Income testing

Clients are subject to an income test if they are receiving:

• main benefits apart from Invalid's Benefits paid to totally blind people
• supplementary benefits apart from Unsupported Child's Benefits, Orphan's Benefits or a Child Disability Allowance.

Income testing involves:

• the assessment of income over the six months previous to when a person applies for a main benefit, and
• ongoing monitoring of income received in addition to a main benefit.

Unsupported Child's Benefits and Orphan's Benefits are tested on the income (other than personal earnings) of the child for whom these benefits are paid.

Income is defined in section 3 of the Social Security Act 1964 as any money received (before income tax) that is not a one-off capital payment. It includes wages, salary, commission and Parental Leave payments, and the value of any interest (before income tax) acquired that is not a one-off capital payment. Whether or not money received is taxed is irrelevant to identifying it as income.

Income can also refer to a value in money's worth rather than money itself. For example, where another person is meeting expenses such as rent for the client, this can be considered as income. The value of free board or free rent is also considered as income.

Clients are required to declare other income received while they are in receipt of a main benefit. Receipt of other income over a certain level (generally $80 per week before tax) leads to abatement of the main benefit received. Supplementary benefits may be abated due to receipt of other income even when the level of income received is too low to affect the client's main benefit.

New Zealand Superannuation and Veteran's Pensions are not income tested unless:

• non-qualified spouses are included, or
• the qualified client receiving a Veteran's Pension is aged under 65 years.