Document ID: chunk:federal_register_of_legislation:C2025C00162:section:1068a:p4
Version: federal_register_of_legislation:C2025C00162
Segment Type: section
Provision Reference: s 1068A (pt 4/8)
Character Range: 1955120–1958023

in working out the person's rate of pension PP (single) on the day on which the advance is paid if pharmaceutical allowance were to be added to the person's maximum basic rate on that day.

No pharmaceutical allowance if annual limit reached
 1068A‑C5 Pharmaceutical allowance is not to be added to a person's maximum basic rate if:
 (a) the person has received an advance pharmaceutical allowance during the current calendar year; and
 (b) the total amount paid to the person for that year by way of:
 (i) pharmaceutical allowance; and
 (ii) advance pharmaceutical allowance;
equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.
Note 1: For the amount paid to a person by way of pharmaceutical allowance see subsections 19A(2) to (7).
Note 2: The annual limit is affected by the following:
               (a) how long during the calendar year the person was on pension or benefit;
               (b) the rate of pharmaceutical allowance the person attracts at various times depending on the person's family situation.

Amount of pharmaceutical allowance
 1068A‑C7 The amount of pharmaceutical allowance is $140.40 per year ($5.40 per fortnight).
Note: The annual amount is adjusted annually in line with CPI increases (see section 1206A).

Module E—Ordinary income test

Effect of income on maximum payment rate
 1068A‑E1 This is how to work out the effect of a person's ordinary income on the person's maximum payment rate:

      Method statement
           Step 1. Work out the amount of the person's ordinary income on a yearly basis.
           Step 2. Work out the person's ordinary income free area (see points 1068A‑E14 to 1068A‑E18 below).
                  Note: A person's ordinary income free area is the amount of ordinary income that the person can have without any deduction being made from the person's maximum payment rate.
           Step 3. Work out whether the person's ordinary income exceeds the person's ordinary income free area.
           Step 4. If the person's ordinary income does not exceed the person's ordinary income free area, the person's ordinary income excess is nil.
           Step 5. If the person's ordinary income exceeds the person's ordinary income free area, the person's ordinary income excess is the person's ordinary income less the person's ordinary income free area.
           Step 6. Use the person's ordinary income excess to work out the person's reduction for ordinary income using points 1068A‑E19 and 1068A‑E20 below.
Note 1: See point 1068A‑A1 (Steps 5 and 6) for the significance of the person's reduction for ordinary income.
Note 2: The application of the ordinary income test is affected by provisions concerning the following:
(a) the general concept of ordinary income and the treatment of certain income amounts