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This topic covers the following matters:
Act reference: SSAct section 1067G-H1 Effect of ordinary income on maximum payment rate (YA), section 1067G-J1 Student income bank (YA), section 1067L-D1 Effect of ordinary income on maximum payment rate (Austudy), section 1067L-E1 Student income bank (Austudy)
The personal income test for full-time students is the same as the ordinary income test for benefits with the following modifications:
The personal income test for full-time students is indexed to the CPI on 1 January each year starting from 1 January 2013.
Act reference: SSAct section 1190 Indexed and adjusted amounts
Policy reference: SS Guide 4.2.2 Benefits Income Test & Limits
Recipients have access to both the income bank and the higher income free area on any fortnight in which they are payable Austudy or YA as a full-time student.
Exception: Recipients 22 to 24 years old, who DO NOT transfer from NSA but intend to begin full-time study (1.1.F.230) or training, DO NOT have access to the higher income free area.
The following table shows when access to the income bank and the higher income free area starts for recipients in different situations.
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A person who is… |
Has access from the… |
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a new YA recipient, |
date their course starts. |
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an existing YA recipient, |
- date of the first fortnight of study or training, OR - date of notification if they fail the notification provisions. |
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a NSA recipient, aged 22 to 24, who starts full-time study or training and transfers to YA, |
- first fortnight of YA qualification, if the course runs for 12 months or more, OR - date of notification, if they fail to claim YA within 14 days of the course starting. |
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aged 25 or more, who starts full-time study, |
date their course began. |
Access to the income bank and higher income free area usually ceases from the end of the fortnight in which the recipient's course ends.
Exceptions: Students who leave a course before the course ends have access to the income bank and the higher income free area until:
The student income bank will be indexed to the CPI on 1 January each year starting from 1 January 2013.
Act reference: SSAct section 1190 Indexed and adjusted amounts
The following rules apply to the student income bank:
Recipients transferring from a YA (full-time student) or Austudy to a payment eligible for working credit may be able to transfer all or part of their student income bank to their working credit balance.
$1 student income bank = 1 working credit
The following table lists all the possible carryover situations.
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Recipient situation |
Carryover |
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A YA (full-time student) or Austudy recipient transfers to a non-student social security pension or benefit that has access to working credit (except YA (job seeker)). |
Unused student income bank becomes a new working credit opening balance, up to a maximum of 1,000 working credits. |
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A YA (full-time student) or Austudy recipient transfers to YA (job seeker). |
Unused student income bank becomes a new working credit opening balance, up to a maximum of 3,500 working credits. |
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A recipient is granted a social security pension or benefit (except YA (job seeker)) that has access to working credit within 12 months of their YA or Austudy being suspended or cancelled. |
Unused student income bank becomes a new working credit opening balance, up to a maximum of 1,000 working credits. |
|
A recipient is granted YA as a job seeker that has access to working credit within 12 months of their YA or Austudy being suspended or cancelled. |
Unused student income bank becomes a new working credit opening balance, up to a maximum of 3,500 working credits. |
Note: The recipient becomes eligible for working credit from the day they start receiving their social security pension or benefit and the carryover amount is available for use from that day.
Recipients transferring from a payment eligible for working credit to YA (full-time student) or Austudy may be able to transfer their working credit balance to their student income bank.
One working credit = $1 student income bank
The following table list all the possible carryover situations.
|
Recipient situation |
Carryover |
|
A recipient transfers from a social security pension or benefit that has access to working credit to YA (full-time student) or Austudy that has access to student income bank. |
Unused working credit becomes new student income bank opening balance. |
|
A recipient ceases a social security pension or benefit that has access to working credit and after a break of no more than 12 months commences YA (full-time student) or Austudy that has access to student income bank. |
Unused working credit becomes new student income bank opening balance. |
Note: These carryover situations also apply to recipients receiving ABSTUDY.
The following table shows how the student income bank operates when a student has ordinary income (1.1.O.30) in a fortnight.
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If the income is… |
Then… |
And… |
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LESS than the income free area, |
subtract the income from the income free area to determine the saved amount, |
add the saved amount to the recipient's income bank credits. |
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EQUAL to the income free area, |
there is no effect on payment, |
there is no effect on the income bank. |
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GREATER than the income free area, but less than or equal to the income bank credit, |
subtract the income free area from the income to determine the reduction for income, |
subtract the reduction for income from BOTH the income bank credit AND the ordinary income. The effect is that there is no ordinary income for the fortnight. |
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greater than BOTH the free area AND the income bank credit, |
subtract the income bank credit from the income to determine the income bank debit, |
reduce the income bank credit to zero. |
Example 1: Cath has been studying full-time for the last 2 years and she gets a job for 12 weeks in the university vacations as a clerk in her uncle's law firm. She has maximum credits in her income bank of $10,100 at the start of her vacation employment. Her fortnightly income from the employment is $800. For each of the 6 fortnights she works, she has enough credits in her income bank to reduce her ordinary income to zero. That means she is paid her usual rate of Austudy. Over the employment period she uses $2,400 income bank credits, leaving a credit balance of $7,700.
Example 2: Rod has a $500 credit in his income bank. He has ordinary income in one fortnight of $1,000 that is reduced by his $500 credit. The remaining $500 of ordinary income is subject to the personal income test, and Rod's rate of YA for that fortnight is reduced by $48.90 (50% of the amount between $405 and $486 ($40.50) and 60% of the amount over $486 ($8.40). Rod has zero credits in his income bank. In the following fortnight Rod has ordinary income of $320, so his rate of YA is not reduced and he accrues $85 in his income bank.
Example 3: Paul is a continuing student. In December he completes year 12 and intends to go to TAFE or university at the start of the next academic year. He is considered to be a full-time student for YA from December to March the next year when his course commences and has access to the higher income free area. He also retains his income bank credits. In April, however, Paul gets Myalgia Encephalitis and is forced to reduce his full-time study-load to part-time. Access to the higher income free area stops at the end of the fortnight in which he notifies the change in his circumstances, providing it is within the notification period, and his income bank credits are cancelled.
Example 4: Nick is unemployed and gets YA (job seeker) and has built up 300 working credits. He has decided to return to full-time study and his status changes to YA (full-time student). His 300 working credits are automatically converted to $300 in his student income bank.
Act reference: SSAct section 1073E Opening balance
Policy reference: SS Guide 3.1.11.50 Working Credit Opening Balances & Carryovers, 3.1.11.20 Working Credit Accrual
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Last reviewed: 2 January 2013
