1.1.E.102 Employment income

Usage

This definition applies to all payments.

Definition

Employment income is income from remunerative work undertaken by the person as an employee in an employer or employee relationship. The defining aspect of this definition is the employer or employee relationship. This is the opposite concept of a person running a business, in which case, certain income and asset test concessions are available to discount their business income.

Employment income includes (but is not limited to):

  • salary
  • wages
  • commissions
  • employment related fringe benefits
  • bonus payments
  • supported wages
  • casual loading (i.e. loading paid to employees in lieu of leave entitlements), and
  • leave payments (including leave loading) when engaged in a continuing employer/employee relationship.

Employment income DOES NOT include:

  • profits, or any other income, from a business carried on by the person
  • superannuation pension payable to the person
  • a payment of compensation, or a payment under an insurance scheme, in relation to the person's inability to earn, derive or receive an income amount from remunerative work
  • comparable foreign payment, and
  • leave payments (including leave loading) when NOT engaged in a continuing employer/employee relationship.

Policy reference: SS Guide 4.3.1.20 Determining the rate of income for pensioners of age pension age from 20/09/2009, 4.3.3.20 Income from employment or independent contracting, 4.3.3.25 Employment income for pensioners of age pension age from 20/09/2009

Partner's income

Employment income of a partner attributed to a person (and vice versa) in the combined income test for couples retains its employment income character in the hands of the person. This includes employment income earned by age pension age people.

Explanation: Partners of age pension age recipients may have access to working credit that allows depletion of working credit in the presence of employment income, regardless of which member of the couple undertakes the employment.

Work bonus

From 20 September 2009 a work bonus applies to pensioners of age pension age (except PPS). An improved work bonus commenced from 1 July 2011. From 1 July 2019, the work bonus was expanded to include income from self-employment from gainful work, as well as employment income. Prior to 1 July 2019, only employment income was eligible for the work bonus.

Act reference: SSAct section 8(1) Income test definitions, section 8(1A) A reference in this Act to employment income …, section 8(1B) For the avoidance of doubt, if …, section 8(1C) For the purposes of subsection (1A), a leave payment …, section 1073A Employment income attribution over …, section 1073B Daily attribution of employment income, section 1073C Fortnightly or yearly expression of attributed …, section 1073AA Work bonus

Policy reference: SS Guide 3.1.11.20 Working Credit Accrual, 3.1.11.30 Working credit depletion, 4.3.3.10 General provisions for income from employment, 4.3.3.20 Income from employment or independent contracting, 3.1.15 Work bonus

Last reviewed: 6 May 2019