Special Benefit and Carer Allowance
Special Benefit is a “safety net” that provides income support for people who do not qualify for another social security payment, and who need financial support.
To be eligible for Special Benefit the person must:
- not be eligible for a pension or benefit under the SSA or a service pension under the Veterans’ Entitlements Act 1986 (Cth);
- not be disqualified for Newstart Allowance because of industrial action, being a seasonal worker, moving to a low employment area or breaching the requirements of the SSA;
- not be disqualified for Parenting Payment or Austudy for failure to meet participation requirements;
- not be disqualified for the Youth Allowance because of failure to satisfy the activity test or breaching the requirements of the SSA;
- be a resident of Australia or hold a visa that the Minister determines eligible for Special Benefit; and
- be unable to earn a sufficient livelihood for self and dependants.
The SSA gives Centrelink discretion to decide whether to recognise a person as “unable to earn a sufficient livelihood” and to determine whether Centrelink should pay them. These decisions are affected by:
- whether they are able to support themselves or receive adequate support from their families;
- the reasons behind their lack of support; and
- the nature and extent of their financial hardship.
A two-year waiting period may apply to Special Benefit applicants. An exemption applies for holders of a specific class of visas, or where there has been a significant change in circumstances beyond the person’s control.
Typical cases where Special Benefit may be paid include:
- resident children, whose parents are not entitled to payments;
- victims of natural disasters;
- people on Criminal Justice Stay Visas or some other temporary visas; and
- migrants who are too old to receive Newstart Allowance but cannot meet the residence requirements for Age Pension.
These categories are not exhaustive. Both the Secretary and the appeals tribunals will look at the circumstances of each case.
People receiving Special Benefit who are holders of designated temporary protection, humanitarian, and safe haven visas are usually required to meet the activity test from 13 weeks after the visa is granted (see: “Newstart Allowance“, above). People living in isolated areas, some carers, pregnant women, parents, and some people who are temporarily ill are specifically exempt, as well as those covered by the “special circumstances” general discretion.
Failure to comply with the activity test or Special Benefit Employment Pathway Plan may result in a penalty being imposed. The penalties are the same as for Newstart Allowance breaches (see above).
Rate of Benefit (s746)
Special Benefit is paid at a rate which does not exceed the rate of Newstart Allowance, Austudy or Youth Allowance (see above) that the person would receive if they qualified for that benefit.
Centrelink has a discretion to pay Special Benefit at a lower rate. A strict income test applies, so that the rate of payment is reduced by $1 for every $1 of the person’s income. There is no “free area” for Special Benefit, so any income reduces the payment rate, which may also be reduced if the person is in receipt of free board and/or lodgings.
The assets test for Special Benefit is generally also used for Sickness Allowance and Newstart Allowance (see: “Income and assets tests for Sickness, Youth, Newstart and Parenting Payment (Partnered)”, below). For a long-term payment of a special benefit, available funds must be no more than $5,000.
Rent Assistance may also be payable (see: “Rent assistance“, below).
- a disabled adult (s198);
- a disabled adult and a dependent child (s198);
- a child with a “severe disability” or a “severe medical condition” (s197B);
- two or more children with a disability or medical condition (s197C);
- a disabled adult and one or more children each with a disability or medical condition (s197D);
- a child who has a terminal condition (s197E);
- a child with a severe disability or severe medical condition on a short-term or episodic basis (s197G); or
- a “profoundly disabled child”, or two or more “disabled children” (pre-1 July 2009 saved cases).
A person may also be paid a Carer Payment if they exchange care, under a parenting plan, of two or more children each with a disability or medical condition (s197F).
Carer Payment claims in respect of children with disabilities or medical conditions are assessed against the “Disability Care Load Assessment (Child) Determination“, which requires an assessment by a “treating health professional”, such as the child’s doctor, registered nurse or registered psychologist.
To receive a Carer Payment to care for a disabled adult the adult must be assessed under the Adult Disability Assessment Tool (ADAT), on the basis of the responses provided in the treating health professional report. This report may be completed by a doctor, nurse, occupational therapist or an Aged Care Assessment Service.
A person cannot receive Carer Payment as well as another income support payment. However, the person may be entitled to other payments such as Carer Allowance or Family Tax Benefit. A person who receives a Carer Payment for a child should also be entitled to Carer Allowance.
The person being cared for must meet the care receiver income and asset test. There is no obligation to live with the cared for person, only to provide constant care. A person receiving carer payment is entitled to receive payment for up to 63 days per year while taking respite from care.
The basic rates of Carer Payment are to the same as for the Age Pension. The rate of the Carer Payment is subject to the pension income test or assets (see: “Income and assets tests for pensions”, below).
A pensioner may also be eligible for Rent Assistance and other supplements that increase the pension above the standard rate.
Income and assets tests for pensions
The rates of each of the above pensions are subject to either the income test or the assets test, unless the pensioner is permanently blind. Where a person has both income and assets, the test that produces the lower payment applies.
The income test allows a pensioner to earn income to a point before the level of pension is reduced. The level depends on the person’s marital status. For each $1 of income in excess of the set level, the weekly pension is reduced by 50 cents (single pensioner) or 25 cents each (partnered pensioner).
Employment income is subject to a Work Bonus for pensioners over Age Pension age. The Work Bonus was introduced from 20 September 2009 to replace the Pension Bonus Scheme. The first $250 of income in a fortnight is disregarded from the income test. Also if a person does not earn money in a fortnight they may accrue the $250 to count alongside future earnings. A person can accrue up to $6,500. This is in addition to the normal allowable income threshold.
A permanently blind person can receive the Age or Disability Support Pension, regardless of income (s1065).
The income of a partnered pensioner is equal to half the combined income of the person and their partner.
Income is defined very broadly in the SSA. It is different to the definition for income tax law. It includes amounts that are “earned, derived or received for the person’s own use” and periodical payments or benefits by way of gifts or allowances. “Income amount” means valuable consideration, personal earnings, moneys or profits (whether of a capital nature or not) (s8). Among other things, income includes bank interest, regular superannuation payments and rent paid by tenants. (For workers compensation payments,see: “Compensation and damages payments“, below.)
Several types of income are not assessed under the income test, for example:
- loans that a person receives;
- payments under the SSA;
- emergency relief;
- insurance payments for loss of property; and
- refunds from Medicare or health insurance funds.
A complete list of exempt income appears in section 8(8) of the SSA.
Income is defined as gross income without any reduction (s1072) except where a person carries on a business when expenses involved in gaining that income may be deducted (ss1074 & 1075). Offsetting a loss from one source against other income is not permitted.
- the value of all the person’s investments are added together;
- investments under the threshold are deemed to earn 3% interest; and
- the amount over the threshold is deemed to earn 4.5%.
Note: The deeming rates and thresholds change periodically. Check with Centrelink for current rates.
This is a complex area and any specific queries should be taken to a community legal centre, Tasmanian Legal Aid or a solicitor.
A pension is reduced under the assets test if the total net value of the person’s property or assets (apart from their home) exceeds the relevant limit, which changes annually.
For each $1,000 of assets in excess of the limit, the fortnightly pension is reduced by $1.50 per fortnight (single and couple combined).
A permanently blind person will continue to receive Age or Disability Support Pension, regardless of assets.
The value of a person’s assets is the current market value, the amount the assets could be sold for less any debts owed on the assets, and is not the replacement value or the original cost.
There are many things excluded from the asset test including the “principal” home (as long as the person is living in it), and surrounding land of up to two hectares , special aids for disabled people, and pre-paid funeral expenses. A list of the assets exempt from the asset test appears in section 1118.
The value of an asset may be excluded under the “hardship provisions”, if the pensioner cannot sell or realise the asset or use it as security for borrowing (or if it would be unreasonable to expect the pensioner to sell, realise or use the asset as security) and if the pensioner would suffer severe financial hardship. For the hardship provisions to apply, a person must make a specific claim to Centrelink, consideration is not automatic.
If the hardship provisions apply, the level of pension might be reduced by the income which could be earned from the pensioner’s use of the asset (ss1129, 1130 . This means that the value of the asset may still affect the rate of pension payable.
A person of age pension age who qualifies for Carer Payment or Age Pension or is the partner of such a person, may also be eligible for consideration under the “extended land use test”. They have to have a 20-year continuous attachment to the land and principal home. They also have to be making “effective use of the land”, meaning that if the land or part of it is productive, it is being used to generate an income. If successful, all land held on the same title as the principal home, or deemed to be on one title, is exempt from the assets test.