VETERANS' ENTITLEMENTS ACT 1986 - SCHEDULE 6 Calculation of rates of service pension and income support supplement

(d) add any additional amounts that are not subject to income or assets testing.

Note 1: The additional amounts referred to in paragraph (b) are amounts for pension supplement and rent assistance.

Note 2: The only additional amount for the purposes of paragraph (d) at this time is remote area allowance.

(2) The overall rate calculation process is described in the relevant Method statement in Module A of the Rate calculator.

(1) The Rate Calculator uses the following standard categories of family situations:

(2) If it is necessary to distinguish between the members of sub-categories of these standard categories, further words of description are added to the standard category label.

(a) the letters and number SCH6 (followed by a dash), which indicate that the Module is in the Rate Calculator in this Schedule; and

(b) a letter that is the letter allocated to the Module in which the point occurs; and

Example: Point SCH6-E2 is the 2nd point in Module E of the Rate Calculator in this Schedule.

(1) If a person's rate of service pension is affected by a reduction under any or all of the following:

Item	Component of the rate
1	all of the rate apart from the person's pension supplement amount and any increase under Module C (rent assistance) of the Rate Calculator
2	the portion of the person's pension supplement amount equal to the person's pension supplement basic amount
3	(a) if an election by the person under subsection 60A(1) is in force--any remaining portion of the person's pension supplement amount; or (b) otherwise--any remaining portion of the person's pension supplement amount to the extent to which it exceeds the person's minimum pension supplement amount
4	the amount of any increase under Module C
5	the person's minimum pension supplement amount

Note: Table item 5 will not apply if an election by the person under subsection 60A(1) is in force, as the rate would have already been reduced to nil.

(a) is worked out under subpoint SCH6-A1(4) of Schedule 6 and is the revised rate; or

(3) If a person's rate of income support supplement is affected by a reduction under any or all of the following:

Item	Component of the rate
1	all of the rate apart from any increase under Module C (rent assistance) of the Rate Calculator and the person's minimum pension supplement amount
2	the amount of any increase under Module C
3	the person's minimum pension supplement amount

(a) the rate (the main rate ) of a person's service pension or income support supplement is to be reduced as described in subclause (1) (applying of its own force or as affected by subclause (2)) or subclause (3); and

the person's quarterly pension supplement is reduced to the same extent (if any) that the component of the main rate that would correspond to the person's minimum pension supplement amount would be reduced under subclause (1) or (3) were the election not in force.

(1) The amounts and rates set out in the Rate Calculator at the time of commencement of this Schedule (the commencing time ) are the same as the corresponding amounts and rates that applied under this Act as in force on 1 January 1997.

(2) However, each amount or rate so set out that is subject to indexation or adjustment under Division 18 of Part IIIB is taken to be replaced immediately after the commencing time by the amount or rate that would have been in force at that time as a result of the application of that Division if this Schedule had commenced on 1 January 1997.

Part 2 -- Rate Calculator

Module A -- Overall rate calculation process

Rate to be an annual rate

SCH6-A1(1) The rate of pension is an annual rate (fortnightly amounts are provided for information only).

Method statement 1 (service pension, not blind, not war widow/war widower--pensioner)

(2) The rate of service pension for a person who:

(a) is not permanently blind; and

(b) is not a war widow/war widower--pensioner;

is worked out in accordance with Method statement 1.

Note: For war widow/war widower--pensioner see subsection 5Q(1).

Method statement 1

Step 1. Work out the person's maximum basic rate using MODULE B below.

Step 1A. Work out the amount of pension supplement using Module BA below.

Step 2. Work out the amount per year (if any) by way of rent assistance using MODULE C below.

Step 4. Add up the amounts obtained in Steps 1, 1A and 2: the result is called the maximum payment rate .

Step 5. Apply the ordinary/adjusted income test using MODULE E below to work out the reduction for ordinary/adjusted income.

Step 6. Take the reduction for ordinary/adjusted income away from the maximum payment rate: the result is called the income reduced rate .

Step 7. Apply the assets test using MODULE F below to work out the reduction for assets.

Step 8. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate .

Step 9. Compare the income reduced rate and the assets reduced rate: the lower of the 2 rates, or the income reduced rate if the rates are equal, is the provisional payment rate .

Step 10. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.

Step 11. Add any amount obtained in Step 10 to the person's provisional payment rate (see Step 9). The result is the person's rate of service pension .

Note 1: For ordinary/adjusted income see point SCH6-E1.

Note 2: If a person's assets reduced rate is less than the person's ordinary/adjusted income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 52Y and 52Z).

Note 3: If a person's rate is, or is to be, an income reduced rate or an assets reduced rate, and at least one of those reduced rates is not a nil rate, the person may be able to take advantage of provisions dealing with the pension loans scheme (sections 52ZAAA to 52ZM).

Note 4: If a person's rate is reduced under step 9, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by clause 4 of Part 1.

Note 4A: Clause 30 of Schedule 5 may affect the provisional payment rate in step 9.

Note 5: The rate calculation for a member of a couple is affected by the operation of point SCH6-A2.

Note 6. The amount of a fortnightly instalment of service pension will be rounded to the nearest cent (see subsection 58A(5)).

Note 7: For the minimum amount of a fortnightly instalment of service pension, see subsection 58A(9).

Note 8: An amount of remote area allowance is to be added under Step 11 only if the person's rate of service pension is greater than nil or, apart from section 36A, 37A or 38A, the person's rate of service pension would be nil.

Note 9: The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).

Method statement 2 (service pension, blind, not war widow/war widower--pensioner)

(3) The rate of service pension for a person who:

(a) is permanently blind; and

(b) is not a war widow/war widower--pensioner;

is worked out in accordance with Method statement 2.

Note: For war widow/war widower--pensioner see subsection 5Q(1).

Method statement 2

Step 1. Work out what would be the person's rate of service pension if Method statement 1 applied to the person: the result is called the notional income/assets tested rate .

Note: This is the only situation in which a blind person's pension can be made subject to an income test or assets test (see point SCH6-A3).

Step 2. Work out the person's maximum basic rate using MODULE B below.

Step 2A. Work out the amount of pension supplement using Module BA below.

Step 4. Add up the amounts obtained in Steps 2 and 2A: the result is called the maximum payment rate .

Step 5. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.

Step 6. Add:

(a) the maximum payment rate; and

(b) any amount obtained under Step 5.

The result is called the non-income/assets tested rate .

Step 7. Compare the notional income/assets tested rate and the non-income/assets tested rate: whichever is the greater is the person's rate of service pension .

Note 1: The amount of a fortnightly instalment of service pension will be rounded to the nearest cent (see subsection 58A(5)).

Note 2: For the minimum amount of a fortnightly instalment of service pension, see subsection 58A(9).

Note 3: The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).

Method statement 3 (service pension, not blind, war widow/war widower--pensioner)

(4) The rate of service pension for a person who:

(a) is not permanently blind; and

(b) is a war widow/war widower--pensioner;

is worked out in accordance with Method statement 3.

Note: For war widow/war widower--pensioner see subsection 5Q(1).

Method statement 3

Step 1. Work out what would be the person's rate of service pension if Method statement 1 applied to the person: the result is called the provisional rate .

Step 2. Work out the person's ceiling rate in accordance with points SCH6-A4 to SCH6-A9.

Step 2A. Work out the amount per year (if any) for rent assistance using MODULE C below.

Step 4. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.

Step 5. Add:

(a) the ceiling rate; and

(b) any amount obtained under step 2A; and

and, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, subtract the person's minimum pension supplement amount. The result is the revised rate .

Step 6. Compare the provisional rate and the revised rate: the person's rate of service pension is:

(a) the provisional rate if it is lower than the revised rate; or

(b) the revised rate if it is lower than or equal to the provisional rate.

Note: The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).

Method statement 4 (service pension, blind, war widow/war widower--pensioner)

(5) The rate of service pension for a person who:

(a) is permanently blind; and

(b) is a war widow/war widower--pensioner;

is worked out in accordance with Method statement 4.

Note: For war widow/war widower--pensioner see subsection 5Q(1).

Method statement 4

Step 1. Work out the person's ceiling rate in accordance with points SCH6-A4 to SCH6-A9.

Step 1A. Work out the amount per year (if any) for rent assistance using MODULE C below.

Step 3. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.

Step 4. Add:

(a) the ceiling rate; and

(b) any amount obtained under step 1A; and

Note: The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).

Method statement 5 (income support supplement, not blind)

(6) The rate of income support supplement for a person who is not permanently blind is worked out in accordance with Method statement 5.

Method statement 5

Step 1. Work out the amount of the person's maximum basic rate using MODULE B below.

Step 1A. Work out the amount of pension supplement using Module BA below.

Step 2. Work out the amount per year (if any) for rent assistance using MODULE C below.

Step 4. Add up the amounts obtained in Steps 1, 1A and 2: the result is called the maximum payment rate .

Step 5. Apply the ordinary/adjusted income test using MODULE E below to work out the reduction for ordinary/adjusted income.

Step 6. Take the reduction for ordinary/adjusted income away from the maximum payment rate: the result is called the income reduced rate .

Step 7. Apply the assets test using MODULE F below to work out the reduction for assets.

Step 8. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate .

Step 9. Work out the person's ceiling rate in accordance with points SCH6-A4 to SCH6-A9.

Step 9A. Add:

(a) the ceiling rate; and

(b) any amount obtained under step 2;

Step 10. Compare the income reduced rate (see Step 6), the assets reduced rate (see Step 8) and the increased rate (see step 9A): the person's provisional payment rate is equal to:

(a) whichever is the lowest of those rates; or

(b) if 2 of those rates are the same and the third one is higher--the lower rate; or

Step 11. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.

Step 12. Add any amount obtained in Step 11 to the person's provisional payment rate (see Step 10): the result is the person's rate of income support supplement .

Note 1: For ordinary/adjusted income see point SCH6-E1.

Note 2: If a person's assets reduced rate is less than the person's adjusted income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 52Y and 52Z).

Note 3: If a person's rate is, or is to be, an adjusted income reduced rate or an assets reduced rate, and at least one of those reduced rates is not a nil rate, the person may be able to take advantage of provisions dealing with the pension loans scheme (sections 52ZAAA to 52ZM).

Note 4: If a person's rate is reduced under Step 10, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by clause 4 of Part 1.

Note 4A: Clause 30 of Schedule 5 may affect the provisional payment rate in step 10.

Note 5: The rate calculation for a member of a couple is affected by the operation of point SCH6-A2.

Note 6. The amount of a fortnightly instalment of income support supplement will be rounded to the nearest cent (see subsection 58A(5)).

Note 7: For the minimum amount of a fortnightly instalment of income support supplement, see subsection 58A(9).

Note 8: The amount of a fortnightly instalment of income support supplement may be reduced by an advance payment deduction (see Division 6 of Part IVA).

Method statement 6 (income support supplement, blind)

(7) The rate of income support supplement for a permanently blind person is worked out in accordance with Method statement 6.

Method statement 6

Step 1. Work out the person's ceiling rate in accordance with points SCH6-A4 and SCH6-A5.

Step 1A. Work out the amount per year (if any) for rent assistance using MODULE C below.

Step 3. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.

Step 4. Add:

(a) the ceiling rate; and

(b) any amount obtained under step 1A; and

Note: The amount of a fortnightly instalment of income support supplement may be reduced by an advance payment deduction (see Division 6 of Part IVA).

Members of couple

SCH6-A2 If 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing those resources on a 50/50 basis (see points SCH6-E3 and SCH6-F2 below). They will also be treated as sharing expenses (eg for rent) on a 50/50 basis (see points SCH6-C10 and SCH6-C11 below).

Ordinary/adjusted income test and assets test generally not to apply to permanently blind people

SCH6-A3 Except for the purposes of Step 1 in Method statement 2 (applicable in respect of permanently blind service pensioners who are not war widows/war widowers--pensioners), a permanently blind person's pension is not subject to an ordinary/adjusted income test (compare Module E) or an assets test (compare Module F).

Note: For war widow/war widower -- pensioner see subsection 5Q(1).

Ceiling rate

SCH6-A4 The ceiling rate for a war widow/war widower--pensioner is $3,247.40 unless point SCH6-A5 applies to him or her.

Note: For war widow/war widower -- pensioner see subsection 5Q(1).

Note: The ceiling rate is adjusted 6 monthly in line with service pensions (see section 59LA).

SCH6-A5 If:

(a) a person became a war widow/war widower--pensioner before 1 November 1986; and

(b) immediately before that day the person was receiving a social security pension at a rate (the pre-November 1986 rate ) equal to or more than $3,122.60; and

his or her ceiling rate is, subject to point SCH6-A5A, equal to the pre-November 1986 rate.

Note: For war widow/war widower -- pensioner see subsection 5Q(1).

SCH6-A5A On and after 1 July 2000, the ceiling rate referred to in point SCH6-A5 is taken to be equal to the pre-November 1986 rate increased by 4%.

SCH6-A6 However, if:

(a) a war widow/war widower--pensioner is a person:

(i) to whom income support supplement or service pension is payable; and

(ii) who is not permanently blind; and

(b) the person's pension under Part II or IV is compensation reduced;

the ceiling rate for the war widow/war widower--pensioner is the sum of:

(d) the amount of the reduction in the pension under Part II or IV worked out under points SCH6-A7 to SCH6-A9.

Note: For war widow / war widower -- pensioner see subsection 5Q(1).

Compensation reduced pension under Part II or IV

SCH6-A7 A pension under Part II payable to a war widow/war widower--pensioner is compensation reduced if that pension has been reduced:

(a) by taking into account (under subsection 30(3)) the rate, or amount, of any payment that he or she is entitled to receive under the law of a State or of a foreign country; or

(b) by taking into account (under Division 5A of that Part) the rate at which any compensation is payable to him or her.

Note: For war widow / war widower -- pensioner see subsection 5Q(1).

SCH6-A8 A pension under Part IV payable to a war widow/war widower--pensioner is compensation reduced if that pension has been reduced by taking into account (under Division 4 of that Part) the rate at which any compensation is payable to him or her.

Note: For war widow / war widower -- pensioner see subsection 5Q(1).

SCH6-A9 The amount of the reduction in the pension under Part II or IV is worked out by using the formula:

where:

"full pension rate" means the amount per annum that would have been the annual rate of the pension under Part II or IV if it had not been reduced.

"compensation reduced rate" means the annual rate of pension under Part II or IV payable after that pension has been reduced.

Module B -- Maximum basic rate

Maximum basic rate

SCH6-B1 A person's maximum basic rate depends on the person's family situation. Work out which family situation in Table B applies to the person. The maximum basic rate is the corresponding amount in column 3.

Table B--Maximum basic rates
Column 1 Item	Column 2 Person's family situation	Column 3 Rate per year $	Column 4 Rate per fortnight $
1.	Not a member of a couple	9,006.40	346.40
	A member of an illness separated couple
	A member of a respite care couple
2.	Partnered	7,511.40	288.90

Note 1: For member of a couple and partnered see section 5E, and for illness separated couple and respite care couple see subsections 5R(5) and (6).

Note 2: The maximum basic rates are adjusted 6 monthly: see sections 59B to 59G.

Module BA -- Pension supplement

Pension supplement

SCH6-BA1 A pension supplement amount is to be added to the person's maximum basic rate.

Residents in Australia etc.

SCH6-BA2 If the person is residing in Australia and:

(a) is in Australia; or

(b) is temporarily absent from Australia and has been so for a continuous period not exceeding 13 weeks;

the person's pension supplement amount is:

(d) otherwise--the amount worked out under point SCH6-BA3.

Residents in Australia etc.--no election in force

SCH6-BA3 The person's pension supplement amount is the amount worked out by:

(a) applying the applicable percentage in the following table to the combined couple rate of pension supplement; and

(b) if:

(i) the person is not partnered; and

(ii) the amount resulting from paragraph (a) is not a multiple of $2.60;

rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is not a multiple of $2.60 but is a multiple of $1.30).

Item	Person's family situation	Use this %
1	Not member of couple	66.33%
2	Partnered	50%
3	Member of illness separated couple	66.33%
4	Member of respite care couple	66.33%

Note: For combined couple rate of pension supplement , see subsection 5GA(1).

Residents in Australia etc.--election in force

SCH6-BA4 The person's pension supplement amount is the amount worked out as follows:

(a) work out the amount for the person under point SCH6-BA3 as if the election were not in force;

(b) from that amount, subtract the person's minimum pension supplement amount.

Persons absent from Australia for more than 13 weeks

SCH6-BA5 If the person is not covered by point SCH6-BA2, the person's pension supplement amount is the person's pension supplement basic amount.

Module C -- Rent assistance

Application

SCH6-C1 Points SCH6-C2 to SCH6-C11 and point SCH6-C15 apply to a person who is in receipt of a service pension or an income support supplement. Points SCH6-C13 and SCH6-C14 apply only to a person who is in receipt of a service pension. Points SCH6-C14B and SCH6-C14C apply only to a person who is in receipt of an income support supplement.

Rent assistance

SCH6-C2 Rent assistance is an amount that may be added to the maximum basic rate or ceiling rate to help cover the cost of rent. Subject to points SCH6-C13 and SCH6-C14 (which apply only to a person who is in receipt of a service pension) and points SCH6-C14B and SCH6-C14C (which apply only to a person who is in receipt of an income support supplement), a person who is eligible for rent assistance under point SCH6-C3 can have added to his or her maximum basic rate or ceiling rate the amount applying to that person under Table C-2.

Eligibility for rent assistance

SCH6-C3 Rent assistance is to be added to a person's maximum basic rate or ceiling rate if:

(a) the person is not an aged care resident; and

(b) the person is not an ineligible property owner; and

(d) the rent is payable at a rate of more than the rent threshold rate; and

(e) either:

(i) the person is in Australia; or

(ii) the person is temporarily absent from Australia and the period in respect of which the rent assistance is sought is not a period after the first 26 weeks of the absence; and

(f) in a case where the person is entitled to be paid a family tax benefit--the person satisfies either point SCH6-C3A or SCH6-C3B.

Note 1: For aged care resident see subsection 5NC(5).

Note 2: For rent , Government rent and ineligible property owner see section 5N.

Note 3: For rent threshold rate see point SCH6-C6.

Note 4: For illness separated couple and respite care couple see subsections 5R(5) and (6).

SCH6-C3A A person satisfies this point if:

(a) the person is not a member of a couple, or is a member of an illness separated couple or a respite care couple, and is entitled to be paid a family tax benefit; and

(b) either:

(i) the person's maximum Part A rate of family tax benefit does not include rent assistance; or

(ii) the person's maximum Part A rate of family tax benefit includes rent assistance and clause 38K of Schedule 1 to the Family Assistance Act applies to reduce the person's Part A rate of family tax benefit.

SCH6-C3B A person satisfies this point if:

(a) the person is a member of a couple (other than an illness separated couple or a respite care couple) and the person, or the person's partner, is entitled to be paid family tax benefit; and

(b) either:

(i) the person's, or the person's partner's, maximum Part A rate of family tax benefit does not include rent assistance; or

(ii) the person's, or the person's partner's, maximum Part A rate of family tax benefit includes rent assistance and clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person's, or the person's partner's, Part A rate of family tax benefit.

No rent assistance if partner getting incentive allowance under the Social Security Act

SCH6-C4 If a person is a member of a couple and the person's partner is living with the person in their home, an additional amount is not to be added to the person's maximum basic rate or ceiling rate under point SCH6-C3 if an amount by way of incentive allowance is being added to the maximum basic rate or ceiling rate of the person's partner.

Note: For incentive allowance see subsection 5Q(1); the provisions of the Social Security Act relating to incentive allowance were repealed with effect from 12 November 1991 but the allowance continues to be paid to certain existing recipients under clause 36 of Schedule 1A to that Act.

Partner with rent increased pension

SCH6-C5 A person has a partner with a rent increased pension , for the purposes of this Module, if:

(a) the partner is living with the person in their home; and

(b) the partner is receiving a service pension, income support supplement, or social security pension; and

(i) the partner is receiving a service pension, income support supplement or social security pension the rate of which is increased to take account of rent paid or payable by the partner;

(ii) the partner is receiving a social security pension and is entitled to be paid family tax benefit at a rate higher than the base rate under clause 4 of Schedule 1 to the Family Assistance Act and which includes an amount to take account of rent paid or payable by the partner.

Note: For the treatment of rent paid by a member of a couple see points SCH6-C10 and SCH6-C11.

Rent threshold rate

SCH6-C6 A person's rent threshold rate depends on the person's family situation. Work out which family situation in Table C-1 applies to the person. The rent threshold rate is the corresponding amount in column 3.

Table C-1--Rent threshold rates
Column 1 Item	Column 2 Person's family situation	Column 3 Rate per year $	Column 4 Rate per fortnight $
1.	Not a member of a couple	1,856.40	71.40
	A member of an illness separated couple
	A member of a respite care couple
	Partnered--partner without a rent increased pension
2.	Partnered--partner with a rent increased pension	1,510.60	58.10

Note 1: For member of a couple and partnered see section 5E.

Note 2: For partner with a rent increased pension see point C5.

Note 3: The column 3 amounts are indexed 6 monthly in line with CPI increases (see sections 59B to 59E).

Factors affecting rate of rent assistance

SCH6-C7 The rate of rent assistance depends on:

(a) the annual rent paid or payable by the person; and

(b) whether or not the person has a partner with a rent increased pension; and

(i) disability pension;

(ii) permanent impairment compensation;

(iii) adjusted disability pension.

Note 1: For disability pension see section 5Q.

Note 2: For adjusted disability pension and permanent impairment compensation see point SCH6-C16.

Rate of rent assistance

SCH6-C8(1) The rate of rent assistance is whichever is the lesser of rate A and rate B applicable to the person in accordance with Table C-2.

Table C-2--Rate of rent assistance
Column 1 Item	Column 2 Person's family situation	Column 3 Rate A $	Column 4 Rate B $
1.	Not a member of a couple		1,939.60
	A member of an illness separated couple
	A member of a respite care couple
	Partnered--partner without a rent increased pension
2.	Partnered--partner with a rent increased pension		915.20

Note 1: For member of a couple and partnered see section 5E.

Note 2: For partner with a rent increased pension see point C5.

Note 3: The column 4 amounts are indexed 6 monthly in line with CPI increases (see sections 59B to 59E).

(2) In Table C-2:

"AR" means annual rent as provided by points SCH6-C9 to SCH6-C11.

"RTR" means the rent threshold rate applicable under column 3 of Table C-1 in point SCH6-C6.

Annual rent

SCH6-C9 Annual rent is the annual rent paid or payable by the person whose service pension rate or income support supplement rate is being calculated.

Rent paid by a member of a couple

SCH6-C10 If a person is a member of a couple and the person's partner is living with the person in their home, any rent that the person's partner pays or is liable to pay in respect of the home is to be treated as paid or payable by the person.

Note: For member of a couple see section 5E.

Rent paid by a member of an illness separated or respite care couple

SCH6-C11 If a person is a member of an illness separated couple or a respite care couple, any rent that the person's partner pays or is liable to pay in respect of the premises occupied by the person is to be treated as paid or payable by the person.

Note: For illness separated couple and respite care couple see subsections 5R(5) and (6).

Application

SCH6-C12 Points SCH6-C13 and SCH6-C14 apply only to a person who is in receipt of a service pension. If such a person or the partner of such a person receives either or both a disability pension and permanent impairment compensation, the amount of rent assistance worked out under Table C-2 may be reduced under point SCH6-C13.

Note 1: For disability pension see section 5Q.

Note 2: For permanent impairment compensation see point SCH6-C16.

Effect of disability pension and permanent impairment compensation on rate of rent assistance

SCH6-C13 This is how to work out the effect of a person's disability pension and permanent impairment compensation on the person's rate of rent assistance:

Method statement

Step 1. Work out the annual rate of the person's disability pension and permanent impairment compensation: the result is the person's disability income .

Note 1: For disability pension see section 5Q.

Note 1A: For permanent impairment compensation see point SCH6-C16.

Note 2: For the treatment of the amount of disability pension and permanent impairment compensation of members of a couple see point SCH6-C14.

Step 2. Work out the person's rent assistance free area (see point SCH6-C15 below).

Step 3. Work out whether the person's disability income exceeds the person's rent assistance free area.

Step 4. If the person's disability income does not exceed the person's rent assistance free area, the person's rate of rent assistance worked out under Table C-2 is not affected.

Step 5. If the person's disability income exceeds the person's rent assistance free area, take the person's rent assistance free area away from the person's disability income: the result is the person's disability income excess .

Step 6. Multiply the person's disability income excess by 0.4: the result is the rent assistance reduction amount .

Step 7. Take the person's rent assistance reduction amount away from the rate of rent assistance worked out under Table C-2: the result is the person's rate of rent assistance .

Disability income

SCH6-C14 If a person is a member of a couple, the person's disability income for the purposes of this Module is worked out as follows:

(a) if each member of the couple receives either or both a disability pension and permanent impairment compensation--by adding the couple's annual rates of disability pension and permanent impairment compensation and dividing the result by 2;

(b) if only one member of the couple receives either or both a disability pension and permanent impairment compensation:

(i) where the member receives both a disability pension and permanent impairment compensation--by adding the member's annual rates of disability pension and permanent impairment compensation and dividing the result by 2; or

(ii) where subparagraph (i) does not apply--by dividing the member's annual rate of disability pension or permanent impairment compensation by 2.

Note 1: For disability pension see section 5Q.

Note 2: For permanent impairment compensation see point SCH6-C16.

Application

SCH6-C14A Points SCH6-C14B and SCH6-C14C apply only to a person who is in receipt of an income support supplement. If such a person, or the partner of such a person, receives adjusted disability pension, the amount of rent assistance worked out under Table C-2 may be reduced under point SCH6-C14B.

Note: For adjusted disability pension see point SCH6-C16.

Effect of adjusted disability pension on rate of rent assistance

SCH6-C14B This is how to work out the effect of a person's adjusted disability pension on the person's rate of rent assistance:

Method statement

Step 1. Work out the annual rate of the person's adjusted disability pension: the result is the person's disability income .

Note 1: For adjusted disability pension see point SCH6-C16.

Note 2: For the treatment of the amount of adjusted disability pension of members of a couple see point SCH6-C14C.

Step 2. Work out the person's rent assistance free area (see point SCH6-C15 below).

Step 3. Work out whether the person's disability income exceeds the person's rent assistance free area.

Step 4. If the person's disability income does not exceed the person's rent assistance free area, the person's rate of rent assistance worked out under Table C-2 is not affected.

Step 6. Multiply the person's disability income excess by 0.5: the result is the rent assistance reduction amount .

Step 7. Take the person's rent assistance reduction amount away from the rate of rent assistance worked out under Table C-2: the result is the person's rate of rent assistance .

Disability income

SCH6-C14C If a person is a member of a couple, the person's disability income for the purposes of SCH6-C14B is worked out as follows:

(a) if each member of the couple receives adjusted disability pension--by adding the couple's annual rates of adjusted disability pension and dividing the result by 2;

(b) if only one member of the couple receives adjusted disability pension--by dividing the member's annual rate of adjusted disability pension by 2.

Note: For adjusted disability pension see point SCH6-C16.

How to calculate a person's rent free area

SCH6-C15 A person's rent assistance free area is worked out using Table C-3. Work out which family situation in Table C-3 applies to the person.

Table C-3--Rent assistance free area
Column 1 Item	Column 2 Category of person	Column 3 Free area per year $	Column 4 Free area per fortnight $
1.	Not a member of a couple	2,548	98
2.	Partnered	2,236	86

Note 1: For member of a couple and partnered see section 5E.

Note 2: Item 2 of Table C-3 applies to members of illness separated and respite care couples.

Note 3: The free areas are adjusted annually (see section 59GA).

Rent assistance examples

Note: The following examples are based on the amounts and rates set out in this Module at the commencement of this Schedule (see clause 5 of Part 1 of this Schedule).

Example 1:

Facts: Ross is a single service pensioner without children. Ross does not receive any disability pension and pays $120 per week rent.

Result: Item 1 in Table C-2 applies to Ross.

Rate A for Ross is $3,287.70 calculated as follows:

Rate B for Ross is $1,939.60.

As the maximum rate of rent assistance is the lesser of Rates A and B, Ross's rate of rent assistance is 1,939.60 per year. Ross will receive $74.60 per fortnight.

Example 2:

Facts: Ted and Pam are members of a pensioner couple without children. They rent a house for $160 per week. Ted receives 100% disability pension ($6,255.60 per year). Pam receives the wife's component of disability pension ($210.60 per year).

Result: Item 2 in Table C-2 applies to Ted and Pam.

Rate A for Ted is $2,553.50 calculated as follows:

Rate B for Ted is $915.20.

As the lesser rate is $915.20, this is the maximum rent assistance that Ted can receive. However, as both Ted and Pam receive disability pension, the Rent Assistance Income Test in point SCH6-C13 applies.

Ted's disability pension income is:

Item 2 of Table C-3 applies. Ted's disability pension income excess is the disability pension income less the rent assistance free area:

The reduction in rent assistance is:

The rent assistance Ted will receive per year is Rate B less amount of rent reduction:

Ted will receive $16.03 per fortnight.

The same calculation applies to Pam's rate of rent assistance.

SCH6-C16 In this Module:

"adjusted disability pension" has the same meaning as in section 118NA.

"permanent impairment compensation" means:

(a) any payment of a weekly amount under section 68, 71 or 75 of the MRCA (permanent impairment); and

(b) if the person was paid a lump sum under section 68, 71 or 75 of the MRCA (permanent impairment)--any weekly amounts that the person would have been paid if the person had not chosen the lump sum.

Module E -- Ordinary/adjusted income test

Definition

SCH6-E1 In this Module:

"ordinary/adjusted income" means:

(a) for the purpose of the calculation of the rate of service pension--ordinary income; or

(b) for the purpose of the calculation of the rate of income support supplement--adjusted income.

Note: For ordinary income and adjusted income see section 5H.

Effect of income on maximum payment rate

SCH6-E2 This is how to work out the effect of a person's ordinary/adjusted income on the person's maximum payment rate:

Method statement

Step 1. Work out the annual rate of the person's ordinary/adjusted income.

Note: For the treatment of the ordinary/adjusted income of members of a couple see point SCH6-E3.

Step 2. Work out the person's ordinary/adjusted income free area (see point SCH6-E6 below).

Note: A person's ordinary/adjusted income free area is the maximum amount of ordinary/adjusted income the person can have without affecting the person's pension rate.

Step 3. Work out whether the person's ordinary/adjusted income exceeds the person's ordinary/adjusted income free area.

Step 4. If the person's ordinary/adjusted income does not exceed the person's ordinary/adjusted income free area, the person's ordinary/adjusted income excess is nil.

Step 5. If the person's ordinary/adjusted income exceeds the person's ordinary/adjusted income free area, the person's ordinary/adjusted income excess is the person's ordinary/adjusted income less the person's ordinary/adjusted income free area.

Step 6. Use the person's ordinary/adjusted income excess to work out the person's reduction for ordinary/adjusted income using point SCH6-E11 below.

Note 1: See the Method statements in point SCH6-A1 for the significance of the person's reduction for ordinary/adjusted income.

Note 2: The application of the ordinary/adjusted income test is affected by provisions about the following:

(a) the general concept of ordinary income (sections 46 and 46A);

(aa) the work bonus (section 46AA);

(b) business income (sections 46B and 46C);

(d) income from income streams (sections 46Q to 46YA);

(e) disposal of income (sections 48- 48E).

Ordinary/adjusted incomes of members of couples

SCH6-E3 If a person is a member of a couple, add the annual rates of the couple's ordinary/adjusted incomes and divide by 2 to work out the amount of the person's ordinary/adjusted income for the purposes of this Module. However, in making this calculation disregard any amount that is taken (whether for the purposes of this Act or of the Social Security Act) to be ordinary income of either partner because of section 59TA of this Act or section 1174 of the Social Security Act.

Additional ordinary income because of excess compensation payments

SCH6-E3A Add to the amount derived for a person under point SCH6-E3 any amount that is taken (whether for the purposes of this Act or of the Social Security Act) to be ordinary income of the person because of section 59TA of this Act or section 1174 of the Social Security Act.

Payment of arrears of periodic compensation payments

SCH6-E4 If:

(a) at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving a compensation affected pension; and

(b) in relation to the entitlement, the person receives a payment (an arrears payment ) of arrears of periodic compensation;

the person is taken to receive on each day in the periodic payments period an amount calculated by dividing the amount of the arrears payment by the number of days in the periodic payments period.

Note: For event that gives rise to an entitlement to compensation , compensation affected pension and periodic payments period see section 5NB.

Ordinary/adjusted income free area

SCH6-E5 A person's ordinary/adjusted income free area is the amount of ordinary/adjusted income the person can have without any deduction being made from the person's maximum payment rate.

How to calculate a person's ordinary/adjusted income free area

SCH6-E6 A person's ordinary/adjusted income free area is worked out using Table E-1. Work out which family situation in Table E-1 applies to the person. The ordinary/adjusted income free area is the corresponding amount in column 3.

Table E-1--Ordinary/adjusted income free area
Column 1 Item	Column 2 Category of person	Column 3 Basic income free area per year $	Column 4 Basic income free area per fortnight $
1.	Not member of a couple	2,548	98
2.	Partnered (partner getting neither pension nor benefit) Partnered (partner getting benefit)	2,236	86
3.	Partnered (partner getting pension)	2,236	86

Note 1: For member of a couple , partnered (partner getting neither pension nor benefit) , partnered (partner getting benefit) and partnered (partner getting pension) see section 5E.

Note 3: Items 2 and 3 of Table E-1 apply to members of illness separated and respite care couples.

Note 4: The basic free area is indexed annually in line with CPI increases (see sections 59B to 59E).

Pension reduction for ordinary/adjusted income in excess of ordinary/adjusted income free area

SCH6-E11 (1) A person's reduction for ordinary/adjusted income is:

(2) In this point:

"ordinary/adjusted income excess" , in relation to a person, means the person's ordinary/adjusted income less the person's ordinary/adjusted income free area.

Module F -- Assets test

Effect of assets on maximum payment rate

SCH6-F1 This is how to work out the effect of a person's assets on the person's maximum payment rate:

Method statement

Step 1. Work out the value of the person's assets.

Note 1: For the treatment of the assets of members of a couple see point SCH6-F2.

Note 2: For the assets that are to be disregarded in valuing a person's assets see section 52.

Note 3: For the valuation of an asset that is subject to a charge or encumbrance see sections 52C and 52CA.

Step 2. Work out the person's assets value limit (see point SCH6-F3 below).

Note: A person's assets value limit is the maximum value of assets the person can have without affecting the person's pension rate.

Step 3. Work out whether the value of the person's assets exceeds the person's assets value limit.

Step 4. If the value of the person's assets does not exceed the person's assets value limit, the person's assets excess is nil.

Step 5. If the value of the person's assets exceeds the person's assets value limit, the person's assets excess is the value of the person's assets less the person's assets value limit.

Step 6. Use the person's assets excess to work out the person's reduction for assets using point SCH6-F4 below.

Note 1: See the Method statements in point SCH6-A1 for the significance of the person's reduction for assets.

Note 2: The application of the assets test is affected by provisions about the following:

(a) disposal of assets (sections 52E - 52JE);

(b) special residences (sections 52KA - 52X);

(d) the pensions loans scheme (sections
52ZAAA - 52ZM.

Value of assets of members of couples

SCH6-F2 For the purposes of this Module:

(a) the value of the assets of a member of a couple is taken to be 50% of the sum of:

(i) the value of the person's assets; and

(ii) the value of the person's partner's assets; and

(b) the value of the assets of a particular kind of a member of a couple is taken to be 50% of the sum of:

(i) the value of the person's assets of that kind; and

(ii) the value of the person's partner's assets of that kind.

Assets value limit

SCH6-F3 A person's assets value limit is worked out using Table F-1. Work out the person's family situation and property ownership situation. The assets value limit is the corresponding amount in column 3.

Table F-1--Assets value limit
Column 1	Column 2	Column 3 Assets value limit
Item	Person's family situation	Column 3A Either person or partner property owner $	Column 3B Neither person nor partner property owner $
1.	Not member of a couple	124,000	212,500
2.	Partnered	88,000	132,250

Note 1: For member of a couple and partnered see section 5E.

Note 2: For property owner see section 5L.

Note 3: Item 2 applies to members of illness separated and respite care couples.

Note 4: The assets value limit in column 3B of item 1 is adjusted annually in line with CPI increases (see section 59H). The other assets value limits are indexed annually in line with CPI increases (see sections 59B to 59E).

Pension reduction for assets in excess of assets value limit

SCH6-F4(1) A person's reduction for assets is worked out by using the formula:

where:

"assets excess" means the value of the person's assets less the person's assets value limit.

(2) In calculating a person's assets excess under subpoint (1), disregard any part of the excess that is not a multiple of $250.

Module G -- Remote area allowance

Remote area allowance

SCH6-G1 An amount by way of remote area allowance is to be included in a person's rate of pension if:

(a) one of the following subparagraphs applies:

(i) the person's rate of pension apart from this point is greater than nil; or

(ii) the person's rate of pension apart from this point is nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of the Social Security Act; or

(iii) the person's rate of pension apart from this point is nil merely because of the operation of Part IVA; and

(b) the person's usual place of residence is situated in the remote area; and

Note: For remote area and physically present in the remote area see section 5Q.

Rate of remote area allowance

SCH6-G2 The rate of remote area allowance payable to a person is worked out using Table G. Work out which family situation in the table applies to the person. The rate of remote area allowance is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each FTB child, and each regular care child, of the person.

Table G--Remote area allowance
Column 1 Item	Column 2 Person's family situation	Column 3 Basic allowance per year $	Column 4 Basic allowance per fortnight $	Column 5 Additional allowance per year $	Column 6 Additional allowance per fortnight $
1.	Not member of a couple	473.20	18.20	189.80	7.30
	A member of an illness separated couple
	A member of a respite care couple
	Partnered--partner not receiving remote area allowance
2.	Partnered (partner receiving remote area allowance)	405.60	15.60	189.80	7.30

Note 1: For FTB child and regular care child see subsection 5F(1).

Note 2: For member of a couple and partnered see section 5E.

Note 3: For illness separated couple and respite care couple see subsections 5R(5) and (5A).

Eligibility of FTB children and regular care children who are outside Australia

SCH6-G3(1) If an FTB child, or a regular care child, leaves Australia otherwise than temporarily, additional allowance is not payable for the child on or after the day on which he or she left Australia.

(2) If an FTB child, or a regular care child, is temporarily absent from Australia for more than 8 weeks, additional allowance is not payable for the child after the first 8 weeks of the absence.

Special rule where partner has an FTB or regular care child but is not receiving a pension, benefit or allowance

SCH6-G4 If:

(a) a person who is a member of a couple is qualified for an amount by way of remote area allowance; and

(b) the person's partner is not receiving a service pension, an income support supplement, a social security pension, or a social security benefit; and

the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.

Special rule where partner has an FTB or regular care child but is not receiving additional allowance for the child

SCH6-G5 If:

(a) a person who is a member of a couple is qualified for an amount by way of remote area allowance; and

(b) the person's partner has an FTB child or a regular care child; and

the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.

Special rule dealing with the death of an FTB or regular care child

SCH6-G6 If an FTB child, or a regular care child, of a person dies, this Module has effect, for a period of 14 weeks after the death of the child, as if the child had not died.

Note: This point does not prevent this Module having the effect it would have had if the child would otherwise have ceased to be an FTB child, or a regular care child, during that 14 weeks.

Commonwealth Consolidated Acts

VETERANS' ENTITLEMENTS ACT 1986 - SCHEDULE 6