Parental income test for the Assistance for Isolated Children Scheme
Under the Assistance for Isolated Children Scheme, only the Additional Boarding Allowance is income tested.
Effect of parental income and boarding costs
Parental income affects the amount of Additional Boarding Allowance you may receive. It does not affect other Assistance for Isolated Children Scheme payments.
In 2016 we assess parental income for the 2014-15 tax year. If your parental taxable income for the 2014-15 tax year was $51,027 or less, it will not affect the payment.
If parental income was more than $51,027 in the 2014-15 tax year, the payment might be reduced by up to 20 cents for every dollar over this amount, depending on how many dependent children are in your family pool, as defined below.
The student's boarding costs also affect the amount of Additional Boarding Allowance you receive. If the boarding charges for the year are $7,765 or less, you can only receive Basic Boarding Allowance.
If the boarding charges for the year are over $7,765, you may be eligible for Additional Boarding Allowance. You can receive up to $1,533 Additional Boarding Allowance per year, as well as $8,015 Basic Boarding Allowance per year. The amount of Additional Boarding Allowance payable for the year will be the lower of:
- the maximum rate of entitlement less any reduction resulting from the Parental Income Test, or
- the level of the annual boarding costs for the student that exceed the amount of Basic Boarding Allowance
Boarding costs include actual boarding charges, plus an extra amount of $250 to cover incidentals like laundry and toiletries. Boarding costs are the net boarding fees charged by the institution. Fees for tuition or related items cannot be included.
Types of income tested
The parental income test uses parents' or guardians' combined taxable and other income for the tax year ending in the year before the student's year of study. This is called the base tax year. For example, if the student is studying in 2016, the combined parental income for the 2014-15 tax year can be used.
The parental income test includes:
- combined parental taxable income
- reportable fringe benefits
- income from outside Australia
- reportable superannuation contributions, and
- total net investment losses such as negative gearing losses for that tax year
Any child support or maintenance for a former partner you pay will be deducted from parental income.
If you want to claim Additional Boarding Allowance and have not given us your income details, call us.
The family pool is a term used to refer to the dependent children in your family who may affect your payment rate. Dependent children 21 years of age or younger in your family may be considered when assessing your Additional Boarding Allowance.
You may be eligible for a higher rate of Additional Boarding Allowance if:
- you are not receiving the maximum rate of Additional Boarding Allowance
- parental income is over $51,027, and
- there are two or more dependent children in the family pool
If parental income is over $58,649, you can usually only receive Basic Boarding Allowance. However, if there are two or more dependent children in the family pool, you may receive some Additional Boarding Allowance.
Dependent children can be included in the family pool if:
- they are receiving or eligible for Youth Allowance, ABSTUDY Living Allowance or School Fees Allowance
- Assistance for Isolated Children Additional Boarding Allowance is being paid for them, or
- they are up to 19 years of age, and if 16 to 19 years of age, attending secondary school
If there is a shared care arrangement in place for a child in your family, this may also be taken into account.
Dealing with changes to parental income in the study year
Where there has been a change in your income, the parental income test can be based on your and your partner's combined income for the tax year ending in the student's year of study. This is called the current tax year assessment. For example, if the student studies in 2016, the combined parental income for the 2015-16 tax year can be used.
If there has been an increase of more than 25% to parental income for the current tax year, compared to the base tax year, you must tell us as soon as possible as you may not be paid the correct amount.
To tell us about either a decrease in parental income or an increase of more than 25% you can download and complete the Assistance for Isolated Children (AIC) Current Tax Year Assessment form.
Parental income test not required
Parental income is not taken into account for periods in which you or your partner:
- receive an Australian Government income support payment or equivalent payment - this does not include payments for Family Tax Benefit or New Enterprise Incentive Scheme participants, or
- hold a current Health Care Card - this does not include a Low Income Health Care Card or card held by a person who receives Mobility Allowance or Carer Allowance for a disabled child
During this period, your Additional Boarding Allowance is only affected by the student's actual boarding costs.