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 are paid 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 employment suspension period. 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 12P as per existing processes.

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 have their payment cancelled. They will be sent 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:

• allow customers and their eligible partners to retain access to their Pension Concession Card (PCC) for up to 2 years
• 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.

Carers may be able to enter an extended suspension period for 26 weeks (6 months) instead of their Carer Payment (CP) cancelling. CP can be suspended where all of the following criteria have been met.

The carer:

• would have been cancelled due to:
• exceeding the 100 hour work limit (where they do not want to use respite or do not have enough respite days)
• exceeding the 100 hour work limit on an ongoing basis
• exhausting their respite or hospitalisation days and the absence is still temporary.
• having income from their employment or self-employment which reduces their rate to nil. For employment income, the employment income nil rate period is still applied and the 26 week suspension is starts from the date CP was reduced to nil
• is residing in Australia
• remains eligible for all other reasons

If the carer does not meet the above criteria or loses eligibility for another reason, such as exceeding the asset limit or no longer providing care, they are not eligible to enter the extended suspension period. In these cases, their CP is cancelled.

If the CP customer has exhausted the hospitalisation days, they can continue to use respite days to remain on payment. However, if the carer chooses not to, they may be eligible to enter the extended suspension period.

For more information about extended suspension periods for Carer Payment, including how to assess if a carer is eligible for suspension, see Cancellation or suspension of Carer Payment (CP) and Carer Allowance (CA).

If the CP customer has a partner who is working and receives Age Pension or Disability Support Pension (DSP), they may be eligible to enter the 2 year extended employment suspension period instead of the 26 week extended suspension period.

Carer Payment (CAR) customers who earn employment income can only access the 2 year extended employment suspension period if 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 employment 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 employment suspension period.

If a customer or partner were receiving HEAS loan payments prior to entering the employment income nil rate period, HEAS loan payments will automatically continue if they 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)

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

HEAS customers are only eligible for the income related suspension for the 26 week Carer Payment extended suspension periods.

HEAS customers are not eligible if they suspend for exceeding the 100 hour work limit, respite days or hospitalisation provisions as they are considered to have lost qualification for CAR.

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 want 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 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 became payable.

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, EAN and IPE, the relevant 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 because they have accessed the maximum suspension period, their payment cannot be restored and they will need to submit a new claim. The reason codes are:

• EAN - Earnings preclude payment (For DSP only)
• ESP - Extended employment suspension period
• EPP - Partner extended employment suspension period
• FTW - Return to work 30 hours per week-notified within 14 days (Note: RTW will appear on benefit status line when this code is used to suspend DSP)
• HBX - Caree hospital bank exceeded
• IPE - Employment/Self-employment income precludes payment (For CP only)
• OHH - Carer working more than 100 hours
• RBX - Caree respite bank exceeded

Additionally, customers cancelled EAL or FTY will not be able to have their payment restored after 2 years.