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3.15.3 LIS & LIFS - Qualification & Payability

Qualification

A person's qualification for LIS and LIFS is based on their circumstances at the time of claim and on their circumstances in the previous financial year, known as the income year. To qualify for the LIS or the LIFS a person must meet the criteria listed in the following table. Where more detail about a criterion is required, the second column indicates where you will find this.

 

Note: The LIFS is an administrative name for the LIS as it applies to FTB recipients. The SSAct refers to the payment as 'low income supplement'.

 

A person must meet all of the following:

Criterion LIS

Criterion LIFS

 

More Detail

To meet the income requirement.

Be a person whose qualifying income for the income year (1.1.I.92) is less than the following income thresholds:

- $30,000 if single with no dependent children at the time of claim,

- $45,000 combined if partnered with no dependent children at the time of claim.

- $60,000 if single with a dependent child at the time of claim,

- $60,000 combined if partnered with dependent child at the time of claim.

As for LIS.

See below for meaning of qualifying income

To meet the excluded payment requirement.

Be a person who:

- did not receive any clean energy payments in respect of at least 92 days in the income year,

AND either:

- did not have an FTB child for at least 13 weeks in the income year, or

- was determined by the Secretary under FA(Admin)Act paragraph 19(b) as not entitled to be paid FTB for at least 13 weeks in the income year, and that determination was not because the person's partner was receiving FTB,

AND

- did not receive any of the excluded payments for at least 13 weeks in the income year.

To meet the excluded payment requirement.

Be a person who:

- did not receive any clean energy payments in respect of at least 92 days in the income year,

  • - Note: Relevant clean energy payments for the LIFS does not include a CEA (within the meaning of the FAAct) or FTB to the extent that the amount of FTB worked out under FAAct Schedule 1 includes either or both an amount of CES (Part A) or CES (Part B).

AND

- had an FTB child for at least 39 weeks in the income year, AND

- did not receive any of the excluded payments for at least 13 weeks in the income year.

See below for the list of clean energy payments.

 

See below for the list of excluded payments.

To meet the tax requirement for claims made in 2012-13.

Be a person who owes less than $300 in income tax for the 2011-12 income year, as worked out under subsection 4-10(3) of the Income Tax Assessment Act 1997 by reference to the person's accepted taxable income.

 

To meet the tax requirement for claims made after 2012-13.

Be a person whose accepted taxable income for the income year is:

- less than $18,000, or

- $18,000 or more, but less than the person's LIS threshold amount for the income year.

To meet the tax requirement for claims made in 2012-13 both the claimant and their partner (if applicable) is:

- a person who owes less than $300 in income tax for the 2011-12 income year, as worked out under Income Tax Assessment Act 1997 subsection 4-10(3) by reference to the person's accepted taxable income.

 

To meet the tax requirement for claims made after 2012-13 both the claimant and their partner (if applicable) is:

- a person whose accepted taxable income for the income year is:

  • - less than $18,000, or
  • - $18,000 or more, but less than the person's LIS threshold amount for the income year.

See below for details of LIS threshold amount.

To meet the remaining requirements the claimant must:

- be a person who was at all times during the year an Australian resident or SCV holder residing in Australia, AND

- have been in Australia for at least 39 weeks of the income year, AND

- not have been subject to a NARWP at any time during the income year, AND

- not have been a dependent child of another person for more than 25 weeks of the income year, AND

- not have been in gaol and/or psychiatric institutions for more than 25 weeks of the income year, AND

- no person was eligible for FTB in respect of the claimant for more than 25 weeks of the income year.

As for the LIS.

See below for details of residence requirements, NARWP and definitions of dependent child and FTB child.

 

A person is not qualified for the LIFS if:

  • they received the LIS,

OR

  • they are a member of a couple, AND
  • the person's partner received a LIS,

OR

  • they are a member of a couple, AND
  • the person's partner has made a claim for the LIS, AND
  • the person's partner is qualified for the LIS,

OR

  • they are a member of a couple, AND
  • the person's partner has made a claim for the LIFS, AND
  • the Secretary determines that the person's partner is to receive the LIFS for the income year.

 

Act reference: SSAct section 916B Qualification for low income supplement

 

Income requirement

The income threshold that will apply to a claimant is subject to their partner status at the time of claim and whether or not they have a dependent child at the time of claim. For example, if at the time of claiming LIS, you are single with a dependent child, the income threshold that would apply to you is $60,000, irrespective of whether you had a dependent child or partner in the income year.

 

A person's qualifying income must be less than the income threshold applicable to their circumstances.

 

Qualifying income means:

  • for a person who is single at the time of claiming LIS, the person's accepted ATI for the income year, and
  • if the person is partnered at the time of claiming LIS, the sum of the person's accepted ATI and their partner's accepted ATI for the income year.

 

Act reference: SSAct section 916C The income requirement, section 916C(4) Accepted adjusted taxable income

Income Tax Assessment Act 1997

Policy reference: SS Guide 1.1.A.63 Adjusted taxable income (LIS)

 

Excluded payment requirement

The excluded payment requirement identifies whether a claimant has received some government assistance, either through one of the other clean energy payments or through other government payments.

 

For the purpose of LIS and LIFS, the relevant clean energy payments include:

  • a clean energy payment (other than LIS and EMEP),
  • a CEA (within the meaning of the FAAct),
  • FTB to the extent that the amount of the FTB worked out under FAAct Schedule 1 includes either or both an amount of CES (Part A) or CES (Part B),
  • single income family supplement (within the meaning of the FAAct),
  • a CEA (within the meaning of the Farm Household Support Act 1992),
  • a clean energy payment (within the meaning of the MRCA),
  • a clean energy payment (within the meaning of the VEA), other than an EMEP (within the meaning of that Act).

 

Note: For meeting the excluded payment requirement for the LIFS, relevant clean energy payments does not include a CEA (within the meaning of the FAAct) or FTB to the extent that the amount of the FTB worked out under FAAct Schedule 1 includes either or both an amount of CES (Part A) or CES (Part B).

 

Excluded payments include:

  • a social security pension (other than a sole parent pension or SpNP),
  • a social security benefit,
  • seniors supplement under either the SSAct or the VEA,
  • a payment under the ABSTUDY Scheme that included an amount identified as living allowance,
  • a payment under Part 5 or 6 of the Farm Household Support Act 1992,
  • a pension under Part II, III or IV of the VEA (other than a pension that is payable at the rate specified in subsection 30(2) of that Act),
  • compensation under Chapter 4 Part 2, or Chapter 5 Part 2 Division 2 of the MRCA,
  • a special rate disability pension (within the meaning of section 198 of the MRCA,
  • a payment under the MRCA Education and Training Scheme worked out by reference to the MBR of YA,
  • a payment under the VCES worked out by reference to the MBR of YA.

 

Act reference: SSAct section 916D The excluded payment requirement, Part 2.25B Seniors Supplement

FAAct section 19(b) ...carer's allowance under the Social Security Act 1991, section 26 Only 1 member of a couple eligible for family tax benefit

Veterans' Entitlement Act 1986 Part VIIAD Seniors Supplement, Part II, III and IV, section 30(2)

ABSTUDY Policy Manual

Farm Household Support Act 1992 Part 5 and Part 6

Military Rehabilitation and Compensation Act 2004 Chapter 4 Part 2, Chapter 5 Part 2 Division 2 section 198

Military Rehabilitation and Compensation Act Education and Training Scheme 2004

Veterans' Children Education Scheme

Policy reference: FA Guide 1.1.N.31 Non-entitlement to FTB due to 3 or more non-lodger decisions, 6.4.3.70 Non-entitlement to FTB Based on an Estimate Due to 3 or More Non-Lodger Decisions

 

Tax requirement

In order to claim the LIFS both the claimant and their partner (if applicable) must meet the tax requirement. For the LIS only the claimant needs to meet the tax requirement.

 

Qualification under the tax requirement for claims made in 2012-13 is based on an assessment of whether a person had a tax liability (that is, tax paid excluding the Medicare levy, Medicare levy surcharge and the one-year flood and cyclone reconstruction levy) in the 2011-12 income year of less than $300.

 

A claimant's tax liability for assessment in 2012-13 is easily identifiable on the claimant's 2011-12 TNA.

 

Claimant's with taxable income below the tax-free threshold are not required to produce a TNA in order to claim the LIS or LIFS.

 

Due to the tax reforms taking effect from 2012-13, qualification under the tax requirement for claims made in 2013-14 and subsequent years will involve a notional assessment of how the person's tax liability compares to that from the tax system in 2011-12.

 

From 2013-14, a person will meet the tax requirement if their accepted taxable income for the income year (the previous financial year) is less than $18,000 or below the LIS threshold.

 

A person's LIS threshold amount for the income year is worked out as follows:

Divide the amount of the person's eligible tax offsets for the income year by 0.15, then add $18,000.

 

A person's eligible tax offsets for the income year are any tax offsets that are applied to the person's income tax assessment, but disregarding any rebate applied under section 159N of the Income Tax Assessment Act 1936 (section 159N Rebate for certain low income taxpayers).

 

A tax offset has the same meaning as the Income Tax Assessment Act 1997.

 

Remaining requirements

To meet the LIS or LIFS residence requirements a person must be residing in Australia as an Australian resident or SCV holder (within the meaning under social security law). They must also have been physically in Australia for at least 46 weeks of the income year.

 

LIS or LIFS does not have a NARWP. However, if a person claims LIS or LIFS and they were subject to a NARWP at any time during the income year, they are not qualified to receive LIS or LIFS.

 

For the purposes of LIS or LIFS, a dependent child has the same meaning as applied under social security law.

 

For the purposes of LIS or LIFS, an FTB child has the same meaning as applied under family assistance law.

 

Act reference: SSAct section 7(2) Australian residence definitions, section 916F The remaining requirements

Policy reference: SS Guide 3.1.1.10 Residence Requirements, 1.1.N.70 Newly arrived resident's waiting period (NARWP), 1.1.D.70 Dependent child

FA Guide 2.1.1 FTB Child & Regular Care Child

 

Claims

LIS and LIFS are annual lump sum payments and are paid once in a financial year. A person must make a claim for the LIS and LIFS each year. A person's claim in the current financial year is generally based upon the person's circumstances in the previous financial year, known as the income year. For the income year, a person must satisfy the requirements listed in the above table (income, excluded payments, tax and other requirements). Additionally, a person at the time of lodging a claim for LIS or LIFS must:

  • be in Australia,
  • be an Australian resident or a SCV holder residing in Australia,
  • not be subject to a NARWP, and
  • not be in gaol or a psychiatric institution.

 

Claims for multiple income years cannot be combined. A claim should generally be made within 12 months of the income year unless there are special circumstances that can justify making a late claim.

 

A person cannot receive more than one LIS or LIFS for an income year.

 

While the LIS and LIFS are social security payments, a person is not taken to be receiving a social security payment, or to be a recipient of a social security payment merely because they receive LIS or LIFS.

 

Act reference: SSAct section 916G Availability of supplement, section 916H Non-receipt of social security payment

SS(Admin)Act section 16(3A) A claim by a person for low income supplement..., section 27C Time limit for claim, section 47(1)-'lump sum benefit' (see (l))

 

Debts

If a person has received a LIS or a LIFS and it is subsequently found that the LIS or LIFS was paid because the person knowingly made a false or misleading statement or knowingly provided false information, the LIS payment will be a debt due to the Commonwealth.

 

No other debt provisions apply to the LIS or LIFS, apart from SSAct section 1224AA.

 

Act reference: SSAct section 1224A Debts relating to low income supplements or essential medical equipment payments

 

Payability

LIS and LIFS are payable as a single lump sum. It will generally be paid as soon as is reasonably practicable after the person is qualified for the payment.

 

Taxation

Clean energy payments paid under the SSAct, including LIS and LIFS, are exempt from income tax.

 

Exempt income

LIS and LIFS are not to be treated as income for the purposes of the SSAct.

 

Act reference: SSAct section 916H Non-receipt of social security payment

 

Compensation

LIS and LIFS are not CAPs.

_______________________________________________________

Last reviewed: 2 January 2014


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Last Edited: 27/02/2014 11:38:55 AM


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