Extended suspension periods for pension payments 102-22121442

Age Pension customers can have their payment suspended for up to 2 years instead of cancelled if they earn employment income (from work other than self-employment) that precludes them from payment for more than 12 fortnights in a row (the employment income nil rate period). This is called the ‘extended employment suspension period’. The suspension is applied automatically at the end of the employment income nil rate period and should not be manually coded.

Disability Support Pension (DSP) customers can have their payment suspended, or ‘cancelled deemed suspended’, for up to 2 years for a valid return to work reason. This applies when the customer notifies the agency of their work and either:

• earns employment income that precludes them from payment for more than 12 fortnights in a row, or
• works 30 or more hours per week on an ongoing basis

If an Age Pension or DSP customer in an extended suspension period has a partner, the partner may also have their payment suspended if their rate is also reduced to nil due to the customer’s employment income. The suspension is applied automatically at the end of the employment income nil rate period and should not be manually coded. This only applies if the partner receives one of the following payments:

• Age Pension (AGE)
• Disability Support Pension (DSP), or
• Carer Payment (CAR)

It also includes the following payments from the Department of Veterans’ Affairs (DVA):

• Age Pension (AGC)
• Income Support Supplement (ISS)
• Invalidity Service Pension (DVA)
• Veteran Payment (VEP)

Note: if only one member of the couple receives a pension payment, and that member of the couple is not earning any employment income, they are not entitled to the extended suspension. Instead, if the non-pension member of the couple’s employment income is high enough to preclude the pension customer from receiving a payment for the entire employment income nil rate period, the pension customer’s payment will cancel for reason 12F or 12P as per existing processes.

Both the customer and their eligible pension partner (if applicable) can keep their Pensioner Concession Card while in the extended suspension period.

Eligible customers can also request a restoration of their payment at any time within the 2 year period.

Once the 2 year suspension period ends, the customer (and partner, if applicable) will receive a letter advising them their payment has been cancelled. The letter will tell them to use the Payment and Service Finder if they need to claim another payment or get more help.

The purpose of the extended suspension periods is to:

• promote workforce participation, and
• enable customers to return to payment quickly and easily if they stop working or reduce their hours within the 2 year period

While DSP customers have been able to access the return to work suspension period for many years, Age Pension (AGE) customers and eligible pension partners can access the employment income suspension period from 1 January 2023. The rules for applying a suspension varies between payment types, which is outlined further below.

Age Pension (AGE) customers can be suspended for up to 2 years if their total income, including their Australian employment income, precludes them from payment for more than 12 fortnights in a row. When the customer reports their employment income on the thirteenth fortnight of the employment income nil rate period, they are automatically placed into the extended suspension period if their rate of payment is still nil. The suspension reason code is ESP. Staff must not code this suspension manually.

If the customer has a partner who receives AGE, DSP or Carer Payment (CAR), they are automatically placed into the extended suspension period if their payment has also been reduced to nil rate due to employment income. The suspension reason code is EPP. Staff must not code this suspension manually.

DSP customers can be suspended, or cancelled deemed suspended, for up to 2 years if their employment income (combined with their partner’s employment income, if applicable), precludes them from payment. This does not have to be solely due to employment income earnt in Australia. They can earn employment income from any location. When the customer reports their employment income on the thirteenth fortnight of the employment income nil rate period, they are automatically placed into the extended suspension period if their payment is still nil rate. The suspension reason will be EAN. Staff must not code this suspension manually. If a customer reports their income late, their payment may be cancelled deemed suspended for reason code EAL (which is coded manually).

DSP customers can also have their payment suspended if they work 30 or more hours per week in open employment on an ongoing basis. This requires assessment by a Service Officer, who manually suspends the customer’s DSP if appropriate. The reason code is FTW or FTY.

If the customer has a partner who receives AGE, DSP or CAR, the partner is automatically placed into the extended suspension period if their payment is also nil due to employment income. The suspension reason code is EPP. Staff must not code this suspension manually.

Carer Payment (CAR) customers who earn employment income cannot access the extended suspension period unless they also have a partner receiving AGE or DSP who is also earning employment income. They may also access the extended suspension period if they are not earning any employment income but have a partner on AGE or DSP who is earning employment income.

In both cases, they are automatically placed into the extended suspension period if their rate of payment is reduced to nil due to employment income. The suspension reason code is EPP. Staff must not code this suspension manually.

Customers are entitled to continue receiving their HEAS loan payments while in the extended suspension period if before entering the employment income nil rate period the customer or partner were receiving:

• a loan payment (including HEAS Advances), under the Home Equity Access Scheme (HEAS), and
• a regular pension payment (that is, they are not considered to be a ‘HEAS only’ customer)

HEAS loan payments will automatically continue.

If a customer is HEAS only, they are not entitled to the extended suspension.

Note: DSP customers suspended for reason FTW or cancelled (deemed suspended) FTY are not entitled to receive HEAS loan payments as they are considered to have lost qualification for DSP.

Customers can claim HEAS if they meet the HEAS eligibility criteria) while in an extended suspension period, but they must remain qualified for their payment. For example, if a Carer Payment customer is suspended for reason EPP, they must still be providing continuous care and meet all other eligibility for HEAS.

If an AGE or DSP customer in an extended suspension has a partner receiving DVA Age Pension (AGC), Income Support Supplement (ISS), Invalidity Service Pension (DVA) or Veteran Payment (VEP), the partner may also be entitled to the extended suspension period.

Additionally, if a customer getting one of the 4 DVA payments is in an extended suspension period, their partner may be able to be suspended if they receive AGE, DSP or CAR paid by Services Australia.

The suspension process for DVA customers is administered by DVA. Service Officers do not need to take any action.

In general, customers and partners in an extended suspension period are not required to tell us about any changes to their circumstances or respond to reviews. However, there are some exceptions, including:

• If one or both members of the couple have a current Residential Care Assessment and there has been a change to their income or assets
• If the customer or partner receives another payment, such as Carer Allowance or Family Tax Benefit
• Outstanding identity reviews
• Child to adult transfer issued to a Carer Payment partner
• Lower ADAT reviews
• Risk based reviews where the customer or partner is receiving a HEAS loan

In many cases, customers can still update their circumstances in their Centrelink Online account. However, this will not automatically result in a reassessment of their payment. Customers must request a restoration if they wish to test their eligibility for restoration.

If a customer contacts to advise they have stopped work or are working less, the Service Officer must ask if they want to check if their payment can be restored.

A customer and their pension partner (if applicable) can request a restoration of their payment at any time during the 2 year extended suspension period. To do this, they can contact us on their regular payment line, or visit a service centre, and ask for their payment to be restored.

The restoration date of effect is the date the customer or eligible pension partner contacts and requests a restoration. It is not the date the customer stopped working.

Note: both the customer and partner must each request a restoration of their respective payment (unless a nominee arrangement is in place that allows one member of the couple to also request a restoration for the other member of the couple).

As it may have been up to 2 years since the customer or partner (if applicable) provided updated information, Service Officers must check for any change in circumstances, such as a new address or changes in assets.

For the suspension reasons ESP, EPP and EAN, the 2 year suspension period starts when the customer (and their pension partner, if applicable) begin the employment income nil rate period.

For the FTW suspension and EAL and FTY cancellation (deemed suspension) reasons, the 2 year suspension period starts from the suspension (or cancellation deemed suspension) date of effect and not the start of the employment income nil rate period (if there was one).

Once a customer’s payment has been cancelled for reason ESP, EPP or FTW, their payment cannot be restored and they will need to submit a new claim. Additionally, customers cancelled EAL or FTY will not be able to have their payment restored after 2 years.