Chapter 120 Current Income Concessions

This chapter explains income concessions.

Chapter content

This chapter contains the following topics:

Period of current income assessment

Circumstances justifying Current Income Assessment

Drop in Income

Reasons not accepted for Current Income Assessment

Calculating Adjusted Income

120.1 Period of current income assessment

Current income assessment is a concession that allows the ABSTUDY income test to be applied to the student's parents/ guardians income in the year for which assistance is sought (instead of being applied to income earned in the previous, typical financial year).

If the drop occurs before 1 January of the year for which assistance is sought, the entitlement for the whole of the year of study will be assessed on a current income basis.

If the drop occurs after 1 January and before 1 July of the year for which assistance is sought, current income assessment will apply only in assessing the allowance payable for that part of the year of study following the date of the drop. Normal assessment will apply up to that date.

There is no provision for the parental income test to be applied to any period later than the financial year accounting period ending 30 June in the year of study for a current income assessment.

120.2 Circumstances justifying Current Income Assessment

Current income assessment may be approved if a normal assessment is unreasonable because of circumstance where a large and long-lasting drop in income has occurred. Approval can be given to any student in this situation except:

• a single, independent status student, or
• a student who is partnered.

In most instances, when current income assessment is approved, the income test will be applied to estimated income figures, which are subject to verification.

120.2.1 All students

The circumstances under which assessment may be made on current income for all students are:

• permanent invalidity, retirement or any similar circumstance which removes or reduces the earning capacity of a student's parent, or
• drought, bushfire, flood, cyclone or other circumstances beyond the control of a parent and:

• a situation of hardship is caused to the person
• the income is expected to be adversely affected for a period of two years from the date of the drop, or 1 January in the year of study, whichever is the later, and
• it would be unreasonable to assess the student using routine financial assessment.

120.2.2 Additional situations for dependent students

In addition, assessment may be made on current income for dependent status students where:

• a parent dies
• the parents separate, or
• the student moves from one parent's care to the other parent's care and it would be unreasonable to assess the student using routine financial assessment.

120.2.2.1 Current income assessment not needed

If, in the case of a dependent student, a parent dies before 1 January in the year for which assistance is sought, or if the parents are separated at that date, there is no need for current income assessment.

A normal assessment is made on the remaining parent's income. Where the parents reunite, reassessment using both parents' regular incomes is made with effect from the date of the reunion.

120.3 Drop in Income

The Adjusted Family Income for the financial year ending on 30 June in the year for which assistance is sought should have a substantial drop in the normal assessment period.

120.3.1 Concession start date

The drop in income may occur at any time during the two years up to June in the year for which assistance is sought. The current income concession cannot be granted if income drops after that date.

In most cases the date from which income has dropped will be readily established. However, if income is affected by circumstances such as drought, an approximate date will need to be established.

If no precise date is available, the date chosen would be the first of the most relevant month.

120.3.2 Necessary duration of the drop in income

Normally it is expected that the duration of the drop in income should be at least two years taken from the date of drop or 1 January in the year for which assistance is sought, whichever is the later, except in those cases where a student's parents separate or a parent dies.

If a parent dies the concession applies immediately. If a student's parents separate, the concession also applies immediately. If the parents reunite, entitlement is reassessed and based on both parents' income but without retrospective effect.

120.3.3 Lump sum leave payments

If a person retires from employment and receives a lump sum payment of leave entitlements that is to be included as income the date of income should be regarded as the end of the period of leave and not the date of cessation of actual work.

120.4 Reasons not accepted for Current Income Assessment

120.4.1 Seasonal falls in income

Seasonal falls such as occur where income normally fluctuates (as in the case of primary producers) are not a basis for current income assessment.

120.4.2 Short period of unemployment

A short period of unemployment does not warrant current income assessment. If the parent is likely to be unemployed for a long period, or if re-employed, is likely to be receiving a substantially lower income than before, such a case can be considered if the usual criteria of the size and duration of the income reduction are met.

120.5 Calculating Adjusted Income

120.5.1 Dependent students

To calculate the adjusted income of parents for dependent students:

• include the income of any person who is a parent of the student at the start of the eligibility period in the year for which assistance is sought
• if a person, through separation, ceases to act as the student's parent between the start of the eligibility period and 30 June in the year for which assistance is sought, the income test is not applied to her/his whole year's income. The proportion of the current income financial year during which s/he acted as parent is determined and a similar proportion of her/his annual income in that year is used in the income test, and/or
• allow dependent adjustment only for children who at 30 June of the year of study, i.e. the end of the current financial year, were dependent on persons who were the student's parents at the start of the eligibility period in the year of study.

120.5.2 Rise in income

If the income rises above the level expected in the current income financial year, the applicant is required to notify Centrelink.If the rise in income means that the current financial year's income exceeds the original estimate, all assistance must be reassessed and any overpayment is liable to recovery.

120.5.3 Married and independent students

There is no current income concession for partnered or single independent students.