion.

Failure to comply with the activity test or Special Benefit Employment Pathway Plan may result in a penalty being imposed. The penalties are the same as for Newstart Allowance breaches (see above).

Rate of benefit (s 746)

Special Benefit is paid at a rate which does not exceed the rate of Newstart Allowance, Austudy or Youth Allowance (see above) that the person would receive if they qualified for that benefit.

Centrelink has a discretion to pay Special Benefit at a lower rate. A strict income test applies, so that the rate of payment is reduced by $1 for every $1 of the person’s income. There is no “free area” for Special Benefit, so any income reduces the payment rate. The rate may also be reduced if the person is in receipt of free board and/or lodgings.

The assets test for Special Benefit is generally that also used for Sickness Allowance and Newstart Allowance. For a long-term payment of Special Benefit, available funds must be no more than $5,000.

Rent Assistance may also be payable (see “Rent assistance”, below). Education Entry Payments and Pensioner Education Supplements may be payable to single parents receiving Special Benefit.

Youth Allowance

Eligibility (ss 7, 540)

Youth Allowance is generally for people aged 16–22 who satisfy the activity test or up to 25 if undertaking full-time study. People over 25 may be eligible if they were receiving Youth Allowance as an Australian Apprentice or full-time student before turning 25 and continue in that course or apprenticeship. A person who is 15 may also be eligible for Youth Allowance if they are independent. Exemptions from the full-time study requirement apply (see below).

The person must be an Australian resident (or exempt resident) and in Australia to receive Youth Allowance.

The activity test is satisfied if the applicant:

  • is undertaking full-time study;
  • is undertaking approved full-time training;
  • is seeking and willing to undertake paid work (if they are not an early school leaver);
  • is a carer of a child and the applicant meets the secretary’s requirements;
  • is complying with an Employment Pathway Plan, and is either:
    • an early school leaver;
    • in a class of persons specified by Centrelink; or
    • is determined by Centrelink to be taken to satisfy the activity test.
  • if the person complies with a Centrelink notice to do paid work, participate in a program of work or participate in a training program.

A person under 22 years old who does not have a Year 12 or equivalent qualification will usually need to participate in full-time education or training, or participate full-time (25 hours a week) in part-time study or training, in combination with other approved activities. If a person under 22 has a partial capacity to work, they may also be eligible for a Youth Disability Supplement.

Payment of Youth Allowance is subject to waiting periods similar to those for Newstart Allowance (see “Waiting periods” under “Newstart Allowance”, above). Failure to comply with the activity test or Youth Allowance Employment Pathway Plan may result in a penalty being imposed. The penalties are the same as for Newstart Allowance (see above).

Under 18-year-olds

Sixteen- and seventeen-year-olds who do not have the equivalent of Year 12 education normally have to undertake full-time education or training to receive Youth Allowance. However, they may be exempted if one of the following applies:

  • temporary incapacity following illness or accident;
  • disability or learning difficulties;
  • has given birth within the last six weeks;
  • homelessness;
  • in a state of personal crisis, or is a refugee (in some circumstances);
  • part-time work and/or education of at least 20 hours per week;
  • losing a job;
  • inability to obtain an education place;
  • a drug problem; or
  • inability to undertake full-time study.

See section 543A for further details.

For the purposes of determining the correct rate and the application of parental means testing, a young person is classified as: dependent at home; dependent and required to live away from home; or independent.

Required to live away from home

A young person (that is, someone aged from 18 to under 25) is classified as required to live away from home (s 1067D) if they:

  • are not independent;
  • do not live at the home of a parent; and
  • need to live away from home for education, training or employment, or their prospects are significantly increased if they live away from home.
Independent

A young person is independent (s 1067A) if they:

  • are an orphan;
  • are a refugee not wholly or substantially dependent on someone else and without a parent living in Australia;
  • are self-supporting due to an employment history as defined in the legislation;
  • have an employment history as defined in the legislation, are unsupported, and are disadvantaged in relation to employment or education;
  • are a member of a couple;
  • have a dependent child;
  • have parents who cannot exercise their responsibilities;
  • are in state care; or
  • cannot live at home, due to extreme family breakdown, serious risk to physical or mental well-being due to violence, sexual abuse or other unreasonable circumstances, lack of stable accommodation; and are not receiving continuous support, whether financial or other, from a parent, guardian, or the state.
Rate of allowance (pt 3.5)

Youth Allowance is paid subject to:

  • the parental and personal means test (if the person is not independent); or
  • the personal means test (if the person is independent and single); or
  • the partner and personal means test (if the person is independent and a member of a couple).

The parental means test applies to dependent young persons, including those required to live away from home. From 1 July 2013 the rate reduces by 20 cents for every $1 the parent’s income exceeds $47,815. There is also an asset test and family actual means test. The test which produces the lowest payment is applied.

Under the personal income test, Youth Allowance for full-time students is reduced as income increases. However the first $7,310 of a merit and equity based scholarship is exempt. A job seeker can earn $143 per fortnight and a student or Australian apprentice $405 per fortnight without affecting the rate. The rate of reduction after that changes frequently; contact Centrelink for specific rates.

Youth Allowance is not payable if the assets value (parental or partner plus personal) exceeds the amounts set out in section 547C. These limits increase twice a year.

Most students in receipt of Youth Allowance will also receive the Student Start-up Scholarship, worth a maximum of $2,050 per year (paid in two instalments). A fares allowance may also be paid.

Supplementary payments

Carer Allowance
Eligibility (ss 952-955)

Both the carer and the person being cared for must be Australian residents.

To get Carer Allowance in respect of an adult(aged 16 or over):

  • the person being cared for must have a score of at least 30 under the Adult Disability Assessment Tool (ADAT) (see “Carer Payment”, above) being calculated on the basis of a professional questionnaire score of at least 12;
  • the care receiver must be a family member or someone Centrelink-approved; and
  • the carer must provide care on a daily basis in a private home, except during (temporary) hospitalisation or respite periods.

If the care provider and receiver do not share the same private home, the care provided must not attract award wages, total at least 20 hours per week, and relate to the bodily functions or sustaining the life of the care receiver.

A carer may be eligible for up to two Carer Allowance (adult) payments, if they care for two disabled adults. Carer Allowance may be shared between two carers with Centrelink approval, but is not payable to more than one member of a couple.

To get Carer Allowance in respect of a child, the person must have a dependent child under 16 years of age who qualifies as a disabled child.

A “disabled child” is a child who has a physical, intellectual or psychiatric disability which is permanent, or will continue for an extended period. The child must receive daily care and attention in a private home that is the residence of the carer and the care receiver, and must have a prescribed disability, or the carer must be given a qualifying rating of “intense” under the Disability Care Load Assessment (Child) Determination (DCLA). Such a rating may be given to a carer who cares for two disabled children (whose disabilities do not individually qualify) provided the combined special care needs are at a significant level when measured by the DCLA.

Qualification for Carer’s Payment in relation to children under 16 for whom constant care is provided may automatically be entitled to Carer Allowance.

Rate of allowance (s 974)

The Carer Allowance is a flat rate of $115.40 a fortnight and is not subject to either an income or an assets test. In addition, an amount of $1,000 is paid annually to a person receiving Carer Allowance for each child being cared for under 16 years.

Carer Allowance may be paid in addition to an income support payment.

Mobility Allowance (MOB) (ss 1035, 1035A)

This allowance is available to people with a disability aged 16 years or over who cannot use public transport without substantial assistance and who are required to travel to work, volunteering or training etc.

Rent Assistance (ss 1070-1070Y)

A person qualified for social security pension, benefit or allowance, or Family Tax Benefit A (FTB(A)) at greater than the base rate, may qualify for additional Rent Assistance.

The assistance is payable to a person only if they pay at least a minimum amount of rent, which varies depending on their marital status. The assistance is not payable to a person who pays rent to a state housing authority (such as the Office of Housing). The amount of the Rent Assistance varies according to the amount of rent paid, increasing until the maximum Rent Assistance rate is reached. If a person or their partner is receiving a Centrelink payment, then Rent Assistance is paid as an addition to that payment rather than as an addition to the pension.

Special rules apply to single sharers, people who pay board and lodging or live in a retirement village. Special rules also apply if the person is under 21 and receiving a Disability Support Pension.

Rent Assistance is not paid if the person is under 25 without dependents and living in the parental home while receiving New Start Allowance.

Rent Assistance is paid as part of another payment and may be reduced due to the income test applicable to that payment.

Crisis payment

A person may be eligible for a payment in particular situations if they are in severe financial hardship and have just come out of prison or psychiatric confinement (of at least 14 days’ duration), are recently homeless in some situations (such as domestic violence) or have just arrived in Australia on a humanitarian visa or another reason in the legislation applies. These claims must generally be made within seven days of the circumstance occurring.

Family Tax Benefit

Eligibility (ss 21, 22 Family Assistance Act)

To be eligible for Family Tax Benefit (FTB) an adult must have at least one “FTB child” and either be an Australian resident, or hold a Special Category or prescribed visa. An FTB child is generally under 15 where the adult is legally responsible for the child’s day-to-day care, and the child is in the adult’s care and living in Australia or with the adult. Persons aged 16–19 may also be an FTB child if in an adult’s care and living in Australia or with the adult and undertaking full-time secondary study (the maximum age for FTB is 19 from 1 January 2013). Rent Assistance can be paid with FTB(A). An FTB activity test may apply if the child is aged 16–20. FTB(B) provides extra assistance to predominantly single-income families.

Since 1 July 2011, payment of FTB(A) for a child turning four is conditional on the child undergoing a health check. For the financial year a child turns one, two or five years, immunisation requirements for the child must be met.

In some circumstances, the base rate of FTB(A) can be paid for three years of temporary absence from Australia. From 1 January 2013, more than the base rate of FTB(A) and (B) can generally be paid for only six weeks of a temporary absence from Australia. However, the length of the recipient’s last return to Australia, or type of visa held, may affect entitlement to FTB while absent from Australia.

FTB can be paid as a fortnightly payment, as a reduced tax instalment or as an end of the year lump sum tax rebate. There is no assets test for FTB(A) or (B).

Only one member of a couple caring for an FTB child can be paid the FTB. If the parents are separated FTB can be divided between both parents depending on the proportion of care each provides for the child. However, if the level of care provided is less than 35%, the child is not taken to be a FTB child of that care provider.

To receive more than the base rate of FTB(A) for children of a previous relationship, reasonable action to obtain child support must be taken. Blind pensioners are exempt from the maintenance action test.

There is no assets test.

Rate of assistance (s 58, sch 1)

The rate of payment depends on the age of the child, with different maximum rates of FTB(A) for children aged 0–12 years, 13–15, and 16–19.

FTB(A) is subject to an income test. The maximum rate of FTB(A) is paid where the taxable income of the adult is less than the threshold in the current year of income. For every $1 received as income above this amount the rate of FTB(A) reduces by 20 cents. The minimum rate of FTB(A) is paid where taxable income is less than the higher income threshold for the current year. The threshold is increased for the second and any subsequent children. For every $1 received as income above this amount the rate of FTB(A) reduces by 30 cents until the rate is nil. There is no income test for persons receiving a social security payment.

The rate of FTB(B) also depends on the age of the child; either 0–4 years or 5–18. Once income exceeds the threshold, the rate of FTB(B) is reduced by 20 cents for every $1 of income above this amount.

Note: FTB(B) is paid to families where the primary earner has an adjusted taxable income of less than $150,000. In this case, it is the income of the lower earner that affects how much FTB(B) the family will receive.

Bonuses

Baby bonus

The Baby Bonus is a lump sum payment paid to:

  • a parent who is eligible for Family Tax Benefit (FTB) (see above) within 26 weeks of the birth of the child; or
  • a person who is not the parent of the child but who has the care of the child within 26 weeks of its birth and who is eligible for FTB.

A parent may also be qualified for the Baby Bonus for an adopted child or a stillborn child. Generally only one individual is eligible for the Baby Bonus in respect of a child. In some circumstances the Baby Bonus can sometimes be apportioned amongst multiple persons, but cannot exceed 100% of the current rate.

From 1 July 2013, the rate of the Baby Bonus is $5,000 for the first child and $3,000 for all subsequent children and is paid in 13 fortnightly instalments. A higher amount is paid in the first instalment. It is income-tested and payable to families with combined adjusted taxable income of $75,000 or less in the six months following the birth of the child or the child’s entry into the family’s primary care. There is no assets test. Claims must be made within 52 weeks starting from the day of child’s birth or the day the adopted child comes into the person’s primary care.

Income support bonus

Introduced on 5 March 2013, the Income Support Bonus is a twice-annual payment made to eligible recipients to assist with unexpected costs. It is tax-free and not subject to means-tests.

To be eligible a person must be receiving a qualifying payment, including Newstart Allowance, Sickness Allowance, Youth Allowance, Special Benefit, PP and Austudy.

An Income Support Bonus payment of $105 is payable to single persons, and $87.50 to persons who are members of a couple (although $105 may be paid to such persons in certain circumstances).

Paid parental leave (PPL)

Under the PPL scheme eligible parents/carers who have or adopt a child after 1 January 2011 are paid a maximum of 18 weeks parental leave pay, at a weekly before-tax rate of $622.10. Applicants must be the primary carer of the newborn or recently adopted child; meet work, income and residency tests; and not be working.

The work test requires that the applicant have undertaken qualifying work (at least one hour per day) for at least 10 of the 13 months prior to the birth or adoption, and for at least 330 hours in that 10-month period. No more than eight weeks may elapse between two consecutive qualifying work days. Exceptions may apply for premature births or where pregnancy complications prevent work.

Parental Leave pay and the Baby Bonus cannot both be paid for the same child. A person must have an individual adjusted taxable income of $150,000 or less in the financial year prior to the date of claim, birth or adoption (whichever is earlier). There is no assets test.

Employers must provide Parental Leave pay to eligible employees. If an employer is not required to provide Parental Leave pay, they can still choose to provide it in agreement with the employee. Eligible parents who do not receive Parental Leave pay from their employer will receive it from Centrelink.

From 1 July 2013, a person may be eligible for a maximum period of two weeks “Dad and Partner” pay if they meet the eligibility, work, income and residency tests, and are on unpaid leave or not working during the pay period.

Allowances and payments :: Last updated: Sun Jun 30th 2013