Financial suitability test for suitable work for principal carers 001-09140010

Principal carers subject to compulsory mutual obligation requirements are required to seek sufficient work of at least 15 hours per week (unless exempted from this requirement for a period) and to accept a job offer of suitable paid work up to 15 hours per week.

If these job seekers do not accept offers of suitable work to meet their sufficient work requirements without a 'reasonable excuse', they are failing to comply with their mutual obligation requirements and may be subject to a compliance action resulting in a loss of payment.

However, a principal carer of a dependent child is not required to accept an offer of suitable work or continue in a job which does not make them financially better off by $50 or more per fortnight compared to not doing the job. This is a net figure and is calculated after allowable deductions for taxation, travel, child care, public housing rent increases and disability costs (if the principal carer also has a Partial Capacity to Work) are taken into account.

This Financial Suitability Test (FST) should only be applied after all other suitability issues have been considered. For example, if it is clear that the cost of travel makes the job unsuitable, then a test of financial suitability is not required.

Job seekers may ask for this test to be applied at any time as long as they can provide the appropriate supporting information and documentation. The FST is a point in time test, which takes into account any working credit that is available to the job seeker. If the job seeker thinks their financial circumstances will be adversely affected when their working credit has expired, the FST must be re-run at that point according to the job seeker's request. This may be several weeks after the work has commenced.

If the job seeker has a partner and the partner's income changes, or their income support payment changes, this will not affect the calculation of the maximum notional entitlement for the job seeker requesting the FST. For example, the partner increases their employment and, as a result, their income support payment reduces, at the same time the job seeker is offered work. The FST is calculated using the job seeker's maximum notional entitlement regardless of the partner's maximum notional entitlement.

The test should be applied by an APS3 or above who will document the calculation and outcome on the job seeker's record.

This test may also form part of a compliance investigation for refusing to accept a suitable job offer. Employment Services Providers or job seekers with on-line access may apply this test independently.

The Centrelink/Family Assistance/Child Support/Child Care Estimator is the tool used for this calculation. The FST can be run from the results page if the 'Compare Centrelink rates only' option is selected when starting the rate estimator.

• When a job seeker is already working and is offered the opportunity to take up more work - either by increasing their hours with the current employer, or commencing an additional job - the rate estimator needs to compare the situation of zero employment income with the proposed new income. In this situation, the proposed new income is the total of any current employment income plus the anticipated additional employment income. Each job in itself does not need to make the job seeker at least $50 better off. The test is to see if the job seeker is better off overall when other costs such as travel and childcare are taken into account
• When a job seeker is already working and wishes to decrease their work:
• if the job seeker is reducing their current hours, the rate estimator needs to compare the situation of zero employment income with the proposed new reduced employment income, to see if the job seeker is still $50 better off overall
• if the job seeker is ceasing employment completely, the rate estimator compares the current employment income with the proposed zero employment income

Job seekers who are currently working may wish to compare one job against another. Job seekers should be encouraged to access the external version of the Centrelink/Family Assistance Rate Estimator if they have access to the internet. If the result of the FST indicates that the job seeker is not $50 better off per fortnight, the exact amount of the net increase or decrease will not be displayed, only a general message.