Chapter 115 Compensation

Chapter content

This chapter contains the following topics:

Payments affecting ABSTUDY entitlements

Living allowance

School Fees Allowance (Group 2)

Payments not affecting ABSTUDY entitlements

115.1 Payments affecting ABSTUDY entitlements

115.1.1 Types of compensation payments

The following compensation payments affect ABSTUDY entitlements:

• periodic personal injury compensation for economic loss, and
• lump sum personal injury compensation for economic loss.

115.1.2 ABSTUDY Allowances

The following ABSTUDY entitlements are affected by compensation payments:

• Living Allowance
• School Fees Allowance (Group 2).

115.2 Living allowance

Living Allowance is affected by taxable compensation payments as follows in 115.2.1 and 115.2.2.

115.2.1 Taxable compensation lump sum payments

Taxable compensation payments which are paid in a lump sum are regarded for ABSTUDY purposes as the assets of the person to whom the compensation payment was made and affect the student in accordance with the personal assets and family assets tests.

Note: Non-taxable compensation payments paid in a lump sum are not regarded as an asset for ABSTUDY purposes.

115.2.2 Ongoing taxable compensation payments

Taxable compensation payments paid on a regular and ongoing basis are treated according to the type of recipient:

• the parent(s)/guardian(s) of the student
• the student, or
• the partner of the student.

115.2.2.1 the parent(s)/guardian(s) of the student:

The compensation payment forms part of the parent(s)/guardian(s) Parental Income for the normal application of the Parental Income test (including Current Income Assessment).

115.2.2.2 the student

The compensation payment forms part of the student's ordinary income for the application of the student's personal income test.

115.2.2.3 the partner of the student

The compensation payment forms part of the partner's ordinary income for the application of the partner income test.

Exception: Where a student has a partner who is in receipt of a FaCS payment where the rate of that payment has been calculated on the basis of the student being in receipt of a compensation payment, the compensation payment should not affect the student's ABSTUDY. Where a student has a partner who is serving a Compensation Preclusion Period and that preclusion period cannot be adjusted to take into account any affect on the student's ABSTUDY payments, the compensation payment should not affect the student's ABSTUDY. That is, ABSTUDY Payments should not be affected where the effect of the compensation payment on ABSTUDY cannot be reflected in the effect of a couple's FaCS entitlements.

115.3 School Fees Allowance (Group 2)

ABSTUDY School Fees Allowance (Group 2) is affected by compensation payments made to the parent(s)/guardian(s) of a dependent student to the extent that a compensation payment forms part of the parent(s)/guardian(s) taxable income in the application of the Parental Income Test.

115.5 Payments not affecting ABSTUDY entitlements

For the purposes of assessing entitlements to ABSTUDY, the following payments, ordinarily considered to be compensatory in nature, are not considered to fall within the definition of compensation given immediately below.

• Compensation payments made for criminal injuries, discrimination or workplace harassment
• Compensation for non-economic loss
• Compensation paid on death, and
• Compensation for war injuries.

Note: Indigenous people who were employed under the former Community Wages Scheme on Queensland settlements and reserves between 1975 and 1986, have been awarded compensation with a one off payment of $7000. For ABSTUDY purposes this payment is not to be included for any ABSTUDY income or means tests. Minister Kemp made this determination on 30 November 1999.