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You are here: ABSTUDY > 6
Income and Rates > 6.3 Current Income and Special Assessment
This chapter explains income concessions.
The current income assessment is a concession that allows the ABSTUDY income test to be applied to the income which the student's parents/ guardians receive in the financial year ending on 30 June in the year for which assistance is sought (instead of being applied to income earned in the previous, typical financial year).
This current income assessment may be approved for any student, except a single, independent status student or a student who is partnered, if a normal assessment is unreasonable because one of the circumstances described in this topic has caused a large and long-lasting drop in income.
In most instances, when current income assessment is approved, the income test will be applied to estimated income figures, which are subject to verification.
There is no provision for the parental income test to be applied to any period later than the 1999/00 financial year accounting period.
The circumstances under which assessment may be made on current income for all students are:
In addition, assessment may be made on current income for dependent status students where:
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
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
drop are met.
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.
While a drop of 25% seems reasonable as a general yardstick, discretion may be exercised if the drop is considerably less than 25%. Clearly, for people on very low incomes, a lesser drop substantially affects their standard of living. Consideration should also be given not only to the size of drop in income, but to whether reassessment on current income would give the student an entitlement to income-tested assistance.
It should be ascertained that the estimate of the size of the drop is reasonable in the light of information available on factors such as previous earnings, the parent's trade or skills and current employment possibilities. In particular, sympathetic consideration should be given to situations where a family has experienced a considerable fall in weekly income but, because the current income assessment period includes a substantial amount of the former, higher income, the actual difference between the incomes for normal and current income years is less than 25%.
John’s family has an income of $30,000 in the typical financial year. On 30 November in the following financial year the family breadwinner retires. The income of John’s family for that year is $15,000 for the period 1 July to 30 November and then $160 a week from pension for the period 1 December to 30 June. Although this does not represent a fall of 25% between the financial years, there has clearly been a drastic fall in family income and current income assessment should be granted.
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.
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 If the parents reunite, reassessment using both parents’ regular incomes is made with effect from the date of the reunion.
In most cases the date from which income has dropped will be readily established. However, if income is affected by circumstances such as drought, it will be necessary to establish an approximate date based on such considerations as:
If no precise date is available, the date chosen would be the first of the most relevant month.
If a person retires from employment and receives a lump sum payment of leave entitlements which 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.
Mary’s mother retires from work for health reasons on 31 October in the year prior to the year of study and received a lump sum payment of $4,000, representing four weeks' sick leave and six weeks' recreation leave. The date of the fall in income is to be taken as 12 January, not 31 October. The income involved is regarded as accruing on the day on which it is received.
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 student's parents separate, the concession applies immediately. If the parents reunite, entitlement is reassessed and based on both parents' income but without retrospective effect.
If the drop occurred 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 occurred 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.
To calculate the adjusted income of parents for dependent students:
If the income rises above the level expected in the current income financial year, the applicant is required to notify Centrelink. (see Policy Manual 6.3.2.1)
If the rise in income means that the current financial year's income exceeds the income test cut-off point, all assistance paid under the current income concession is considered to be overpaid and is liable to recovery.
Note: Reverse Current income does not apply to an independent student with a partner because of the fortnightly Partner Income Test.
There is no current income concession for partnered or single independent students.
Applicants for current income assessment should be clearly warned at the outset of the possibility of overpayments resulting from underestimates of income They should be advised to make allowance in their estimates for likely increases in wages, pensions, etc during the course of the year.
Where there has been an increase in income by 25% since the previous financial year, current year income will be taken into account to reassess entitlement from 1 October to 31 December.
There is no provision for the parental income test to be applied to any period later than the 1999/2000 financial year accounting period.
Jane is studying in second semester 2001 only. ABSTUDY will commence from 1 July 2001. Even though she is not getting ABSTUDY until after the 2000/2001 financial year has ended, there is no provision for income after 30 June 2001 to be taken into account.
If the income increases, ABSTUDY entitlement is based on Adjusted Family Income (AFI) in the financial year ending during the year of study (that is, on assessable income in the 2000/01 financial year for assistance in 2001).
Reverse current income applies where there has been a substantial increase in parental taxable, overseas or other income.
In 2001, reverse current income is applied from 1 October in the year of study when income earned in the 2000/01 financial year has increased by 25% or more since the 1999/00 financial year.
The parental income test under Section 18 of the Income Tax Assessment Act, adopted a 12 month accounting period which ends on a date other than 30 June.
This does not alter income test period principles. In particular:
To be eligible for a special assessment the student's parent(s)/spouse must be in receipt of one of the following payments:
If a student’s parent receives ABSTUDY living allowance or YA/Austudy payment, the parental income test is waived where:
Note: Special assessment cannot be applied solely on the basis of a parent or partner receiving Basic Parenting Payment or Family Payments.
A special assessment applies when one or both of the student’s parents has a current low income Health Care Card. This does not apply where a parent has a card only because the child disability allowance is received.
Special assessment applies for the valid period of issue of the Card and must be reviewed at the end of this period for ABSTUDY to continue. Proof that a parent holds a current low income Health Care Card is required (see Policy Manual - 2.1.4.4.2). There is no eligibility for special assessment if a Card is cancelled and is, therefore, no longer valid.
Special assessment must be reviewed at the end of the period of issue of the card or when the card is cancelled, whichever is earlier.
A parent who has a Pensioner Concession Card is not entitled to the special concession unless s/he is currently receiving an eligible social security pension or allowance.
Special assessment does not apply to holders of the Commonwealth Seniors Health Card (CSHC).
A special assessment applies where either parent on whom a student is dependent is receiving a Community Development Employment Projects (CDEP) Scheme wage as a participant, that is the CDEP wage is not paid to administer a CDEP project which is an Aboriginal and Torres Strait Islander Commission (ATSIC) programme.
Special assessment no longer applies to the partner of a student or to a parent/guardian who is a CDEP administrator, but a continuing student may be eligible for maintained entitlements.
Maintained Entitlement
For the entitlement to be maintained:
Students from families receiving Exceptional Circumstances Relief Payment (ECRP) can apply for ABSTUDY under special assessment provisions. The usual parental or partner (as applicable) income test is waived.
While special assessment applies, the student can receive the maximum appropriate rate of Living Allowance subject to the student meeting the usual scheme requirements (including the student income test).
Applicants for special assessment on the basis of receiving ECRP need to:
Students are ineligible for ABSTUDY where they themselves receive ECRP.
The two key elements of the FFRS are the payment of income support (similar to Newstart, but without the activity test) and access to re-establishment grants by eligible farming families.
Income support component
Families applying for and receiving the income support payment under FFRS
will, for scheme purposes, be treated the same way as families receiving
Newstart and the like. Hence ‘special assessment’ provisions apply, but
only for the actual period of receipt of FFRS income support.
Students are ineligible for ABSTUDY where they themselves receive the income support component under FFRS.
Re-establishment grant
Grants of up to $45,000 are available to eligible families who choose to
leave farming. Grants are paid when the family farm is sold. However, a family’s
receipt of a re-establishment grant does not by itself provide any
concessional treatment under the ABSTUDY income tests.
The parental income test. This means that subject to the student income test, the student is entitled to the maximum relevant rate of Living Allowance during the period of special assessment.
Note: The partner fortnightly income test is waived for Exceptional Circumstances Relief payment 6.3.3.4 and Farm Family Restart 6.3.3.5.
Special assessment applies for the period that the parents/partner receives a pension, benefit, allowance or payment recognised for special assessment purposes during the year of study.
Where special assessment has been applied due to the family being in receipt of ECRP, this assessment is to continue to the end of the calendar year in which the ‘exceptional circumstance recovery period’ ends, even though ECRP is not paid past the recovery period, providing the student does not become ineligible for another reason, (eg change in income or study status).
If payment of ECRP ceases before the end of the exceptional circumstance recovery period because the family ceases to be eligible then the usual income test applies.
The applicant must notify Centrelink immediately if for any reason the pension, benefit, allowance or payment ceases. For example, if:
Where the pension, benefit, allowance or payment ceases for the parent/partner during the period of ABSTUDY eligibility, the entitlement must be reassessed. The reassessment applies from the date the period of assistance ceases and does not affect the entitlement for the period while the pension, benefit, allowance or payment was received.
In the reassessment, entitlement for the new period is calculated in the normal way, using the previous financial year's income of anyone who was a parent/partner of the student at the start of the eligibility period in the year of study.
Ellen's parents reunite after separating during the year of study. Her parents are separated on 1 February 2001 and she stayed with her mother who received a sole parent pension. On 1 September 2001 her parents are reunited after seven months' separation.
| Assessment Period | Type of assessment |
| 1 January 2001 - 31 January 2001 | normal assessment on parent' 1999/00 |
| 1 February 2001 - 31 August 2001 | special assessment parental income waived |
| 1 September 2001 - 31 December 2001 | normal assessment on parents' 1999/00 income |
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