The Administrative Appeals Tribunal has upheld the decision that a pre-1 January 2015 account-based pension had lost its grandfathered status under the incomes test. The pension commenced in November 2014. As at 31 December 2014 the individual was in receipt of a new start allowance (NSA). Consequently the pension was eligible for grandfathering – and the counted income from the pension would be assessed under the “deductible-amount” basis rather than under the “income deeming rules”.
The individual went to NZ in February 2015 and stayed for about 4 weeks. As she was outside Australia her entitlement to the NSA ceased but recommenced on her return in March 2015.
Unfortunately, this break in continuity of the payment of the NSA meant that her pension ceased to be entitled to its grandfathered status under the incomes test. Consequently, the pension was assessed under the income deeming rules which resulted in greater counted income and therefore a reduced NSA rate.
Additionally, her husband was entitled to an age pension and as her pension was assessed under the income deeming rules, this resulted in a greater counted income being attributed to him resulting in a reduction in his age pension.
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