Employment income nil rate period 108-07010160

Item

Description

1

Customer's rate reduces to nil part way through an entitlement period

Employment income nil rate periods start from the Entitlement Period Start Day (EPSD) of the first fortnight where a customer would get a zero payment for that entitlement period.

The system works on a daily rate and often determines that the customer's rate is nil (on a daily basis) part way through an entitlement period. This can be because the customer's Working Credits run out part way through the period.

For example, a customer may be paid a part payment in an entitlement period because their Working Credits do not deplete until day five of the period. The 12 consecutive full fortnights of the employment income nil rate period actually start from the EPSD of the fortnight after the customer's rate goes to zero on a daily basis.

That means:

• the customer will be paid a part rate for the first 5 days
• they will be on a nil rate of payment from day 6 of the first entitlement period and the employment income nil rate period starts from the EPSD of the next fortnight and continues for 12 consecutive full fortnights

2

A customer commences full-time employment during their first instalment period

A customer who has claimed a qualifying employment income nil rate period income support payment and who starts full time employment during their first instalment period qualifies for the employment income nil rate period if they:

• start full time employment in their first instalment period but do not get paid their employment income until their next instalment period, or
• their employment income received in their first instalment does not reduce their income support payment to nil

A customer does not qualify for the employment income nil rate period if they:

• start full time employment during their first instalment period, and
• receive employment income during their first instalment period that reduces their rate of income support payment to nil

3

DSP customer employed at or above relevant minimum wage and working over 30 hours or more per week

Customer is no longer entitled to DSP as they are employed for 30 hours or more per week at or above the relevant minimum wage. There is no entitlement to the employment income nil rate period. Payment is suspended for 2 years when the Working Credit balance has depleted to zero.

See Commencing or returning to work or self-employment Disability Support Pension (DSP).

4

DSP customer employed at or above relevant minimum wage and working less than 30 hours per week

If the customer's income is sufficient to give them a zero rate but the customer is working less than 30 hours per week, the customer and their partner will be entitled to deplete their Working Credits and then will remain current at zero rate for the employment income nil rate period.

Once the employment income nil rate period has finished, both pensions will be suspended for up to 2 years or until the income goes down and they are entitled to some payment again.

See Commencing or returning to work or self-employment Disability Support Pension (DSP) and Extended suspension periods for pension payments.

5

DSP customer employed at or above relevant minimum wage and working over 30 hours or more per week has partner on JobSeeker Payment (JSP) paid at the Wife Pension (WP) transitional rate

The customer is no longer entitled to DSP as they are employed for 30 hours or more per week at or above the relevant minimum wage. There is no entitlement to the employment income nil rate period. Payment is suspended for up to 2 years when the Working Credit balance is zero.

JSP customers are only eligible to be paid at the WP transitional rate as long as their partner is current. If eligible, the transitional WP rate customer may continue to be paid JSP, but at the ordinary rate of payment only. If no longer eligible for JSP, they will:

• be able to deplete their Working Credits at the same time as the DSP customer, and
• then be suspended for the same period as the DSP customer

Note: once a JSP customer stops meeting provisions for payment at the transitional WP rate, they can no longer return to this rate of payment.

6

Parenting Payment (PP) customers

• Customers are no longer entitled to PP and therefore their entitlement to the employment income nil rate period stops when their youngest dependent child turns:
• 6 years if the customer gets PP partnered
• 14 years if the customer gets PP single
• For PP customers, an employment income nil rate period can continue if their relationship status changes (transfers between PP single and PP partnered and vice versa)
• However, an employment income nil rate period ends if the customer loses qualification for their payment and transfers to another income support payment, for example, a PP single customer's youngest child turns 14 and they transfer to JobSeeker Payment (JSP)
• Customers may be able to report on the 14th day of the 13th fortnight if the cancellation/suspension has not yet occurred

7

JSP customer starts permanent full time employment, partner is also receiving a payment in their own right, for example, Youth Allowance or Parenting Payment

If the income is sufficient for the partner's payment to reduce to zero, they will be entitled to the employment income nil rate period before cancelling.

Note: customers who are employed under the Youth Bonus Wage Subsidy (YBWS) initiative will automatically suspend for 26 weeks after serving an employment income nil rate period.

If the income does not reduce their payment to zero, they will remain current receiving a partial rate.

8

Customer reaches Age Pension age

The employment income nil rate period applies to all Age Pension age customers on a pension payment.

When a pension customer is on an employment income nil rate period their payment will be deemed as suspended. Their payment will restore automatically when the employment income reduces below the thresholds. There is no need to manually restore the payment.

If the customer is currently on the 13 fortnight nil rate suspension period when they transfer to Age Pension this continues until:

• the customer's payment is restored, or
• once the maximum suspension period has been reached for customers eligible for an extended employment suspension period

9

Income support customer entitled to add-ons

If a customer is entitled to the following supplementary payments:

• Approved Program of Work Supplement
• Pensioner Education Supplement
• Telephone Allowance (TAL) (if receiving TAL before the employment income nil rate period), and
• Language, Literacy and Numeracy Supplement (LLNS)

For example if a student receiving Youth Allowance (YA):

• reports fortnightly employment income that reduces their basic YA rate to nil, and
• is not enough to reduce entitlement to any one of the above supplementary payments to nil
• they will enter an employment income nil rate period from that fortnight, and
• they will still get a payment that only includes one of the above supplementary payments

Item

Description

1

Dates of CZR extensions during COVID-19

The previous extension of nil rate (CZR) that applied for nil rates commencing between 30 March 2020 and 24 August 2020 changed.

The 16 November 2020 hard cut-off date that applied for the extended nil rate period and the recommencement of six fortnight cancellations no longer applied.

All nil rate periods commencing between 30 March 2020 and 22 January 2021 (inclusive) ended on 16 April 2021.

2

ISP Customers

An ISP customer could remain in an extended employment income nil rate period until 16 April 2021 if:

• they and/or their partner had employment income over their income test threshold. This may or may not include income from JobKeeper Payment, and
• their nil rate period started between 30 March 2020 and 22 January 2021

During the extended employment income nil rate period:

• they continued to report their and/or their partners employment income in line with their existing reporting regime
• they maintained their existing concession card entitlements

3

Cancellation reasons

New cancellation reasons occurred from 16 April 2021, or the end of the instalment period in which 16 April 2021 falls. This is if a continuous period of a nil payment rate was still in place:

• ‘EJK’ (COVID EXT. CZR PERIOD END), or
• ‘EJP’ (COVID EXT. CZR PERIOD END - PTR INC)

4

DSP customers

There were no changes to process for DSP. A customer who was receiving DSP at a nil rate due to their own earnings was suspended employment income ‘EAN’. This was for up to 2 years rather than cancel at the end of the nil rate period.

5

Extension provisions from 23 January 2021

No extension provisions were applied for customers starting an employment income nil rate period on or after 23 January 2021.

The normal 6-fortnightly nil rate provisions applied from this date.

6

ICT releases delivered

• 19 June 2020 - Changes to prevent Newstart System (NSS) customers from being cancelled after 6-fortnights of nil rate due to employment income. This included: JSP, YAL, AUS, SKA, and FHA
• 4 July 2020 - Changes to prevent Parenting/Pension (PGA/PEN) customers from being cancelled after 6-fortnights of nil rate due to employment income. This included: CAR, DSP, PPP, PPS and AGE
• 12 September 2020 and 10 October 2020 - Changes to apply:
• cancellation codes, and
• letter for the extended nil rate cut off on 16 November 2020
• 11 and 14 November 2020 - Changes to prevent 16 November 2020 nil rate cancellations