Until 14 May 2010 all solar feed-in tariffs paid to pensioners were assessed as income for Social Security pension purposes, whether paid through a cash payment or as an electricity account credit. This policy reflected the broad objective of the income test to take into account all forms of income, in order to target income support to those most in need.
The Government has reviewed this policy in light of community concerns and after consultation with Government agencies and community groups.
The Government recognised the complexity involved in requiring pensioners to identify and advise of feed-in tariffs paid through credits on electricity accounts. Feed-in tariffs are paid under State and Territory legislation, and arrangements differ between jurisdictions and electricity companies. The calculation and presentation of credit amounts varies, and the amounts are generally small.
On 14 May 2010 the Government announced that feed-in tariffs paid as an electricity account credit will not be assessed as income for pension purposes.
Feed-in tariffs paid as cash to pensioners (for example by cheque or by direct deposit) will continue to be counted as income for pension purposes.
This adjusted policy is also the approach adopted by the Department of Veterans’ Affairs.
The adjusted policy applies from 14 May 2010 and applies to all Social Security income support payments (for example pensions such as Age Pension and allowances such as Newstart Allowance).
Each feed-in tariff paid as cash will be included under the income test for 12 months. For example if a pensioner received a cheque from their electricity company for $260 it will be counted as $10 income per fortnight for 26 fortnights.
Details
Most feed-in tariff amounts paid to households are small – in line with the amount of electricity produced by household solar panels – and are well below the income test free areas. Information to hand is that most feed-in tariffs are paid as an electricity account credit.
Single pensioners are able to earn up to $142 a fortnight without affecting the amount of pension they receive, and can still receive a part-pension when they earn up to $1,544 a fortnight.
Couples combined can earn up to $248 a fortnight without affecting the amount of pension they receive, and can still receive a part-pension when they earn up to $2,362 a fortnight combined.
Maximum rate pensioners will generally not have their pension reduced because of feed-in tariff amounts paid as cash, although this can depend on their other income and assets.
People receiving a part rate pension may have their pension reduced by a small amount but this can depend on their other income and assets.
You should contact Centrelink[1] if you would like to discuss your individual circumstances.
The assessment of feed-in tariffs paid in cash is no different to the rules for a pensioner who is paid income through rent on an investment property.
Social Security treatment of Commonwealth financial support for the initial capital installation costs of solar panels
Commonwealth Government financial support for the household installation of solar panels is not counted as income for pension purposes. This is because this support in effect provides a discount off the solar panel purchase price. This support can pay for a substantial part of solar panel installation costs.
