Working Credit 108-07020000

Is the customer a member of a couple?

• Yes, go to Step 2
• No, go to Step 5

For each of the customer and/or partner, determine:

• Income Free Area (IFA) - include amount for dependent children. Note: the additional income free area for children only applies to pensioners paid under the transitional rules for pension customers
• For JSP customers receiving the transitional rate of payment, the IFA used for WC will be dependent on the method used for the transitional rate calculation
• Employment income. Note: pensioners of Age Pension age may be entitled to the Work Bonus
• Other ordinary income
• Working Credit balance as at the entitlement period start day (EPSD)
• total ordinary income (TOI) = employment income plus other ordinary income

Go to Step 3.

• For couples where neither is receiving a pension, only their own individual income affects accrual and depletion
• If any pensioner, with employment income, is of Age Pension age, they may be entitled to the Work Bonus. The Work Bonus is applied before Working Credit
• For couples where either/both are receiving a pension:
• Add together customer and partners employment income amounts and divide by 2. Note: if one or either of these customers are pensioners, have employment income and are of Age Pension age they may be entitled to the Work Bonus. The Work Bonus is applied to the individual's employment income only and before the combined income is divided by 2. For details, see Work Bonus and balance for pensioners of Age Pension age
• The resulting amount is the adjusted employment income amount to be used for each member of the couple in the Working Credit calculations

Note: accrual and depletion are calculated daily. Employment income is spread evenly over the fortnight. The daily rate is the fortnightly rate divided by 14. The fortnightly rate for every day will be the same as the total fortnightly employment income. These calculations are done after adjustments have been made for couples where either/both are receiving a pension.

• for couples where neither is receiving a pension, only their own individual income affects accrual and depletion
• for couples where either/both are receiving a pension:
• add together customer and partner's other ordinary income amounts and divide by 2
• the resulting amount is the adjusted other ordinary income amount to be used for each member of the couple in the Working Credit calculations

Note: accrual and depletion are calculated daily. Other ordinary income can change each day of the fortnight. The daily rate for a particular day is the other ordinary income divided by the number of days to which it applies. These calculations are done after adjustments have been made for couples where either/both are receiving a pension.

• For single customers or couples where neither is receiving a pension, only their own individual income affects accrual and depletion
• for couples where either/both are receiving a pension:
• for each member of the couple, add together the adjusted employment income amount and adjusted other ordinary income amount
• this results in TOI for each person

Note: accrual and depletion are calculated daily. TOI for a day expressed as a fortnightly rate is calculated by adding the employment income and other ordinary income daily amounts in the entitlement period. These calculations are done after adjustments have been made for couples where either/both are receiving a pension.

For each customer for each day of the fortnight, determine:

• if total ordinary income (TOI) for the day is less than ($48 divided by 14), go to Step 2
• if TOI for the day is between ($48 divided by 14), and (Income Free Area (IFA) divided by 14): Since TOI is less than the IFA, applying the income test will not affect entitlement. There is no accrual or depletion of Working Credit. Procedure ends here
• if TOI for the day is greater than (IFA divided by 14), go to Step 4

The customer's entitlement is not affected, and there is an accrual of Working Credit. An accrual amount has to be calculated for each day of the instalment period.

The daily Working Credit accrual amount equals the maximum accrual amount less the adjusted total ordinary income:

Daily accrual = ($48 divided by 14) - TOI for the day

Add together the daily accrual amounts to obtain the accrual amount for the fortnight.

The exceptions to this are:

• if the customer already has 1,000 credits or 3,500 credits for Youth Allowance (YA) (job seeker) customers there will be no accrual
• if they have just under 1,000 credits or 3,500 credits (YA (job seeker) customers), the actual accrual amount will be the lower of:
• the amount required to bring the customer's Working Credits to 1,000 or 3,500 (YA (job seeker) customers), or
• the calculated accrual amount

Add together the customer's Working Credits and the accrual amount calculated at Step 2.

Go to Step 7.

If customer's TOI for the day is greater than (IFA divided by 14), their entitlement may be affected and/or their Working Credits may be depleted. Determine for each customer:

• (TOI for the day expressed as a fortnightly rate - IFA)/14
• daily rate of employment income for the day
• current Working Credit balance

The lower of these is the Working Credit depletion amount.

• add together the depletion amounts for each day of the fortnight to get a total depletion amount
• the fortnightly depletion amount is then deducted from the Working Credit balance at entitlement period start day (EPSD)

Current Working Credits - depletion amount = new Working Credits (if calculated daily).

To calculate the income amount to be used in the income test applicable for a customer's payment, use the following formula:

TOI - depletion amount = adjusted TOI

Apply the income test using the adjusted TOI figure calculated. See:

• Allowance income and assets test, or
• Pensions income and assets test

Procedure ends here.

The WCBS screen allows Service Officers to view Working Credits at a point in time and the relevant accrual and depletion at that time.

More detailed information on Working Credit calculations can be found by selecting a line on the WCBS screen. This will display the Working Credit Balance Explanation (WCBE) screen.

The WCBS screen is a display only screen, no updates are allowable.

Note: for JSP customers on the transitional rate of payment, the balance displayed will be the higher comparison rate.

The following fields are displayed on the WCBS screen:

• Balance as at: allows the date to be updated so the balance of Working Credits at that date will be displayed. Date input can be in the future
• Date:
• Balance:
• Accrual:
• Depletion:
• AMR:

The WCBE screen presents specific and relevant Working Credit information to explain a customer's balance of Working Credits, the current accrual or depletion rate and the effect on a customer's gross rate of payment for all Working Credit payment types.

Note: for JSP customers on the transitional rate of payment, the balance displayed will be the higher comparison rate.

The following fields are displayed on the WCBE screen:

• income used to calculate accrual amount and/or depletion amount
• relevant Income Free Area (IFA)
• Working Credit accrual/depletion amount
• Working Credit adjustments
• information for a particular date and/or a particular fortnightly entitlement period

The WCBE screen can accessed by either:

• making a selection from the WCBS screen
• coding WCBE in Nxt:
• selecting the Go To: footer on the Period Rate Explanation (REX) screen

The following fields/headings will be displayed on the WCBE screen:

• From:
• Working Credit Balance:
• W/C Balance Change Reason:
• W/C Accruing/Depleting:
• Cus Income Free Area (IFA):
• Customer Age Pension Age: this field is only displayed when the customer is within 12 months of reaching their Age Pension age
• Employment Income:
• Non-Employment Income:
• Total Income:
• W/C Depletion Amount:
• Adjusted Income:
• WC Depletion Amount used Least of:
• W/C Adjustment:
• W/C Adjust Change Reason:
• W/C Benefit Status:
• Est W/C Balance at:
• Switch to Daily:
• Go to: if this selection is made, the REX screen will display

The WCRC screen allows Service Officers to manually adjust the balance of Working Credits and the accrual and depletion amounts. The amounts manually entered allow the system to calculate Working Credits based on these amounts.

The WCRC screen also shows the current balance of Working Credits and when the balance will reach the maximum provided there are no further changes in employment income.

The WCRC screen displays the following fields:

• Start Date:
• Component:
• Reason:
• Change:
• Amount:

The balance of Working Credits for past periods may have to be manually adjusted in cases where:

• a limiting date has been applied, preventing system recalculation
• the customer's record has a manual rate override
• an appeal has occurred and the record requires an adjustment

Manual adjustments must be made for accrual and depletion amounts where the customer is in receipt of a manual rate of payment.

In these cases, the customer's record does not normally go through the rate calculator, therefore the accrual and depletion amounts must be recorded as a manual adjustment.

Once details are entered, these amounts will be used by the Working Credit system rate calculator to determine the new Working Credit details at the date of effect.

A manual balance of Working Credits applies only to the day it is entered.

Manual Working Credit accrual and depletion amounts apply continuously from the start date until a new entry is added to change to an automatic system generated amount.

Automatic Working Credit accrual and depletion amounts can apply with a manual balance of Working Credits.

A manual override entered will take precedence over any system calculated value.

The WCRC screen allows details to be entered which will override the system generated amounts, allowing the following:

• recording a new balance of Working Credits at a particular date
• recording a new ongoing accrual amount
• recording a new ongoing depletion amount
• changing these amounts back to a system generated amount

The WCRC screen is not part of any screen flow processing as it is optional to complete a manual rate and should only be used in limited cases.

When the WCRC screen has never been updated, it displays:

• a current balance of credits
• if there is an ongoing accrual or depletion amount
• when the customer will reach the upper/lower limits

Immediately below the customer header, a message line displays only if there is a continuous accrual or depletion into the future based on current information.

Where there is continuing:

• accrual, the message displayed will be 'Without further change W/C Balance will reach maximum balance on DD MMM YYYY'
• depletion, the message displayed will be 'Without further change the W/C Balance will deplete to zero on DD MMM YYYY'

The Balance: field is a display derived from the customer's actual circumstances and is a protected field.

When the WCRC screen has been previously updated, a line will appear for each entry. The standard action field is available to 'C'orrect or 'D'elete a previous entry.

Note: 'D'elete is only used if this line should never have been coded.

For the Start Date: field, code:

• the date of commencement of the manual adjustment, or
• the date an adjustment is returning to auto calculation

The Component: field is the part of Working Credit that is being manually adjusted. The valid codes are:

• ACC = Working Credit accrual
• BAL = balance of Working Credits
• DEP = Working Credit depletion.

The system will expand the code to the full literal.

The accrual amount and balance of Working Credits can be updated on the same date, as can the depletion amount and balance of Working Credits. Depletion and accrual amounts cannot be updated for the same date.

The Reason: field displays the reasons a Working Credit component may be manually adjusted. This field is completed where a manual change is required.

Valid codes are:

• MAN - manual rate
• SYS - system requirement
• APL - appeal
• LID - limiting date
• TFR - benefit transfer

The Change: field is coded to direct the system to calculate the Working Credit component automatically or if this is a manual calculation.

The valid codes are:

• AUT - automatic
• MAN - manual

The Amount: field is coded with the fortnightly amount to which the Working Credit component is to be manually adjusted. It is only coded if the amount is being manually calculated. An amount is not entered if the Working Credit is to be changed to an automatic system calculation.

• Maximum Working Credit accrual is 48
• Maximum balance of Working Credits is 1,000 or 3,500 for Youth Allowance (YA)(job seeker) customers
• Maximum Working Credit depletion is equal to or less than the balance of Working Credit