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

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).

3

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.

4

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.

5

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

6

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.

7

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

8

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

System limitations

From 1 July 2024, eligible customers may access up to 12 consecutive fortnights of nil rate before their payment cancels or suspends.

To reflect the change where a customer’s employment income precludes for 12 consecutive fortnights, they will cancel 12F (previously E6F).

Previously there was a system limitation which means that when a PP customer/partner was due to suspend/cancel due to employment income precluded for 12 consecutive fortnights and they had income coded as income in one period (IOP), the payment would not be suspended/cancelled if the customer/partner reports their income late.

For Parenting Payment Partnered (PPP) customers, check the Payment Summary (PS) screen to see if the customer:

• is on 12 consecutive fortnights of nil payment, and
• has employment income of IOP

A display on access DOC must be created in this instance– see Item 2 for details.

If the customer/partner reports late for the thirteenth fortnight (the income is too high for payment), do not code employment income as IOP. Code a frequency of 'DAY' using the Entitlement Period Start Day (EPSD) of the period in which the income was paid as the event date.

The amount to code is the declared employment income amount, represented as a daily figure.

Example: In the thirteenth fortnight where customer has been PPP/CZR for the previous 12 fortnights, and the customer/partner reports late. Customer/partner advises of earned income of $2800 paid for a 14 day period with a paid date of 16.10.2024. Customer’s Entitlement Period Start Day (EPSD) for the relevant period is 11.10.2024. The coding will be as follows:

• Date of Event: 11.10.2024
• Amount: $200
• Frequency: DAY

This coding will also allow the extension of Health Care Card and/or Pensioner Concession Card and Telephone Allowance entitlement to employment income affected customers.

For help to action a cancellation, see Cancellation of Parenting Payment (PP).

If any AGE instances are identified , staff should report this to ICT. This is because a manual SUS/CAN should not be applied from EPSD of the thirteenth fortnight, if customers are eligible to enter the Extended suspension periods for pension payments.

In all instances, follow current procedures to suspend/cancel payment manually from the EPSD of the thirteenth fortnight.

2

Example: DOA DOC

From 1 July 2024, eligible customers may access up to 12 consecutive fortnights of nil rate before their payment cancels or suspends.

To reflect the change where a customer’s employment income precludes for 12 consecutive fortnights, they will cancel 12F (previously E6F).

A Display on Access (DOA) DOC must be created warning Service Officers of the system limitation of Parenting Payment (PP) not cancelling correctly with reason '12F' when income precludes payment after their twelfth and final fortnight of the 'nil rate period' and the customer has not reported on time for the thirteenth fortnight.

See Display on Access DOCs for assistance with adding a DOA DOC:

• Reason: field - OTH
• Expiry date: field - the expiry date in the DOC should be two weeks after the Entitlement Period End Day (EPED) of the thirteenth and final fortnight of the nil rate period (97 days)

SUM: System fault preventing PPP CAN-12F at end of 12 f/n @ nil rate._______ _

TXT:

Record actioned on <date> regarding Parenting Payment

System fault preventing PPP CAN-12F at end of 12 f/n @nil rate

Please check payment for EPED <date>to ensure correctly CAN-12F. If__ _

cus/ptr reported this f/n & income is precluding and payment does not CAN-12F, escalate through mySupport - _

Note: the free text can be copied and dates changed.

• System limitation may prevent automatic suspension of PPP at end of 12 consecutive f/n at nil rate
• Staff must check the Entitlement Period End Day (EPED) of the thirteenth and final fortnight of the nil rate period to determine if manual workaround is required - see Resources - action needed due to system limitations
• If the rate of PP is more than $0 due to reduced income or cessation of employment, the standard IOP coding will correctly cancel 12F, or restart payment as needed

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