Liquid Assets Waiting Period (LAWP) 106-05020040

The LAWP is the period a person must wait before being paid an allowance if they have funds above the maximum reserve:

on the day after the date they ceased work or study, or

on the date of claim or qualification

The LAWP only applies to customers applying for Austudy, JSP and YA. The LAWP is between 1 and 13 weeks, applied as 'whole weeks'.

The maximum reserve is the allowable amount of liquid assets a customer can have before the Liquid Assets Test is applied. The maximum reserve amount is used to calculate the LAWP.

The liquid assets maximum reserve:

for single people with no dependent children is $5,000

for couples, or customers with dependent child/ren, is $10,000

To calculate a LAWP, assess the total amount of liquid assets. Then, if the customer is:

a member of a couple, and/or has a dependent child, the LAWP is calculated by total liquid assets minus the maximum reserve amount of 10.000, divided by $1,000

single and does not have a dependent child, the LAWP is calculated by total liquid assets minus the maximum reserve amount of 5,000, divided by $500

The above calculations will give the number of weeks the customer must serve their LAWP. If the number calculated includes a partial week, round this number down to the nearest whole week.

Example:

Geoff is a single customer with no dependent children. He has liquid assets totalling $9,450.

$9,450 - $5,000 (maximum reserve) / $500 = 8.9 weeks. This is rounded down to 8 weeks.

As partial weeks are rounded down to the nearest whole week, a customer's liquid assets must be equal to or exceed the below amounts before LAWP is applied:

$5,500 for single customers, or

$11,000 for partnered customers or single customers with dependent child/ren

The Resources page has more examples.

For a member of a couple, liquid assets include those of the customer's partner. The References page links to the Social Security Guide LAWP definition, 1.1.1.l.50.

Customers affected by a waiting period for an income support payment may want to test their eligibility for a Low Income Health Care Card (LIC).

A Complex Assessment Officer (CAO) must assess loans to a private trust or private company and their liquid assets, see Identifying and making suitable referrals to the Complex Assessment Officer (CAO). The value of the liquid assets of the private trust or private company for LAWP purposes only, must be assessed based on balances as at the relevant start date of the LAWP, that is, date of claim, date last worked, date studies ended, or date of incapacity. The CAO does not need to adjust attributable assets based on the current balance. Where there are significant changes, the CAO should get an updated balance sheet to assess all the entity assets and liabilities as at the date of claim.

Non controllers - loans only

A loan from a non-controller is likely to be an 'at call' loan. That is, the lender can call on the borrowing entity to repay the loan and the borrower is obligated to repay it once a demand is made.

The entity:

does not need to have enough liquid assets to repay the loan

could borrow funds from another source, (for example, a bank) to repay the loan

must be able, in principle, to repay the loan to a creditor if, and when, it falls due

The entire amount of the loan is assessed as a liquid asset of the lender. The liquidity of the loan does not take into account the financial position of the borrowing entity.

In some circumstances, the loan may be assessed as a failed loan.

Controllers with no loan - look at attribution only

The liquid asset amount is assessed using the customer's attribution percentage.

For example:

The customer is a 50% controller of the company

The liquid assets of the company are $2,500

The customer has 50% attribution of the company

The liquid assets amount assessed for the customer is $1,250

Controllers with a loan

When the entity has liquid assets less than the loan amount, the loan amount is used.

For example:

The customer has a $69,200 loan to the company

The customer is a 50% controller of the company

The liquid assets of the company are $8,000

The net assets of the company are not taken into account

The amount assessed for the LAWP for the customer is $69,200

When the entity has liquid assets more than the loan amount, the customer's attributed share is assessed up to the value of the remaining liquid assets.

For example:

The customer has a $69,200 loan to the company

The customer is a 50% controller of the company

The total liquid assets of the company are $80,000

The amount to assess for the LAWP is:

the full value of the loan amount of $69,200, and

50% of the remaining liquid assets ($80,000 - $69,200 = $10,800 x 50% = $5,400)

The total amount to assess is $74,600

Note: no offsetting of bills outstanding, etc. as per the normal LAWP rules/policy.

Amounts due to be paid by a former employer of the person is considered as a liquid asset.

This does not include amounts owed to a customer by a former employer with frozen assets due to bankruptcy or litigation. These are not considered able to be paid.

If a customer or their partner makes a gift or transfers liquid assets to a natural or adopted child within 4 weeks prior to claiming, include the asset in calculating the customer's liquid asset level.

This applies if:

the customer or their partner does not receive adequate consideration in money, or money's worth, for their transfer, or

the Service Officer is satisfied that the main purpose of the transfer was so the customer could obtain JSP, YA or Austudy

For sales completed from 1 January 2023, staff should disregard the proceeds from the sale of a home for up to 24 months, (with an extension of up to 36 months in some circumstances), see Sale of principal home.

For sales completed before 1 January 2023 staff should disregard the proceeds from the sale of the home for up to 12 months (with an extension of up to 24 months in some circumstances).

This applies when the:

property was the customer's residential home, and

proceeds of the sale will be used to buy another home to live in within 12 months from the date of sale

The proceeds are disregarded from the date of sale.

A portion of the proceeds of the sale that will be used to buy a home within 12 months with an extension of up to 24 months total in some circumstances are exempt from:

the liquid assets waiting period calculation, and

assets test

However, the full amount from the sale will still be deemed to be earning interest. This will be used in any income test calculation.

The Resources page has an example.

A customer or their partner can make one voluntary payment on a debt or a number of debts after becoming unemployed or incapacitated, with the non-compulsory amount/s being disregarded in calculating the customer's liquid asset level.

This applies only if:

the debt is not related to the principal home or any other residential property

the payment is voluntary (more than the minimum payment), and

the payment is the first voluntary payment made on that debt since the customer became unemployed or incapacitated

For example:

The customer has an outstanding credit card balance of $2,000

The minimum payment is $25

The customer pays the balance in full

The assessment of their liquid assets is reduced by $1,975.

The payment can still be disregarded if the customer makes the payment while serving a LAWP, that is, after the claim is processed. In this case, the claim may need reassessing to reduce the length of the LAWP.

A one-off debt payment cannot be disregarded if the payment is made after the LAWP has been served. In this case, there is no need to reassess the claim.

Given the voluntary nature of these payments, they are not considered unavoidable expenditure. However, they can be considered as reasonable costs of living if they, and any other reasonable costs of living, do not exceed the upper limit. For a definition of upper limit, refer to Social Security Guide, 1.1.U.20 on the References page.

Where a self-employed customer is holding net Goods and Services Tax (GST) liabilities, these amounts will be exempt when calculating the LAWP.

This means the net liability is the GST collected, less the input tax credits which are deducted from the amount payable to the Australian Taxation Office (ATO).

The customer must supply evidence of GST registration or the amounts will be included in the calculation of the LAWP.

The customer must supply evidence at the end of the payment quarter that the amount was paid to the ATO. If evidence is not supplied, an overpayment will be raised and debt recovery will start.

It is the customer's responsibility to provide evidence of GST registration if they want their net GST liabilities to be exempt from the LAWP calculation.

Note: GST liabilities are payable to the ATO 4 times a year. However, businesses can submit their GST liabilities weekly, monthly or as a quarterly payment. The ATO provides personalised payment books to businesses if they feel that they would prefer to use the weekly or monthly payment options.

Service Officers processing new JSP and YAL (job seeker) claims do not need to update the DLW/DCS/DPQ field and the LAWP Amount. The system will fill these fields on the NSA Start Date Calculator (NDC) screen in Process Direct using the information provided by the customer in the claim.

Note: do not adjust the LAWP Amount on the NDC screen if incorrect information has been recorded on another assets screen.

When making changes to any liquid assets advised by customer in the claim, this information auto updates in the LAWP calculation amount on the NDC screen.

If a Complex Assessment Officer (CAO) DOC is present, check if the LAWP amount needs to be adjusted on the NDC screen.

If the customer has investments in crypto currency, the LAWP Amount on the NDC screen will need to be adjusted to include the value of this investment. See Coding income and assets for Centrelink payments and services for information on how to assess the asset value of this type of investment.

Record the details of any changes on the notes section of the claim grant DOC.

Customers are not required to meet the mutual obligation requirements during the LAWP.

They are also not required to declare income, as it would have no effect on payment (unless the period of work is covered by the first income statement after the end of the LAWP). An employment income nil rate period cannot begin during a LAWP, as the customer's nil rate during the LAWP is not made up entirely or partly of employment income.

The LAWP can be waived where the customer is or will be in severe financial hardship and the money has been spent on unavoidable or reasonable expenditure.

If this is the case, customers should always provide proof. See Assessment of hardship for LAWP for job seekers, or Assessment of hardship for LAWP for Austudy and YA students.

A customer may be exempt from the LAWP in certain circumstances.

The details provided in a claim and the customer's legal declaration that it is correct and accurate is sufficient for verification purposes.

Customers do not need to provide verification, and staff should not request it, unless:

there is doubt about the validity of the information provided in the claim, and the Service Officer anticipates a different claim outcome

the balances declared in the claim indicate the customer may be experiencing severe financial hardship

If the customer is single and not incapacitated, the LAWP starts from:

The day after the person ceased work

The day after the person ceased to be enrolled in full time education or vocational training; or

The claim start date where the person has not previously worked or studied
Note: there is no time limit on this. The claim start date is only to be used when the customer has had no prior connection to employment or education, regardless of how long ago

If the customer is single and incapacitated, the LAWP starts on the date of incapacity for work.

If the customer is a member of a couple and incapacitated, LAWP starts on the latest of the following dates:

The date the person become incapacitated for work

If when the claim is made, the partner ceased work, from the day on which the partner ceased work,

If when the claim is made, the partner has ceased to be enrolled in a full time course of education or of vocational training, from the day after the persons partner ceased to be enrolled in full-time education or vocational training, or

If when the claim is made, the partner is incapacitated, from the date of the partner's incapacity for work

If the customer is a member of a couple and not incapacitated, the LAWP starts on the latter of the following dates:

The day after the person ceased work, full-time study, or date of incapacity

If when the claim is made, the partner has ceased work, from the day after the person's partner ceased work

If when the claim is made, the partner has ceased to be enrolled in a full time course of education or of vocational training, from the day after the persons partner ceased to be enrolled in full-time education or vocational training

If when the claim is made, the partner is incapacitated, from the date of the partner's incapacity for work, or

The claim start date where neither the person nor their partner has previously worked or studied.
Note: there is no time limit. Only use the claim start date where the customer or their partner has no prior connection to employment/education, regardless of how long ago

If a customer is still working casually or part-time when they claim JSP, the Service Officer must decide the date the customer is deemed to be unemployed. This is usually the date on which the last change to that particular employment occurred.

The LAWP can be self-served in part or in full. When a claim for JSP is made after the LAWP would have expired, the customer is deemed to have served a LAWP and the LAWP is completed.

This self-served LAWP is considered a served and completed LAWP when the recipient makes another claim in a 12-month period. They are not required to serve another LAWP.

If the customer is single and not incapacitated, the LAWP starts from the day the person becomes qualified for YA. This date also applies to single and not incapacitated customers who have no prior connection to employment or education.

If the customer is single and incapacitated, the LAWP starts from the day the person became incapacitated.

If the customer is a member of a couple and incapacitated, the LAWP starts:

The day the person become incapacitated for work,

If when the claim is made, the partner ceased work, from the day the person becomes qualified for YA,

If when the claim is made, the partner has ceased to be enrolled in a full-time course of education or of vocational training, from the day the person becomes qualified for YA, or

If when the claim is made, the partner is incapacitated, from the day the person becomes qualified for YA

If the customer is a member of a couple and not incapacitated, the LAWP starts:

The day the person becomes qualified for YA,

If when the claim is made, the partner has ceased work, from the day the person becomes qualified for YA

If when the claim is made, the partner has ceased to be enrolled in a full-time course of education or of vocational training, from the day the person becomes qualified for YA,

If when the claim is made, the partner is incapacitated, from the day the person becomes qualified for YA, or

The claim start date where neither the person nor their partner has previously worked or studied.
Note: there is no time limit. Only use the claim start date where the customer or their partner has no prior connection to employment/education, regardless of how long ago

If all other qualification criteria have been met, the start day of the LAWP will be the date the student qualifies or requalifies for payment

The LAWP may be waived under an assessment of hardship for LAWP for Austudy and YA students

Australian Apprentices

The LAWP start date for Australian Apprentices will be the start of the Australian Apprenticeship.

YA and Austudy students

The LAWP start date for YA and Austudy students is the date they qualify or requalify for payment. This includes the date they start full time studies, meet the YA qualifying age and residency requirements.

Early claims

For students lodging an early claim before starting full-time or approved concessional load studies, the LAWP start date is the Student Start Date if they meet the residency/age requirements.

Continuing/intending students

For continuing/intending students, the LAWP start date will depend on their circumstances. If the student:

has been studying continuously and would have satisfied the activity test as a student for the whole period that they have studied, their qualification date would be the later of:

the date they started their first approved course, or

the date they first became qualified for their payment once they met the Australian residence, age and study requirements for their payment

was studying part-time in the previous study period, and they are intending to resume full-time study in the next available study period, their qualification day is the day after their part-time study ceased

Unapproved course becomes approved

For students studying an unapproved course (including an unapproved Masters course) that recently become approved, the LAWP starts from the date the course was approved.

Family Tax Benefit (FTB) child

For an FTB child who was:

a full-time secondary student

living with their parent/s, and

applying for YA

They will not meet the YA minimum age qualification requirements until one of the following occurs:

they turn 18 years of age

they complete their final year of secondary study or an equivalent level of qualification (the qualification day is the day after the day they complete these schooling requirements)

they are eligible for the away from home rate as a student

they can be considered independent for YA purposes as a student

the date that has been determined (generally by a Services Australia social worker) that they are no longer benefiting from FTB that is being paid to the young person's parent/s

In this case, the LAWP start date is one of the above qualification dates.

Under 22 year old YA claimant with a future student start date

YA claimants can claim YA as a job seeker if they:

are under 22 years of age

have ceased work in the previous 13 weeks, and

are not commencing full-time study immediately after ceasing work

If eligible, the LAWP will start from that eligibility date, rather than the date the claimant becomes a full-time student.

Note: serving the LAWP earlier may be more beneficial for the young person.

The LAWP can be self-served: the student lodges their claim for allowance after the LAWP would have expired.

If the student voluntarily surrenders their payment while serving a LAWP, reject the payment from the date of claim.

There is no provision under section 598 of the Social Security Act 1991 to reassess a person's LAWP and start date based solely on their change of circumstances from single to partnered or vice versa. However, a person can request a reassessment under subsection 598(5) if they are in severe financial hardship.