Paid work as an approved mutual obligation requirement 001-09070070

Some job seekers may be able to use paid work to meet their mutual obligation requirements. Others can volunteer to participate in paid work as an approved requirement.

Where the paid work approved requirement fully satisfies a job seeker's mutual obligation requirements, Services Australia must approve it, regardless of whether the job seeker is currently managed by Services Australia or their provider. For job seekers in Workforce Australia and the Community Development Program (CDP), Services Australia must negotiate this requirement. For Disability Employment Services (DES) participants in Post Placement Support program, their DES provider will update the Job Plan.

Paid work that meets the sufficient work test can be used to satisfy mutual obligation requirements for job seekers who:

• are principal carers
• have a partial capacity to work (PCW) of 15 hours or more per week, or
• are 55 years and over

The sufficient work test has two parts:

• the minimum hour's requirement, and
• the minimum remuneration requirement

A job seeker must meet both these requirements to satisfy the sufficient work test.

The sufficient work test requires these job seekers be:

• working at least 30 hours per fortnight, and
• earning equal to or above the national minimum wage for the minimum number of hours required - that is, 30 hours per fortnight at the national minimum wage, or
• employed in an occupation covered by an award, junior or trainee wage, the job seeker may be payable at a lower rate than the national minimum wage, if they are at least earning the applicable hourly award rate for their occupation for a minimum of 30 hours per fortnight

Job seekers with full-time mutual obligation requirements can also use paid work to fully satisfy their obligations, but the work must be at least 70 hours per fortnight, with income equal to or above the national minimum wage. These job seekers remain:

• connected to their Employment Services Provider
• provider managed

Job seekers with full time mutual obligation requirements who are working at least 70 hours per fortnight should be directed to discuss their paid work with their provider. Their Employment Services Provider will negotiate a new Job Plan to ensure the job seeker's level of paid work is taken into account. They may still qualify for payment depending on the income test applicable for their circumstances.

Job seekers with a partial capacity to work (PWC) or temporary reduced work capacity (TWRC) of between 23-29 hours per week are required to look for work or undertake work of 23-29 hours per week and will be required to accept suitable work within this range. However, can still satisfy their mutual obligation requirements by working at least 15 hours per week.

When a job seeker with part-time mutual obligation requirements has been declaring sufficient hours and earnings from employment to potentially fully satisfy their requirements, an activity and action item will automatically generate on their record. Service Officers must contact the job seeker and discuss the paid work to determine whether it can be approved as fully satisfying requirements.

Workforce Australia

If the job seeker's paid work is fully meeting their mutual obligation requirements, record the approved requirement on the Activity and Exemption Summary (AEX) screen.

If a job seeker with part time requirements is fully meeting their mutual obligation requirements through part time work, record the approved requirement on the Activity and Exemption Summary (AEX) screen. Do not update the AEX screen with the part time work approved activity if the job seeker has full time mutual obligation requirements and is working 70 hours or more per fortnight. These job seekers will remain provider managed.

The job seeker must lodge their Reporting Statement and declare their income to keep receiving an income support payment. The job seeker will be automatically suspended or exited (depending on the duration of their approved activity) from Employment Provider Services. However, if the job seeker would like to keep volunteering in Employment Provider Services, they would need to discuss this with their provider.

Note: some job seekers approved part-time work (PTW activity) requirement will be automatically updated if they:

• are a principal carer, and
• receiving Jobseeker Payment (JSP), Parenting Payment Single (PPS), or Youth Allowance (YA) (job seeker), and
• have declared in their last two consecutive fortnights that they worked at least 30 hours each fortnight

From 1 July 2024, providers can approve paid work as an activity that fully meets requirements. Once the provider has approved the activity, the job seeker will either be suspended or exited. These job seekers will be Centrelink managed and have a Centrelink Job Plan negotiated (except those in DES Post Placement Support).

Future commencement of employment

Job seekers who have an offer of employment that is expected to commence in the future may have a part time work approved activity recorded if:

• the job seeker can provide evidence from an employer confirming an employment offer of 15 hours per week or more, and
• the income expected to be received will meet the sufficient work test, and
• the expected start date is within 14 days

Activities can be recorded on the Activity and Exemption Summary (AEX) screen with a start date of up to 2 weeks in the future. If the job seeker is expecting to commence work in the future, consider the start date used when recording the approved requirement, as this could affect their ability to use self-service reporting. See the Process page.

Disability Employment Services (DES)

If the job seeker's paid work is fully meeting their mutual obligation requirements, they will be either suspended or exited from employment services. The approved requirement is recorded on the Activity and Exemption Summary (AEX) screen on the job seeker's record. Services Australia will negotiate a new Job Plan for DES participants except those participants in Post Placement Support. For those in DES Post Placement Support, the DES Provider will update the job seeker's Job Plan. The Process page contains information on how to determine a job seeker's current Placement Type.

DES participants receive ongoing and post placement support and will remain connected to their provider whilst undertaking PTW as an approved activity.

The job seeker is still required to lodge their Reporting Statement and declare their income to keep receiving an income support payment.

If the job seeker chooses to exit DES at any point, only after discussions are had with their DES provider, will Services Australia need to negotiate a new Job Plan.

If a job seeker is partially meeting their mutual obligation requirements, use the sufficient work test to establish the additional hours of work needed to fully meet their requirements. This is determined as follows:

• where the amount earned is already sufficient to meet the remuneration test, the person will need to do, or look for, at least the number of hours needed to increase their employment to the minimum number of hours, or
• where the amount earned is insufficient, the person will need to look for, or do, the additional number of hours needed to meet the remuneration requirement

See Resources for examples.

Note: for principal carers with a dependent child who receive Jobseeker Payment (JSP), Youth Allowance (YA) or Parenting Payment Single (PPS), activities and other mutual obligation requirements should be scheduled to occur during school hours (that is, generally between 9 am and 3 pm during school terms) unless otherwise requested or agreed by the principal carer.

For ministers of religion who are either a principal carer of a dependent child or a person assessed as having a partial capacity to work (PCW) and are doing at least 30 hours of paid pastoral work a fortnight for their religious order, the amount of remuneration received does not have to be at the national minimum wage. These job seekers are fully satisfying their mutual obligation requirements and are not required to meet the sufficient work test.

Ministers of religion are to provide evidence annually to verify they are working 15 hours per week of paid work for their religious organisation. When the evidence is provided, the Service Officer records a Display on Access (DOA) DOC stating, 'job seeker is a minister of religion doing paid work for their religious organisation. They are not required to meet the sufficient work test.'

Connection to an Employment Services Provider for principal carers or job seekers with a PCW who are ministers of religion is voluntary whilst they are doing sufficient work to meet their participation requirements. However, a Job Seeker Registration Only (JSRO) registration should be done.

If the job seeker does not fully meet their mutual obligation requirements through paid work, they can do another approved activity combined with their paid work.

For most job seekers, Services Australia can only approve combinations of activities that include an employment component, that is, paid work and self-employment, or, in the case of mature age 55+ job seekers, employment and voluntary work combinations. Any other combination of approved activities, like paid work and part-time study, must be negotiated between the job seeker and their Employment Services Provider.

Providers only can approve an eligible job seeker who is fully meeting their mutual obligation requirements if they are participating in a variety of paid work combination activities. For more information, see the Process page.

For principal carers, Services Australia can approve a combination of approved study and suitable paid work or self-employment and paid employment (part-time work) where activities total a minimum of 30 hours per fortnight.

Regardless of when the income is paid and/or received, for commission work to satisfy the activity test the:

• affecting income must satisfy the income test, and
• hours worked must satisfy the sufficient work test

Income provided by a partner to a member of a couple who is receiving a social security payment, does not meet the definition of income under the Social Security Act (1991).

For example, a principal carer being paid by their current partner to provide childcare to their own children would not be regarded as meeting requirements.

However, a principal carer who engages in a viable family day care business and cares for other children in addition to their own may have this activity assessed for meeting mutual obligation requirements.

Similarly, a job seeker who is employed by, and gets income from, a business where their partner engages in that business may have this income included and the activity assessed for mutual obligation requirements. Centrelink managed job seeker will be interviewed by a Service Officer and negotiate an appropriate Job Plan.

Sometimes a job seeker may not complete the specified hours or earn a sufficient level of income to satisfy their requirements for the fortnight.

Strict limits apply as to how often a reasonable excuse can be accepted before their current Job Plan is renegotiated.

However, this does not prevent assessment of the job seeker's circumstances and deciding that an exemption from the requirements is acceptable under any of the approved categories.

For details on acceptable responses as to why a job seeker may not have met the requirements of their Job Plan, see Table 2 on the Process page.

Refer the job seeker to an Employment Services Provider if the job seeker:

• has given a reasonable excuse for the previous two consecutive fortnights, and
• has been handed off for not meeting at the third consecutive fortnight

Continuously failing to meet the approved activity requirements, means the job seeker can no longer have part-time work as their activity. The Process page contains information on circumstances and coding instructions.

Where a holiday or a break that is outside the control of the job seeker, of less than 4 weeks occurs during an activity, there is no need to adjust the job seeker's requirements.

However, if the break is more than 4 weeks then the person must participate in other approved activities, like job search, for the period of the break. The job seeker will become provider managed and enter a new Job Plan.

• Casual part-time work: Principal carers and job seekers with a PCW of 15 hours or more per week whose requirement is casual part-time paid employment, must do other approved activities, especially job search, for any fortnight in which the 30 hours part-time work requirement is not met. This includes breaks or holidays in casual part-time work that are beyond the control of the job seeker
• Permanent part-time work: Principal carers and job seekers with a PCW whose requirement is permanent part-time paid employment are not required to do other activities during a break or holiday, if their basic rate of income support does not increase, and they get the same amount of employment income during the break
• Principal carers who have approved activities of paid work or study and paid work (combined) may be subject to the Allowable Break provisions over Christmas school holiday periods if the employer has a temporary closures or reduces hours or shifts

Paid leave from a position is treated the same as paid work. A person on leave without pay is not regarded as working.

For the purposes of the sufficient work test, a job seeker on leave is regarded as working the same number of hours as suggested by their leave payment rate. For example, a job seeker on leave payment rate:

• full-pay, is regarded as undertaking their normal full-time work hours
• half-pay, is regarded as undertaking half their normal work hours

The way job seekers report their employment income changed when the Social Security Income Assessment Model (CAM) came into effect on 7 December 2020. Before the implementation of CAM, job seekers reported their gross employment income earned and hours worked during their relevant Centrelink entitlement period. This reporting method enabled the national minimum wage component of the sufficient work test to be determined for job seekers undertaking a part time work approved activity from the income earned and hours worked in the relevant reporting period.

From 7 December 2020, job seekers now report the gross employment income they were paid, and hours worked in their relevant reporting period. So, the agency system is no longer able to determine whether a job seeker using part time work to meet their mutual obligation requirement has met the national minimum wage (remuneration) component of the sufficient work test when they report. This is because of the disconnection between the hours worked and the employment income declared under current income assessment mode, that is, the income amount paid may not align with the actual amount earned or the hours worked during the relevant reporting period.

The Report Employment Income (REI) process now uses the hours declared only, to determine whether the sufficient work test has been met. Job seekers in a part time work approved requirement who declare less than 30 hours per fortnight worked are subject to the reporting drop through process to discuss their employment circumstances and to determine if they have met their mutual obligation requirement. As the REI workflow can no longer determine if the income paid meets the remuneration component of the sufficient work test, the drop through process is no longer used for this component of the sufficient work test check.

When contact happens with a job seeker participating in a part time work approved requirement, Service Officers should review the recent reporting declarations to determine if the job seeker continues to meet their part time work approved requirement where possible. Job seekers should also be reminded of the requirement to advise of a change in their circumstances if their income from paid employment reduces to below the national minimum wage. See the Resources page for more details about the national minimum wage.