Assessment of employment income for Centrelink payments 108-07010000

Employment income is income for which a customer has actually done some work.

This includes:

• wages
• cash payments
• supported wages
• salaries
• stipends
• commission
• honoraria
• bonuses
• penalty rates or overtime
• salary amounts voluntarily sacrificed to superannuation, and
• leave payments received in relation to an employee/employer relationship where the customer is still engaged on an ongoing basis

Income paid for work performed is employment income.

To calculate income, the gross rate of employment income is used, before taxation or any personal deductions, including voluntarily salary sacrificed contributions to superannuation.

If a customer receives a gift in kind, in lieu of money for work performed, the value of the gift is assessed as income by way of valuable consideration. However, credits received from participation in approved exchange trading systems (ETS) and other community exchange schemes are not treated as income for social security purposes, unless both cash and credits in ETS schemes are received, in which case the cash amount is assessed as income.

See Recording and correcting employment income details for assistance recording details of employment income.

A customer's employment income will affect their income support payment depending on the income and assets tests appropriate for the payment they are receiving. For example:

• pensions income and assets tests
• allowance income and assets tests, or
• Personal Income Test and Income Bank for ABSTUDY, Austudy and Youth Allowance (YA) students and Australian Apprentices

Employment income is assessed from the Entitlement Period Start Date (EPSD) of the entitlement period in which it is paid. The income will be apportioned from the EPSD for the same number of days as the employment pay period it relates to.

If the payment was for a period equal to or less than the length of the entitlement period, the income will be spread evenly across the entitlement period. Income from payment periods greater than the length of the entitlement period are assessed across multiple entitlement periods. See the Recording and correcting employment income details Resources page for examples of how income is apportioned.

Employment income may be subject to Working Credit, Work Bonus or Income Bank rules and Income Test rules each day of the entitlement period, regardless of the days worked.

Note: if a new pension claim is rejecting income or paying the incorrect rate under the income test, and there is employment income coded, check the Factors Affecting Rate (PFAR) screen for the apportionment of the income.

A customer may be paid an amount of employment income that is not for a particular period, for example, a performance bonus. Ask the customer questions to determine if the payment relates to a specific period. For example, was the payment in return for work or a service provided? If so, what period was this work or service performed over? It may be appropriate to request a copy of a payslip giving details about the payment, if available.

If the set pay period cannot be determined based on the details provided:

• the amount is assessed over a period of up to 52 weeks, and
• the assessment period commences from the entitlement period start date of the period in which the payment is paid
  See Treatment of lump sums

If, after discussion with the customer and Local Peer Support (LPS), a pay period cannot be determined, refer the case to the Level 2 Policy Helpdesk for investigation. In the referral, make sure information is provided about the questions asked and the answers given by the customer. Scan any available documents, such as payslips, to the customer’s record. Document the customer’ record to indicate that the case has been referred for follow up.

For information on the assessment of leave or redundancies, see Leave and termination payments paid by an employer.

For information on the assessment of income from seasonal work, see Assessing income from seasonal work.

Working Credit allows certain income support recipients of workforce age to offset income from employment against credits accrued during periods of low or no income. Employment income only affects the customer's payment when the Working Credit has been depleted and the income free area exceeded. If the customer's income reduces their fortnightly rate to nil and some of that income is employment income, the customer's payment may remain current at nil rate for up to 12 fortnights and they may retain certain benefits.

The Work Bonus is a discount applicable to the assessment of employment income paid to Age Pension age pensioners, except Parenting Payment Single (PPS) customers who are Age Pension age.

For partnered customers receiving family assistance and social security pension or benefit but not receiving an allowance it may be appropriate to update the family estimate when employment income is updated under the following conditions:

• neither the customer nor partner has updated the family estimate on that day or within this contact
• the customer or partner is making a personal contact (that is, source is personal or phone)
• if the partner contacts to provide new income details for income support purposes, and could reasonably be expected to provide an estimate, the estimate can be updated