Defence Force Reserves as an approved activity 001-09070040

Customers receiving the following payments may be able to reduce or fully meet their mutual obligation requirements when undertaking Defence Force Reserve Training or Defence Force Reserve Service:

• all JobSeeker Payment (JSP), Youth Allowance (YA) (job seeker) or Special Benefit (SpB) recipients, who are principal carers and people assessed as having a partial capacity to work
• Parenting Payment (PP) recipients who have mutual obligation requirements

Note: job seekers who are not Principal Carers or do not have a Partial Capacity to Work can undertake Defence Force Reserves, but it will not fully meet their mutual obligation requirements. Job seekers who are Provider managed should discuss participation in Defence Force Reserves with their Provider who can advise what impact it will have on their mutual obligation requirements.

Defence Force Reserve Training or Defence Force Reserve Service must be recorded on the Activities and Exemptions (AEX) page before it fully meets mutual obligation requirements.

Customers participating in a Defence Force Reserves including training camp, or allied training, are considered to be fully meeting their mutual obligation requirements, will be Centrelink managed and must not have any job search requirement, for the duration of the requirement. There is no limit on the amount, start date or duration of training, provided the training is appropriately verified.

Services Australia can approve Defence Force Reserve Service as a requirement for Principal Carers and Partial Capacity to Work job seekers who are either Centrelink managed or Provider managed. If the agency approves a Provider managed job seeker's participation in Defence Force Reserves as fully meeting their requirements, the job seeker will be suspended from Employment Provider Services.

If Services Australia approves a Community Development Program (CDP) managed job seeker's participation in Defence Force Reserves as fully meeting their requirements, the job seeker will become CDP Centrelink managed and suspend from the CDP provider.

Defence Force Reserve Service can contribute to satisfying mutual obligation requirements, but may not meet all mutual obligation requirements. Participation in this activity can be approved by the customers' Employment Services Provider and may reduce their points target under the Points Based Activation system.

A training camp is a programmed camp or a related training requirement, and can include:

• induction and employment training courses for new recruits
• a compulsory annual camp, which can last between 2 and 4 weeks
• training courses, subsequent continuation or on-the-job training and other recognised training activities which can occur outside Australia
• the Defence Indigenous Development Program (DIDP) which is run in the Northern Territory. Participants remain qualified for income support, and they are considered to be fully meeting their mutual obligation requirements during the program. Participation in the DIDP should be treated the same as general Defence Force Reserve Training, and recorded as such on the AEX screen. DIDP is a 7 month residential program

Attendance at a programmed training camp or recognised training requirement is usually verified by the equivalent of a signed training notice or signal notice. Where a training notice is not issued, a reservist must produce authorised documentary evidence of the training requirement. If the requirement cannot be verified as training, it should be regarded as Defence Force Reserve Service.

• For reservists attending an annual training camp, Service Officers should sight a copy of the reservist's Parade Card or an instruction that outlines the dates of the camp
• For reservists attending a course, Service Officers should sight a Department of Defence Signal (notice) listing the details of the dates and times of the training and a list of people 'panelled' to attend the training. Usually, the signal only contains details of training courses included in the overall Training Command Schedule for the Defence Forces. Service Officers should be certain that the person is attending programmed training before approving the requirement as fully meeting their mutual obligation requirements

Reservists receive a daily allowance to cover their costs while in training. The amount of this allowance varies according to a reservist's rank and in what capacity they are serving (for example, an allowance could be higher for a period of time where the reservist is at a residential training camp). During the common induction training a recruit would receive an allowance of approximately $66 per day. This allowance is tax-free, and is not considered income under the Social Security Act 1991; therefore it is not assessed as income when calculating the customer's payment.

Reserve service is where a reservist receives tax-free salary paid on a daily rate. This Defence Force Reserve income is tax-free, and not considered income under the Social Security Act 1991. Therefore, it is not assessed as income when calculating the customer's payment, regardless of the number of hours of reserve service the customer is doing each fortnight, or the length of the customers reserve service. This applies to all job seeker payment types.

A customer will be considered to be undertaking continuous full-time service for social security purposes if the reservist's employment agreement with the Defence Force Reserves specifically states that the service is 'continuous full-time service'. Where a reservist is engaged under such an agreement, the reservist's income for their continuous full-time service is taxable and is not exempt from the income test. This applies regardless of the length of the customer's continuous full-time service, and applies to all customer payment types. This income from continuous full-time service will generally be assessable under the income test in the fortnight in which is it earned.

Customers on JSP, YA or SpB must remain 'unemployed' to continue to qualify for payment. Therefore, there are limitations on when, and for how long, Defence Force Reserve Service can be undertaken.

If a customer on JSP, YA or SpB commences continuous full-time reserve service, they are considered 'employed' and therefore no longer qualified for payment.

Additionally, if a customer on JSP, YA or SpB undertakes more than 12 weeks of reserve service in a 12 month period that is not 'continuous full-time service', but is for more than 35 hours per week, they are considered 'employed'. In this situation, payment must be cancelled once the limit of 12 weeks at 35 hours or more per week has been exceeded.

Reserve service of 35 or more hours per week should only be approved to meet the mutual obligation requirement for customers who have been on payment for 3 or more months. This is to avoid the possibility of reservists leaving paid work to attend full-time reserve service and claim payment in order to take advantage of this policy. This means that customers who are cancelled due to exceeding the 12 week limit or commencing continuous full-time reserve service must reclaim payment and wait for 3 months before reserve service of 35 or more hours per week will be approved again.

In the event that a customer commences Defence Force Reserve Service of 35 hours or more per week before the 3 month waiting period is served, their payment must be immediately cancelled.

Principal carers who are engaged in regular paid reserve service of:

• 30 or more hours per fortnight, are considered to be fully meeting their mutual obligation requirements
• less than 30 hours per fortnight, will have their mutual obligation requirements determined by either the agency or their Employment Services Provider according to who is managing the job seeker

Qualification for PP is not dependent on the customer being considered unemployed, so PP customers who undertake any amount of reserve service, including full-time service, can remain on PP. There are no limitations on how long a customer must be in receipt of PP before reserve service can be approved as meeting their mutual obligation requirements, or for how long they can undertake reserve service in any 12 month period.

Any income received from reserve service will be exempt from the income test, unless it is from continuous full-time reserve service.

PP customers who are engaged in reserve service of:

• 30 or more hours per fortnight, are considered to be fully meting their mutual obligation requirements and will not have any job search requirements
• less than 30 hours per fortnight, will have their mutual obligation requirements determined by either the agency or their Employment Services Provider according to who is managing the job seeker

Whether the reserve service is of a continuous full-time nature does not impact on whether the requirement fully meets mutual obligation requirements for PP customers. This only affects whether the income is exempt or not.

If a customer is undertaking either full-time or part-time reserve service, they must contact Services Australia or their provider to have their details updated and income recorded (if full-time continuous service).