3.1.2.20 Liquid assets test waiting period
Summary
The LAWP applies to ALL YA, Austudy, JSP and SA recipients whose liquid assets (1.1.L.50) exceed a specified amount. Some payments may have other provisions that exempt a person from the LAWP in some circumstances. These provisions are explained in the specific payment topic. The LAWP can vary from 1 to 13 weeks in duration depending on:
- the amount of the recipient's liquid assets, AND
- whether they are a member of a couple (1.1.M.120), AND
- whether they have dependent children (1.1.D.70).
The rest of this topic explains the following about the LAWP:
- the payments it applies to
- when it commences
- the duration, and
- how it is calculated.
The treatment of some types of liquid assets is explained in 3.1.2.30.
Act reference: SSAct section 14A Social security benefit liquid assets test definitions, section 549A Liquid assets test waiting period (YA), section 575A Liquid assets test waiting period (Austudy), section 598 Liquid assets test waiting period (JSP), section 676 Liquid assets test waiting period (SA)
Payments the LAWP applies to
The LAWP applies to the following payments:
- jobseeker payment
- youth allowance
- austudy payment, AND
- sickness allowance (for a claim made before 20 March 2020).
Date of commencement for the LAWP
The following table indicates when the LAWP commences:
| If the recipient's status is … | then LAWP for … | |||
|---|---|---|---|---|
| jobseeker payment … | sickness allowance (claim made before 20 March 2020) … | youth allowance … | austudy payment … | |
| member of a couple - incapacitated |
commences on the latest of:
Act reference: SSAct section 598 |
commences on the latest of:
Act reference: SSAct section 676 |
commences on the day the person became incapacitated. Act reference: SSAct section 549B |
commences on the day the person became qualified for Austudy. Act reference: SSAct section 575B |
| member of a couple - not incapacitated |
commences on the latest of:
Act reference: SSAct section 598 |
is not applicable. |
commences on the day the person became qualified for YA. Act reference: SSAct section 549B |
commences on the day the person became qualified for Austudy. Act reference: SSAct section 575B |
| single - incapacitated |
commences on the day the person became incapacitated. Act reference: SSAct section 598 |
commences on the day the person became incapacitated for work or study. Act reference: SSAct section 676 |
commences on the day the person became incapacitated. Act reference: SSAct section 549B |
commences on the day the person became qualified for Austudy. Act reference: SSAct section 575B |
| single - not incapacitated |
commences on the day after the person ceased work or ceased to be enrolled in full-time education or vocational training. Act reference: SSAct section 598 |
is not applicable. |
commences on the day the person became qualified for YA. Act reference: SSAct section 549B |
commences on the day the person became qualified for Austudy. Act reference: SSAct section 575B |
| single - not incapacitated for work, and has no prior connection to employment or education |
commences on the day the person became qualified for JSP. Act reference: SSAct section 598 |
is not applicable. |
commences on the day the person became qualified for YA. Act reference: SSAct section 549B |
commences on the day the person became qualified for Austudy. Act reference: SSAct section 575B |
If a recipient is still working casually or part-time when they claim JSP, the delegate must decide when the recipient is deemed to be unemployed. This will usually be the date on which the last change to that employment occurred.
Example: A change in the hours worked or a change from full-time to part-time.
The LAWP can be self-served in part or in full. Where a claim for an allowance is made after the LAWP would have expired, the recipient is deemed to have served a LAWP and the LAWP is completed. This self-served LAWP is considered a served and completed LAWP where the recipient makes another claim in a 12-month period, and therefore the recipient is not required to serve another LAWP.
The LAWP and any non-compliance deferment or rate reduction period resulting from a failure are served concurrently. Any period remaining at the expiry of the waiting period would still need to be served.
Act reference: SSAct section 595 Persons may be treated as unemployed
Policy reference: SS Guide 3.11.14.10 Types of failures & penalties, 3.11.14.20 No show, no pay failures, 3.11.14.30 Participation payment suspensions, connection failures, non-attendance failures, reconnection failures & penalties, 3.11.14.40 Serious failures & penalties, 3.11.14.50 Compliance failures & penalties - general rules
Calculating the LAWP
The LAWP is calculated differently depending on whether the recipient is single or a member of a couple or has a dependent child. This is explained in the following table:
| If the recipient is … | then the LAWP is calculated by … |
|---|---|
| a member of a couple, AND/OR has a dependent child | liquid assets minus the maximum reserve amount (see below), divided by $1,000. |
| NOT a member of a couple AND does NOT have a dependent child | liquid assets minus the maximum reserve amount (see below), divided by $500. |
From 1 July 2013 the maximum reserve amounts are:
- $10,000 for a recipient who is a member of a couple AND/OR has a dependent child, and
- $5,000 for a recipient who is NOT a member of a couple AND does NOT have a dependent child.
Note: If the recipient is a member of a couple, the recipient's liquid assets includes those of their partner as per the definition of liquid assets provided in 1.1.L.50.
Policy reference: SS Guide 1.1.L.50 Liquid assets
Historical reserve amounts
The following table shows the historical reserve amounts.
| Date | Reserve amount |
|---|---|
| 01/02/1991 - 19/09/1997 | The LAWP provisions commenced on 1 February 1991, through the Social Security Legislation Amendment Act 1990. Initially, the LAWP was for a set duration of 4 weeks if the recipient's liquid assets exceeded the reserve amount. The reserve amounts were set at:
|
| 20/09/1997 - 01/04/2009 | From 20 September 1997, the LAWP provisions were amended so that the length of the LAWP, in weeks, was calculated by dividing the amount by which the recipient's liquids assets exceeded the reserve amount by $1000 for a member of a couple/carer of a dependent child, or $500 for a single person.
The maximum LAWP was limited to 13 weeks, and fractions of weeks were rounded down to the nearest whole week. Also from 20 September 1997, the reserve amounts for the LAWP were reduced to:
|
| 01/04/2009 - 31/03/2011 | For the period 1 April 2009 to 31 March 2011, the reserve amounts were temporarily doubled in response to the global recession. The maximum reserve amount between these dates was:
Recipients who were already serving a LAWP on 1 April 2009 had their waiting period recalculated using the temporary maximum reserve amount. Recipients who began serving a LAWP on or before 31 March 2011 and continued to serve it after that date did not have their waiting period recalculated. |
| 01/04/2011 - 30/06/2013 | For this period the reserve amounts returned to what they were prior to the temporary increase of 1 April 2009 of:
|
| 01/07/2013 - current | From 1 July 2013, the reserve amounts were doubled to:
|
Act reference: SSAct section 14A Social security benefit liquid assets test definitions
Duration of LAWP
The result of the calculation is the duration of the LAWP, as explained in the following table:
| If the result is … | then the LAWP is … |
|---|---|
| 13 or more whole weeks | 13 weeks. |
| less than 13 whole weeks | the whole number of weeks, with fractions rounded down to the nearest whole week. |
| less than 1 week | not served at all. |
Income from the FEG
Payments made as a consequence of redundancy may be assessed as a liquid asset for new claims.
Policy reference: SS Guide 4.3.3.70 Income from the Fair Entitlements Guarantee (FEG)
Waiving the LAWP
The LAWP may be waived in full or in part when the recipient is in severe financial hardship as a result of unavoidable or reasonable expenditure (1.1.U.20). A recipient's reasonable cost of living does not have to be justified with receipts. The reasonable cost of living is an amount deemed by the delegate to be appropriate to the recipient's circumstances. The deemed amount cannot be exceeded. Reasonable costs of living cannot exceed the maximum rate of payment that the recipient would be entitled to.
Act reference: SSAct section 19C Severe financial hardship definitions
Policy reference: SS Guide 3.1.2.10 Application of waiting periods
Exemption from the LAWP
Recipients can be exempted from the LAWP as explained in 3.1.2.70.
Policy reference: SS Guide 3.1.2.70 Exemptions from waiting periods
Temporary exemption from the LAWP - Coronavirus (COVID-19) 25 March 2020 to 24 September 2020
As part of the response to the Coronavirus (COVID-19) outbreak, the LAWP did not apply from 25 March 2020 to 24 September 2020 for the following payments, JSP, YA and Austudy. A person already serving a waiting period at 25 March 2020 was not required to serve the waiting period and was backdated to the date of claim.
At the end of the exemption period, recipients did not have any remaining waiting period to serve.
Explanation: A LAWP did not resume for a person in receipt of JSP, YA, or Austudy at 24 September 2020.
At the end of the exemption period, the LAWP applies to NEW claimants from 25 September 2020.
Note - intent to claim: The liquid assets test waiting period would not apply to a claim lodged on or after 25 September 2020 if the intent to claim provisions in section 13 of the SS(Admin)Act result in the claim day being backdated to a day before 25 September 2020.
Note - early claim: A person who claims a payment before 25 September 2020 but is not qualified for the payment before 25 September 2020 will need to serve a LAWP (unless they are otherwise exempt or have already self-served the waiting period). This is because clause 4 of Schedule 2 to the SS(Admin)Act provides that the person's claim is taken to be made on the first day on which the person is qualified for the social security payment.
Act reference: SS(Admin)Act section 13 Deemed claim-person contacting Department about a claim for a social security payment, Schedule 2 clause 4 Start day-early claim
Coronavirus Economic Response Package Omnibus Act 2020 Schedule 11 Additional support for income support recipients
Social Security (Coronavirus Economic Response-2020 Measures No. 7) Determination 2020
Social Security (Coronavirus Economic Response-2020 Measures No. 14) Determination 2020
Working credit
A recipient serving a LAWP is not receiving a payment, so can only become eligible to accrue or deplete working credit after the waiting period has been served.
A LAWP is ignored when calculating the length of a break in payment for carrying over working credit balances. That is, the break in payment is measured to the date of grant, and not to the end of the LAWP. The carried over working credit balance becomes the recipient's opening balance on the day they start to receive their income support payment.