Cessation of employment income 108-07010110

A separate procedure covers customers who are no longer self-employed.

If a non-customer advises they are ceasing work, they may wish to make a new claim for income support.

Advise the customer of new claim procedures, including details of any waiting period that may affect the payment start day if relevant. If customer is ceasing employment more than 2 weeks in the future and not claiming JobSeeker Payment (JSP) or Youth Allowance (YA), they may be able to lodge an early claim.

Note: if the customer is in the Youth Bonus Wage Subsidy 26 week suspension period, they may be eligible to have their payments restored without the need for a new claim if employment has ceased through no fault of their own.

If a current customer or their partner ceases work and receives a lump sum termination payment, the payment will be treated differently depending on which payment the person receives. Payments received by a customer through supported employment, including employment with an Australian Disability Enterprise (ADE) and the Supported Wage System (SWS), are assessed the same as payments received from open employment. See Leave and termination payments paid by an employer for more information.

If a customer left work or was terminated from a job in the previous 12 months, check if employment income and/or ceasing work was previously declared. If:

• ceasing work was not previously advised, request an Employment Separation Certificate (SU1) for customers claiming or receiving a payment with mutual obligations to determine if a failure must be investigated, or if an income maintenance period (IMP) is to apply
• employment income was not declared when the customer and/or partner were in receipt of an income support payment, seek required information to record details of the income, see Recording and correcting employment income details for more information

Leave and termination payments may be reported to the Australian Taxation Office (ATO) by an employer through Single Touch Payroll (STP). Employment cessation details, including the date work ceased, the reason employment ceased and any unused leave or redundancy payments paid, may pre-fill during reporting.

If STP cessation data is confirmed by the customer, verification is not required, unless the customer makes changes to the payment amounts or there is doubt about the number of days for the duration of leave payments. See Single Touch Payroll Table 4, Item 22.

A lump sum payment paid to a customer when the customer is only temporarily ceasing work (for example, taking long service leave) is employment income and is to be included with any other employment income and coded on the appropriate screen when reporting. Generally, customers taking paid leave will receive their leave entitlement in instalments, similar to the normal wages from the employer. See Leave and termination payments paid by an employer for more information.

If a customer's DSP was previously suspended for 2 years (or cancelled deemed suspended) due to full-time work, payment of DSP can be restored within this period and earnings updated if either:

• employment has ceased, or
• their income reduces below the threshold, or
• They work 30 hours or less and income does not preclude payment

There is no income maintenance period (IMP) imposed on ABSTUDY customers.

For ABSTUDY customers who receive a lump sum termination payment (remuneration related) including leave entitlements on or after the date of grant, the lump sum is apportioned over a 12 month period in 52 weekly amounts. Lump sum termination payments received prior to the date of grant are not taken into account. The procedure, Treatment of lump sums, contains further information.

A suspended jobseeker participating in the Youth Bonus Wage Subsidy (YBWS) initiative, who ceases work due to no fault of their own during the 26 week suspension period, can have their income support payment restored.

See Youth Bonus Wage Subsidy (YBWS) 26 Week Suspension Period.

Income reporting requirements for family assistance payments (Family Tax Benefit and Child Care Subsidy) and income support payments are different. The combined family income estimate for family assistance is not used to calculate income support entitlement.

• Most FTB/CCS customers have to provide a family income estimate that reflects their family's financial circumstances for the whole financial year. If a customer or their partner has had a change to their income, the customer should review their family income estimate and update it if required. See Updating income estimates for the current financial year for more information
• For income support customers with employment income, the gross amount before tax must be coded and assessed correctly. See Recording and correcting employment income details for more information

Service Officers must remind customers of the separate income reporting requirements at every opportunity to ensure both gross income before tax for income support payments and combined family income estimates for family assistance payments are updated when required.

If either member of a couple is receiving family assistance, the combined family income estimate must include all components of assessable income received or expected to be received for the whole financial year for the customer and/or their partner. If either member of the couple is eligible for an income support payment, all expected payments must be included in the family income estimate.

CCS customers must notify Services Australia of changes in circumstances that will impact their eligibility or entitlement to CCS or and/or Additional Child Care Subsidy (ACCS).

Child Care Subsidy (CCS) customers should update their Activity Test Details if ceasing employment income.

Note: if the customer is in receipt of Additional Child Care Subsidy (ACCS) (transition to work) refer to Additional Child Care Subsidy (ACCS) (transition to work) change in circumstances and reviews before making updates to their Activity Test Details.

For customers utilising child care, Additional Child Care Subsidy (ACCS) Temporary Financial Hardship (TFH) provides short-term support to families experiencing significant financial stress due to circumstances beyond their control. Refer to Additional Child Care Subsidy (ACCS) (temporary financial hardship).