ABSTUDY, Means Tests: Chapter 62 - Compensation

The following payments, ordinarily considered to be compensatory in nature, are not assessed as either income or assets for ABSTUDY purposes:

• 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 means tests.

The following compensation payments affect ABSTUDY entitlements:

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

62.2.1 Treatment of lump sum compensation payments

Taxable lump sum compensation payments are regarded for ABSTUDY purposes as the assets of the person to whom the compensation payment was made.

Non-taxable lump sum compensation payments are not regarded as an asset for ABSTUDY purposes.

62.2.2 Treatment of ongoing compensation payments

Taxable compensation payments that are made on an ongoing and regular basis are regarded for ABSTUDY purposes as the income of the person to whom the compensation payments are made:

• ongoing taxable compensation payments made to the parent are included as a component of parental income under the Parental Income Test.
• ongoing taxable compensation payments made to the student or partner are included as a component of ordinary income under the Personal Income Test and Partner Income Test.

Exception: Where a student or Australian Apprentice 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 or Australian Apprentice being in receipt of a compensation payment, the compensation payment should not affect the student's or Australian Apprentice's ABSTUDY. Where a student or Australian Apprentice has a partner who is serving a Compensation Preclusion Period and that preclusion period cannot be adjusted to take into account any effect on the student's or Australian Apprentice's ABSTUDY payments, the compensation payment should not affect the student's or Australian Apprentice's ABSTUDY.

Non-taxable compensation payments that are made on an ongoing and regular basis are disregarded for ABSTUDY purposes.