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This topic describes the ordinary income (1.1.O.30) and assets tests and limits for PPS. The income and assets tests for PPP are described in a separate topic, 4.2.4.20.
This topic covers the following matters:
The following table shows the 4 steps involved in applying the ordinary income test for PPS.
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Step |
Action |
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1 |
Determine the person's ordinary income for the fortnight. |
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2 |
Determine the person's ordinary income free area limit. |
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3 |
Does the person's ordinary income exceed their ordinary income free area? - If NO, the ordinary income excess in NIL. - If YES, the difference is the ORDINARY INCOME EXCESS. |
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4 |
Determine 40% of the ordinary income excess. RESULT: THE REDUCTION FOR ORDINARY INCOME. |
Information on current income free areas and income limits for PPS can be obtained from the Income and assets tests for PP page on the DHS website.
These limits are indexed from 1 July each year.
Income over the income free area limit reduces the payment received by 40 cents in the dollar until the payment is reduced to nil.
Act reference: SSAct section 1068A-E1 Effect of income on maximum payment rate
Policy reference: SS Guide 4.2.1.10 Pensions Income Test & Limits, 4.2.1.20 Additional Free Area for Dependent Children, 4.2.2 Benefits Income Test & Limits, 4.3.1.40 Determining the Rate of Income for PP, 5.5.4 Samples of PP Rate Calculations
Compensation such as weekly worker's compensation payments, are assessed under a separate income test. Lump sum compensation payments are also subject to special rules.
Act reference: SSAct section 17 Compensation recovery definitions, Part 3.14 Compensation recovery
Policy reference: SS Guide 3.1.9.10 Compensation & Payability, 4.13 Compensation, 6.4 Compensation Recovery
An IMP applies to leave and redundancy payments received from employment, in the same way as the benefits income test.
Policy reference: SS Guide 4.3.4 Income Maintenance Period
PPS is subject to the same assets test as benefits such as PPP. The limits used in the benefits assets test are the same as those for a full pension in the pensions assets test. PPS is NOT payable if a recipient's assets exceed those limits.
Act reference: SSAct section 500Q(2) Assets test-payment not payable if assets value limit exceeded
Policy reference: SS Guide 4.2.3 Pensions & Benefits Assets Tests & Limits
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Last reviewed: 20 March 2013
