3.1.2.20 Liquid Assets Waiting Period

Summary

The LAWP applies to ALL YA, Austudy, NSA 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 one 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 (NSA), section 676 Liquid assets test waiting period (SA)

Payments the LAWP applies to

The LAWP applies to the following payments:

  • newstart allowance,
  • youth allowance,
  • austudy payment, AND
  • sickness allowance.

Date of commencement for the LAWP

The following table indicates when the LAWP commences:

If the recipient's status is… Then LAWP for…
newstart allowance… sickness allowance… youth allowance… austudy payment…
member of a couple - incapacitated,

commences on the latest of:

  • the day on which the person became incapacitated for work,
  • the day after the person's partner ceased work,
  • the day after the person's partner ceased to be enrolled in full-time education or vocational training,
  • the day on which the person's partner became incapacitated for work.

Act reference: SSAct section 598

commences on the latest of:

  • the day the person became incapacitated for work or study,
  • the day the person's partner became unemployed,
  • the day the person's partner 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

member of a couple - not incapacitated,

commences on the latest of:

  • the day after the person ceased work or ceased to be enrolled in full-time education or vocational training,
  • the day after the person's partner ceased work,
  • the day after the person's partner ceased to be enrolled in full-time education or vocational training,
  • the day on which the person's partner became incapacitated.

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 NSA.

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 NSA, 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 3.1.13.10 Types of Failures & Penalties, 3.1.13.20 No Show, No Pay Failures, 3.1.13.30 Participation Payment Suspensions, Connection Failures, Non-Attendance Failures, Reconnection Failures & Penalties, 3.1.13.40 Serious Failures & Penalties, 3.1.13.50 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:
  • $10,000 for a member of a couple/carer of a dependent child, and
  • $5,000 for a single person.
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:

  • $5,000 for a member of a couple/carer of a dependent child, and
  • $2,500 for a single person.
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:
  • $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.

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:
  • $5,000 for a member of a couple/carer of a dependent child, and
  • $2,500 for a single person.
01/07/2013 - current From 1 July 2013, the reserve amounts were doubled to:
  • $10,000 for a member of a couple/carer of a dependent child, and
  • $5,000 for a single person.

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 one 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

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.

Act reference: SSAct section 1073E Opening balance

Policy reference: SS Guide 3.1.11.10 Recipients Eligible for Working Credit, 3.1.11.50 Working Credit Opening Balances & Carryovers

Last reviewed: 20 September 2018