Low Income Health Care Card (LIC) income test 101-06040030

The LIC system will assess employment income coded on the Employment Income Paid Details (EAPP) screen and Employment Income Details (EAN) screen within the relevant LIC income assessment period. Provisional updates may populate into the claim based on details supplied by the customer. Service Officers must check every claim and manually code or correct employment income where required.

Employment details may be pre-filled through STP in the online claim for the customer to confirm. This includes the employer name and ABN. Service Officers can identify a STP employer has been presented if the question, ‘Do you work for (employer)’ is displayed in the claim slider. Further details can be seen on the STP Employment Update (EMCF) screen. Income is not yet provisionally coded for these customers. Service Officers will need to manually code the income from the claim information, checking evidence supplied.

Service Officers must make sure that employment income for the relevant assessment period is keyed on the EAPP screen for each employer and each individual pay date.

DOV: actual paid date from payslip (not received date)

Amount: assessable gross earnings paid during the paid period

Frequency: LOP (long period)

Start date: start date of the paid period from payslip

End date: end date of the paid period from payslip

Verify: NVE (default) or PVP (confirmed if payslips provided and scanned to record)

Note: employment income coded with LOP frequency will be attributed from the EPSD of the entitlement period in which it was paid and for a length of time determined by the period for which the employment income was paid.

The Employment Income Details (EAN) screen will then show the attribution of the income recorded on the Employment Income Paid Details (EAPP) screen. These attributed amounts are readily identified with a channel of 'CAL' to indicate the data is calculated. A Pay ID is also assigned. See the Resources page for an example.

Assess employment income with the ISP. See Recording and correcting employment income details.

When assessing ISP and LIC entitlement at the same time, if the income is already keyed and confirmed on the EAPP/EANS screen for:

• the full relevant LIC income assessment period, no further coding is needed and any duplicate provisional claim data on the EAPP/EANS screen may be deleted
• only part of the relevant LIC income assessment period, remove any duplicated provisional claim data on the EAPP/EANS screen. Make sure that the employment income is not counted twice

For LIC only customers (and/or partners), Service Officers must:

• key declared balances of bank accounts in the claim using the date of event (DOV) of the start of the 8 week LIC income assessment period
• accept and key any substantial change to the balance within the 8 week LIC income assessment period with the DOV of the change

Note: if a customer provides evidence, coding may override the original balances declared in the claim if the DOVs are equal. No evidence of bank details is needed to assess the claim.

For ISP customers and/or partners

If coding a bank account balance for a customer and/or ISP partner for the entire 8 week LIC income assessment period, see Coding income and assets for Centrelink payments and services.

If an ISP has been rejected, cancelled, and/or assessed during the 8 week LIC income assessment period, multiple DOVs may be needed. See the Resources page for examples.

If the Service Officer doubts the accuracy of any details provided by the customer, or there is a significant change in the value that could affect entitlement, they must determine if further documents are required.

Customer and/or partner on income support payment (ISP)

If coding financial investment or self-employment details for a customer and/or partner receiving an ISP for the entire income assessment period, see Recording and correcting employment income details and Coding income and assets for Centrelink payments and services.

If an ISP has been rejected, cancelled, and/or assessed during the 8 week LIC income assessment period, multiple DOVs may be needed. See the Resources page for examples.

Business income

For LIC claimants with business income, the amount must be annualised. This ensures the system correctly assesses the income for the 8 week income assessment period. See Steps to assess an interim profit and loss statement.

If the customer and/or partner has business income that has been updated within the last 12 months and there has been no substantial change:

• the business income does not need to be updated, and
• the customer does not need to provide verification documents

If a customer and/or partner advises that a business has stopped trading, see Business has ceased or has been sold.

For more details on changes to investment or business income, see:

• Income and expenses of a business
• Commencing or returning to self-employment (CLK)
• Coding income and assets for Centrelink payments and services
• General notification provisions and exceptions
• Assessing income from real estate and timeshare

For LIC only, the DOV is the start of the 8 week LIC income assessment period.

If a business or rental property started on or after the start of the 8 week LIC income assessment period, the DOV will be the:

• start date of the business, or
• the date the property started generating income

LIC customers are not subject to an Income Maintenance Period (IMP). The treatment of lump sum leave and redundancy payments for LIC is different to the way these payments are treated for ISP:

• redundancy and lump sum leave payments (where employment will not be continuing with the same employer) are recorded on the Income Maintenance Period (IMP) screen
• the LIC system transfers the details to the LIC Income Maintenance Lump Sum (LIM) screen. This a display only screen viewed in Customer First. This screen indicates the dates for which the lump sum amount is apportioned over 12 months. A customer's lump sum payment may preclude them from an ISP, however they may still be eligible for a LIC because of the difference in income assessment. See the Resources page for an example of how to assess lump sum redundancy payments
• if the customer has received a lump sum leave payment and will be returning to work with the same employer after the period of leave, this amount is keyed as employment income on the EAPP screen. See details about customers advising leave payments in Leave and termination payments paid by an employer
• the LIC Compensation Lump Sum (LIL) screen displays lump sum compensation payment and apportioned dates. This information transfers from the Compensation Claim Summary (CMCS) screen that is maintained by the Compensation team. See Role of staff outside Compensation Teams and the Resources page for compensation assessment examples
• for commissions or royalties, see Income for an independent contractor and commission income and the Resources page for royalty income examples

Methods for calculating a backdated start date are detailed in Processing Low Income Health Care Card (LIC) claims.

Employment income must be recorded for the 8 week period ending on the backdated start date.

Any subsequent change to employment income during the entire period up to the lodgement date of the LIC claim must also be recorded to make sure that the claimant retains eligibility throughout the backdated period.

When backdating the start date to a date:

• on or after 7 December 2020, employment income paid is keyed on the EAPP screen
• before 7 December 2020, see the Resources page for coding examples

Although LIC is not subject to an assets test, the income test does apply to income from financial investments, including:

• deemed income from account-based income streams
• income from income stream products, such as superannuation pensions and defined benefit income streams

See Adding or updating an account-based income stream for further instructions including determining DOV.

See relevant procedure below when adding or updating a:

• defined benefit income stream
• pooled lifetime income stream
• lifetime income stream
• life expectancy income stream
• term income stream
• market-linked income stream
• Self Managed Superannuation Fund or Small APRA Superannuation Fund income stream

Individual cases of deprivation may be less than the allowable yearly amount, however when totalled, they may exceed the gifting free areas. All assessable cases of gifting must be recorded. Assessable cases are any gifts made:

• while the customer and/or their partner are receiving LIC, and
• in the 5 years immediately before claiming or becoming qualified (whichever is later)

Do not record gifts outside of this 5 year period as they will incorrectly be included in the calculation of the gifting free areas. See Assessing deprivation/gifting.

For customers and/or partners who have received an ISP within 8 weeks of the LIC claim but whose payment is now cancelled, the Date of event (DOV) will be the day after the date paid to (DPT+1) of their previous ISP.

For Process Direct, go to the Low Income Assessment Summary (LIAS) screen.

In Customer First, go to the LIC Centrelink Payments (LICP) screen via the LIAS.

If an ISP has been rejected, cancelled, and/or assessed during the 8 week LIC assessment period, multiple DOVs may be needed. See the Resources page for examples.