Unemployed eligibility for JobSeeker Payment (JSP) and Youth Allowance (job seeker) 001-03010010

For a customer to initially qualify for JSP or YA, they must be:

• unemployed
• not employed on a full-time basis as an apprentice or trainee (YA only)

Note: YA customers starting a full-time Australian Apprenticeship may still be entitled to YA subject to the income test, but not as a job seeker.

Customers who are employed or studying and are unable to undertake work or study due to a medical condition, illness or injury and have a job or study to return to may still be eligible for JobSeeker Payment.

For JSP/YA (job seeker), an unemployed person can be broadly described as someone who is without paid work. But not everyone who is without paid work is unemployed, and some people in paid work can still be considered unemployed for JSP/YA (job seeker). Determining whether a person is unemployed at a particular time will depend on several factors.

All of the customer's circumstances need to be considered in determining whether they are unemployed.

As per Section 595 of the Social Security Act 1991, discretion should be exercised when determining unemployment to encourage increased workforce participation, rather than providing a disincentive for people to increase their hours of work. The extent of a person's compliance with any applicable mutual obligation requirements can be useful in determining whether a person is genuinely committed to engagement in the labour market.

A person engaged in self-employment may be regarded as unemployed if:

• the activity is on a small scale and designed to supplement income, rather than as an alternative to wages
• the person invests capital in the business, but not time or effort
• the business is a contracting or sub-contracting enterprise

If net income received from the business does not preclude payment and the customer can satisfy mutual obligation requirements based on their income and hours worked, a self-employed customer may receive payment and be considered unemployed. Job seekers with an Australian Business Number (ABN) are not automatically assumed to be self-employed. There is no requirement for customers with an ABN to have this cancelled to qualify for JSP or YA (job seeker).

Stand down

A stand down occurs when an employer is unable to offer an employee work for a short period of time, without having their employment terminated. Such a stand down could include a situation where a factory closes down for a few weeks over the Christmas holiday period or if a company has a short term lack of work. A customer who has been stood down is considered to be unemployed, even if the stand down is only temporary.

See Unemployed due to stand down.

Industrial action

Depending on the circumstances that has led to industrial action, a customer may not be qualified for payment and may be required to serve an exclusion period.

See Unemployed Due to Industrial Action (UDIA).

A person aged 55 or over may still be regarded as unemployed, even though they may be participating in voluntary work and/or part-time work to fully meet their mutual obligation requirements.

In some circumstances, such as when a customer is working casually, the Social Security Act 1991 allows them to continue to be considered unemployed even though they are not without paid work.

The duration of the employment, the hours worked and other relevant factors should be considered when determining whether a person can be deemed to be unemployed.

In general, a person working casually would not be regarded as unemployed if work in which earnings were sufficient to preclude payment of JSP/YA (job seeker) continued, or were expected to continue, for 12 weeks or more.

In general, full-time students are not considered to be job seekers and do not qualify for JSP/YA (job seeker) as they are not unemployed.

In most circumstances when a person is studying full-time, they should test their eligibility for a student payment.

To qualify for JSP/YA (job seeker), they should give up their studies or reduce their study-load to part-time, and should be willing to accept work if it is offered.

However, in certain circumstances a person studying full-time can qualify for JSP where they:

• have transferred to the payment from Disability Support Pension (DSP) or Parenting Payment (PP) as a single person and were receiving Pensioner Education Supplement (PES) at the time, provided they are continuing in the same course for which they were receiving PES, or
• are single principal carers receiving JSP and granted PES

JSP or YA (job seeker) are subject to normal mutual obligation requirements.

In some circumstances, a customer studying full-time can satisfy mutual obligation requirements when the study is treated as an approved activity. For:

• Jobseeker Payment see, Part-time or full-time study as an approved activity for JobSeeker Payment (JSP)
• Youth Allowance (jobseekers) see, Youth Allowance (YA) job seeker or Australian Apprentice returning to full-time study

A person who is on leave from their usual employment, whether paid or not, is not usually unemployed as their contract of employment is ongoing.

If the employer refuses to re-employ the person before the end of the leave, the leave is unpaid and no benefits are accruing while on leave, the person may be regarded as unemployed subject to mutual obligation requirements.

Note: the expectant mother exemption only applies from 6 weeks prior to the estimated date of birth and ends on the date of birth (whether or not the child is born alive). Expectant mothers should be encouraged to investigate their eligibility for Parenting Payment. See Exempting a job seeker from their mutual obligation requirements when they are an expectant customer.

JSP or YA job seeker in paid work may be considered unemployed if all of the following apply:

• the work is suitable work
• the work is less than 70 hours per fortnight
• income earned is less than the JSP income test taper cut off point

These customers are still required to meet mutual obligation requirements. However, they may have sufficient work to fully meet any job seeking obligations.

In addition, JSP or YA (job seekers) in paid work who are assessed as having a Partial Capacity to Work or who are principal carers, may be considered unemployed and qualified for payment if all of the following apply:

• the work is suitable
• the work is at least 30 hours per fortnight for a principal carer or at their assessed capacity for PCW
• income earned is at least equivalent to the national minimum wage but less than the JSP income test cut off point

These customers fully satisfy their mutual obligation requirements.

In this case, the following rules apply:

• Customers will remain current on payment if they:
• have a Working Credit balance greater than zero. They are able to use this to offset their employment income while remaining qualified for payment
• have not served a 26 week employment nil rate period
• Customers will remain qualified for payment until:
• they lose qualification for a reason not related to employment (for example, do not meet Australian residence requirements), or
• payments cease to be payable either because their working credits are reduced to nil, they reach the end of a 12 fortnight employment income nil rate period or because of a payability factor such as the assets test or a compensation preclusion period

Customers receiving Job Seeker Payment or Youth Allowance (job seeker) and who are part of the Youth Bonus Wage Subsidy (YBWS) initiative will be:

• able to access the 12 fortnight employment nil rate period, then
• be placed on a 26-week suspension period prior to their payment being cancelled due to income. For more information, see Youth Bonus Wage Subsidy 26 Week Suspension Period.

Customers who remain qualified without further mutual obligation requirements include:

• JSP and YA (job seeker) current customers who obtain full-time work may remain qualified for payment while in the employment income nil rate period
• JSP customers with a pensioner partner. The income test for these couples results in a higher cut-off point than for couples where both receive job seeker payment
• Long-term single JSP customers aged 60 years or more who receive Rent Assistance (RA). These customers also have a higher cut-off point which can exceed full-time minimum wages
• JSP single principal carers in full-time work can continue to be regarded as unemployed (despite being employed full-time) and continue to be entitled to part rate of payment due to the JSP single principal carer income test after all working credits have been exhausted