9.4.3.30 AoS - Minimum Income Requirements

Income requirements

The income requirements that are to be met by the assurer will depend on:

• the number of assurers, AND
• the number of children of the assurer(s), AND
• the number of adults to be supported under the AoS.

The income requirements applicable to individuals will not apply to a body or state agency providing an AoS.

Requirements of individuals

A person who gives an AoS must meet the income requirements specified in the Social Security (Assurance of Support) FaHCSIA Determination 2007 Division 4.1 of Part 4.

A person who gives an AoS is required to demonstrate a sustained minimum income for the current financial year and the previous financial year.

Example: If the relevant threshold is $40,000 on the day the delegate makes the assessment in the current financial year, the assurer must have had income of $40,000 not only for the current financial year but also for the previous financial year.

'Assessable income' of a person for a financial year includes any one or a combination of the following:

• taxable income,
• target foreign income,
• tax free benefit or pension,
• reportable fringe benefits total,
• tax-free salary received during overseas deployment as a member of the Australian Defence Force or Australian Federal Police,

which meets the income threshold during a financial year for the person.

Example: Mr Smith is a veterans' affairs pensioner. He has taxable income from earnings and investments of $25,000 annually. Mr Smith also receives an annual pension of $15,000 from DVA that is exempt from income tax under the Income Tax Assessment Act 1997. Mr Smith's 'assessable income' for the purposes of the AoS income test is $40,000: the sum of his taxable income and his non-taxable DVA pension.

Note: A tax-free pension or benefit for the purposes of the AoS Determination is as described in FAAct schedule 3 clause 7. A NON-TAXABLE PhD LIVING ALLOWANCE is NOT covered by this clause and therefore cannot be assessed as income for a prospective assurer.

Act reference: FAAct Schedule 3 clause 7 Tax free pension or benefit

Evidence of income

The person must provide evidence about the person's assessable income for each of the following years to Centrelink:

• the current financial year, AND
• the previous year (the most recent financial year), OR
• the financial year before the last.

Where a person cannot provide evidence for either of the 2 previous financial years their income will be taken to be nil.

Evidence for the current financial year

For the current financial year, the person must provide evidence about the person's assessable income for the part of the financial year up to the date on which the assurance is given, which may include the following:

• a document showing the person's gross income and period of service or employment, such as a payslip, group certificate, letter from the person's employer, or contract for service or employment, and/or
• a financial statement or other business record showing the person's gross and net business income for a specified period.

Only if required - in order to meet the minimum income requirement, documents showing payments of the kind mentioned above in the definition of assessable income should also be provided.

Evidence for a previous year

For either of the first or second financial years, the person must provide the following evidence:

• a notice of assessment issued by the ATO in relation to the person and the year,
• if the notice of assessment issued by the ATO does not disclose sufficient income to satisfy the minimum income requirement, then documents showing payments of the other income forming 'assessable income' mentioned above that have been paid to the person in that financial year.

Note: If a person's assessable income for a financial year meets the minimum income requirement, the person need only provide evidence of the relevant amount of that income.

If the person has not lodged a tax return for the previous year, a letter from the employer giving details about the person's employment such as, date of commencement of employment, amount of taxable income and contract of employment is required. A self-employed person is required to provide a letter from the accountant. The person will have to provide a notice of assessment issued by the ATO for the financial year before the previous financial year.

Requirements for bodies or state agencies

The income requirement does not apply to assurances provided by a body or state agency.

An AoS that is given by a body or state agency must be given on behalf of the body or state agency by a person who is properly authorised to give the assurance:

• A body or state agency may only give an AoS to a maximum of 2 adult persons at any time.
• A body other than a state agency may only give an AoS that is secured by a bank guarantee or other form of guarantee from a financial institution.

Further information about the income test requirements for assurers is contained in:

• 9.4.3.60 AoS - Income Requirements & Family Circumstances of Potential Assurer
• 9.4.3.80 AoS - Joint & Several AoSs

Act reference: SSAct Part 2C.4 Determinations

Social Security (Assurances of Support) (FaHCSIA) Determination 2007

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Last reviewed: 3 January 2012