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Tuesday, 8 May 2012
Page: 2859

Solar Energy

(Question No. 1718)

Senator Milne asked the Minister representing the Minister for Families, Community Services and Indigenous Affairs, upon notice, on 16 March 2012:

(1) Can a list be provided detailing those pensions and allowances for which payments from feed-in tariffs for household solar energy systems are considered income.

(2) For each of the payments identified in (1), can a detailed breakdown be provided of how each is deemed, including:

   (a) how income from feed-in tariffs is identified;

   (b) the dollar threshold per allowance or pension at which monies from feed-in tariffs is considered income; and

   (c) at what ratio pensions or allowances are then deemed (for example, a {Question Text}.50 reduction in pension/allowance per $1 of feed-in tariff income).

(3) Is the Minister aware of the Australian Taxation Office (ATO) private ruling number 88668; if so, how does this ATO ruling inform the deeming of pensions and allowances administered by the department.

Senator Chris Evans: The Minister for Families, Community Services and Indigenous Affairs and Minister for Disability Reform has provided the foll owing answer to the honourable s enator ' s question:

(1) Feed-in tariffs from household solar energy systems, paid as cash, are assessed as income for all social security income support payments. These cash payments are assessed as income over a 12 month period. For example, if a pensioner received a cheque from their electricity company for $260, it would be counted as $10 income per fortnight for 26 fortnights.

Feed-in tariffs paid as a credit on an electricity bill, are not assessed as income for social security income support payments.

(2) (a) Feed-in tariffs paid as cash are assessed in the same way as other ordinary income. Social security income support payment recipients are required to report feed-in tariffs from household solar energy systems to the Department of Human Services under the usual notification provisions.

   (b) The full amount of a cash feed-in tariff is included in a person's income. However, this may not affect the person's entitlement to a payment as all payments have income free areas. The following income free areas apply.

The income free area for single pensioners is $150 a fortnight. It is $264 a fortnight for partnered pensioners, combined. These limits apply to the Age Pension, Disability Support Pension and Carer Payment.

The income free area for Newstart Allowance, Parenting Payment Partnered, Partner Allowance, Widow Allowance, Youth Allowance (other) and Sickness Allowance payments is $62 a fortnight.

The income free area for Youth Allowance (student), ABSTUDY and Austudy is $236 a fortnight.

The income free area for Parenting Payment Single with one child is $174.60 a fortnight (plus $24.60 a fortnight for each additional child).

This information is set out in a publication distributed by the Department of Human Services, "A Guide to Australian Government Payments" and is available at the Department of Human Services website: www.centrelink.gov.au.

   (c) Income over the income test free areas reduces pension by 50 cents in the dollar for single pensioners and by 25 cents in the dollar for partnered pensioners. This applies to the Age Pension, Disability Support Pension and Carer Payment.

For allowances, personal income in excess of the applicable income free area reduces entitlement as follows.

For Newstart Allowance, Parenting Payment Partnered, Partner Allowance, Widow Allowance, Youth Allowance (other), and Sickness Allowance, for income between $62 and $250 a fortnight, the withdrawal rate is 50 cents in the dollar, and for income over $250 a fortnight the withdrawal rate is 60 cents in the dollar.

For Youth Allowance (student), ABSTUDY and Austudy, for income between $236 and $316 a fortnight the withdrawal rate is 50 cents in the dollar, and for income over $316 a fortnight the withdrawal rate is 60 cents in the dollar.

For Parenting Payment Single, for income over $174.60 a fortnight (plus $24.60 a fortnight per additional child) the withdrawal rate is 40 cents in the dollar.

Partner Income does not reduce a person's entitlement until it exceeds the relevant partner income free area. Generally, for an adult recipient, the partner income free area is $830 a fortnight. Partner income in excess of this amount reduces the person's entitlement by 60 cents in the dollar. In the special case where one member of a couple is getting a pension, the combined income of both persons is halved, and then the usual income test of the payment that each person is receiving is applied.

This information is set out in a publication distributed by the Department of Human Services, "A Guide to Australian Government Payments" and is available at the Department of Human Services website: www.centrelink.gov.au.

(3) The Minister is aware of the Australian Taxation Office private ruling number 88668. This ruling does not affect the social security income test treatment of feed-in tariffs from solar energy systems.