3.02 Government payments

Some people are entitled to various forms of income support from the government. This includes people who are unable to work due to sickness, old age, or disability. It also includes students who are studying full-time in an approved course or doing an Australian Apprenticeship.

An income support payment from the government is called an allowance or pension. It is provided by the Department of Human Services, through the Centrelink program. Eligibility for income support depends on the circumstances of the individual.

 

Income support for students

For students engaged in full-time study or an Australian Apprenticeship, the government offers three main types of regular payment that can be used to cover day-to-day expenses while studying or training:

Government allowance	Description
Youth Allowance	Full-time students, under $25$25 years of age, studying an approved course or doing an Australian Apprenticeship
Austudy	Full-time students, aged $25$25 years or older, studying an approved course or doing an Australian Apprenticeship
ABSTUDY	Aboriginal or Torres Strait Islander students, studying an approved course or doing an Australian Apprenticeship

There are additional allowances students can claim to help cover specific costs like travel fares and rent assistance.

 

Other types of income support

The table below shows some of the other types of income support provided by the government:

Government allowance or pension	Description
Age pension	People who have reached the pension age
Disability support pension	People with a permanent condition that prevents them from working
Family tax benefit	Assists families with the cost of raising children
Newstart Allowance	Unemployed people aged $22$22 or over who are looking for work
Sickness Allowance	People unable to work or study temporarily because of illness, injury or disability

 

Determining the payment amount

Government allowances and pensions come with a set of eligibility criteria that an applicant must meet before they can receive any payments. These could include being a certain age, earning less than a certain amount, or being enrolled in an approved course.

Tables, like those in the worked examples below, are used to determine how much government income support a person is entitled to receive.

 

Worked examples

Example 1

The following table is used to determine the maximum amount of Youth Allowance available each fortnight for students and Australian Apprentices.

Table 1: Youth Allowance (2018-19)
Your circumstances	Your maximum fortnightly payment
Single, no children, younger than $18$18, and live at your parent’s home	$\$249.20$$249.20
Single, no children, younger than $18$18, and need to live away from your parent's home to study, train or look for work	$\$455.20$$455.20
Single, no children, $18$18 or older and live at parent’s home	$\$299.80$$299.80
Single, no children, $18$18 or older and need to live away from parent’s home	$\$455.20$$455.20
Single, with children	$\$596.50$$596.50
Member of a couple, with no children	$\$455.20$$455.20
Member of a couple, with children	$\$499.90$$499.90

 

Use table 1, to answer the following questions:

1. Olivia is seventeen years old, single with no children, and lives at home with her parents. She is entitled to Youth Allowance because she is studying full-time in an approved course. Calculate the maximum amount she will receive from her Youth Allowance each fortnight.
2. Emily is eighteen years old and needs to live away from her parent's home in order to study an approved course. She is single and has no children. What is the maximum fortnightly amount of Youth Allowance she can receive?

Solution:

Our aim is to match the individual's circumstances with the appropriate row in table 1.

1. From the first row, we see that Olivia is entitled to $\$249.20$$249.20.
2. From the fourth row, we see that Emily is entitled to $\$455.20$$455.20.

 

Example 2

Students who are studying full-time or doing an Australian Apprenticeship, may also be earning an income from a part-time job or some other means. In these situations, the student's Youth Allowance payments will be reduced according to table 2, below. Note that all income earnings in the table are fortnightly amounts.

Table 2: Impact of Earnings on Youth Allowance for Students and Australian Apprentices (2018-19)
Your situation	If you earn between $\$437$$437-$\$524$$524 your fortnightly payment reduces by:	If you earn more than $\$524$$524 your fortnightly payment reduces by:	Your payment reduces to $\$0$$0 once your incomes exceeds:
Single, under $18$18, living at home	$50$50 cents for each dollar you earn over $\$437$$437	$43.50$43.50 plus $60$60 cents for each dollar you earn over $\$524$$524	$\$873.74$$873.74
Single, over $18$18, living at home	$50$50 cents for each dollar you earn over $\$437$$437	$\$43.50$$43.50 plus $60$60 cents for each dollar you earn over $\$524$$524	$\$958.84$$958.84
Single, or in a couple, no children, living away from home.	$50$50 cents for each dollar you earn over $\$437$$437	$\$43.50$$43.50 plus $60$60 cents for each dollar you earn over $\$524$$524	$\$1221.84$$1221.84
In a couple with children	$50$50 cents for each dollar you earn over $\$437$$437	$\$43.50$$43.50 plus $60$60 cents for each dollar you earn over $\$524$$524	$\$1297.50$$1297.50
Single with children	$50$50 cents for each dollar you earn over $\$437$$437	$\$43.50$$43.50 plus $60$60 cents for each dollar you earn over $\$524$$524	$\$1461.00$$1461.00

 

Use table 1 and table 2, to answer the following question:

Jennifer is $20$20 years of age, has no children and is living away from home. She is training for an Australian Apprenticeship and is entitled to Youth Allowance. She also works part-time in a hairdressing salon.

1. What is the maximum amount she can earn in her part-time job, before her Youth Allowance is affected?
2. What is the maximum she can earn before she loses her Youth Allowance entitlement completely?
3. How much Youth Allowance will she receive if she earns $\$375$$375 per week?

Solution:

1. We can see from the second column of table 2, that Youth Allowance is only reduced when a person's income is over $\$437$$437. Therefore Jennifer can earn a maximum of $\$437$$437 before her Youth Allowance is affected.
2. Jennifer's circumstances match the description in the third row of table 2. The maximum she can earn before she loses her Youth Allowance completely is $\$1221.84$$1221.84.
3. From the fourth row of table 1, we see that the maximum Youth Allowance Jennifer could receive is $\$455.20$$455.20. Because Jennifer earns an income, we must refer to table 2 to work out how much her Youth Allowance will be reduced. She earns $\$375$$375 per week, which is $375\times2=\$750$375×2=$750 per fortnight.
   
   Referring to the third row of table 2, we see that her Youth Allowance will be reduced by $\$43.50$$43.50 and $60$60 cents for every dollar over $\$534$$534. Once we've calculated the reduction, we subtract it from the maximum Youth Allowance she could receive.

   Reduction in Youth Allowance	$=$=	$43.50+\left(750-524\right)\times0.60$43.50+(750−524)×0.60
   	$=$=	$43.50+\left(226\times0.60\right)$43.50+(226×0.60)
   	$=$=	$43.50+135.60$43.50+135.60
   	$=$=	$\$179.10$$179.10
   Youth Allowance received	$=$=	maximum Youth Allowance$-$−reduction
   	$=$=	$455.20-179.10$455.20−179.10
   	$=$=	$\$276.10$$276.10

 

Practice questions

Question 1

Question 2

 

Aged pension

When calculating the amount of Aged Pension an individual or a couple will receive, their age, their income and their assets are taken into consideration. If eligible, they will receive the maximum basic rate. Some individuals may qualify for the additional maximum pension supplement and or the energy supplement on top of the maximum basic supplement. Payments are then reduced when earning an income above a certain amount.

 

Practice question

Question 3