3.4.7.60 PBS Work Test

Overview

To be considered an accruing member (1.1.A.20) or a post-75 member of the scheme, recipients must pass a work test for each bonus period (1.1.B.80).

Explanation: The work test is designed to be flexible so that people engaged in all forms of employment have the opportunity to meet the requirements.

Example: A seasonal worker could work a high number of hours per week during their 'season' and exceed the 960 hours needed for the bonus period. The recipient would not need to work during the remainder of that full year bonus period.

What is the work test?

For a full year bonus period the recipient, or their partner who is also a member of the scheme, must perform gainful work (1.1.G.20) for at least 960 hours during the period. This is based on an average of 20 hours each week for 48 weeks of each year. Periods of leave (whether paid or not) do not count toward meeting the work test. At least 640 hours, that is two-thirds of this gainful work must be performed within Australia (1.1.A.320).

For a part year bonus period, the minimum amount of work required by the recipient or their member partner to meet the work test is worked out by using the following formula:

  • 960 divided by 365, multiplied by the number of days in the part year bonus period.

As with full year bonus periods, at least two-thirds of the gainful work must be performed within Australia.

Act reference: SSAct section 92T(1) Full-year bonus period, section 92T(3) Part-year bonus period, section 92X(1) Gainful work-basic rule

Policy reference: SS Guide 3.4.7.70 Gainful Work for PBS

Work outside Australia

The Secretary has discretion to treat work performed outside Australia as having been performed within Australia for the purposes of the work test. This discretion should only be exercised where the recipient's employment overseas is a normal part of their employment in Australia.

Act reference: SSAct section 92W Secretary's discretion to treat gainful work outside Australia as gainful work in Australia

Policy reference: SS Guide 3.4.7.70 Gainful Work for PBS

Members of a couple (1.1.M.120)

For members of a couple to accrue bonus periods, both MUST be registered members of the PBS. The minimum requirement is that one partner must pass the work test. A partner MUST be a registered member of either the Veterans' Affairs Scheme or the Social Security Scheme.

Both members of the couple may work if they choose to. However, if both members of a couple work, they cannot combine their hours worked to pass the work test. That is, at least one person must work for at least 960 hours each year.

Example: Bob and Betty are both registered members of the PBS. During the first full year bonus period, Betty works for 1680 hours and Bob works for 700 hours. Bob does not pass the work test in his own right, however, Betty does. Therefore Bob's work is completely disregarded and they each accrue a full year bonus period on the basis of Betty's work. Betty's excess hours are disregarded, and not transferred to top up Bob's.

A recipient who is the non-working partner in a couple who has been relying on the partner's work and commences work in their own right is not able to add the partner's work to their own to meet the work test in the bonus year they commence work.

Example: Partners Mike and Mary are both registered members of the PBS and have accrued one bonus year on the basis of Mike's work. Mike continues to work and meets the work test in the second year. Six months into the second year Mary commences work. If Mary does not meet the work test in the 6 months she works, she can disregard her work and use Mike's hours.

If in the second year Mike ceased work when Mary commenced work, neither Mike nor Mary would accrue a further bonus year unless one of them passed the work test.

Note: This example assumes Mike and Mary have the same registration date.

A recipient who depends on their partner's work may separate from that partner, then re-partner with another person. In this case, the work performed by both of the recipient's partners, while they were a couple, can be added to meet the work test.

Example: Norah and Jeff are partnered and both registered members of the PBS. Jeff was working and had accrued a total bonus period of 2 years and 80 days before Norah left him to live with Tom. Tom is also a registered member of the PBS. Tom continues working and passes the work test for a further 12 months after he became Norah's partner.

Norah's total bonus period would be 3 years and 80 days, all calculated at the partnered rate. Tom's would be the total time he had been in the scheme, with the first period calculated at the 'notional single rate' and the last period at the partnered rate.

Jeff's would be the whole time he had been in the scheme provided he continued to pass the work test. If he continued as an accruing member for 5 years after his separation and remained single, then his bonus would be calculated at the single rate. Otherwise, all or part of the period when he was Norah's partner would be calculated at the 'notional partnered rate' if he was still single when he claimed.

Where a member of a couple commences work after their partner dies, the work performed by the deceased partner in the current bonus period may be deemed to be the work of the survivor.

Act reference: SSAct section 92A Simplified outline, section 92U Work test-full-year period, section 92V Work test-part year period, section 92Y Secretary's discretion to treat activity as gainful work, section 93J(3) Annual notional single pension rate, section 93J(4) Annual notional partnered pension rate

SS(Admin)Act section 22 Last bonus period a full-year period, section 24 Claim by exempt partnered person

Policy reference: SS Guide 3.4.7.70 Gainful Work for PBS

Record-keeping requirement

Participants in the scheme must keep a record of their, or their registered partner's work history.

Explanation: Records are necessary, as the assessment of the scheme is largely retrospective. Recipients are advised of the requirement to keep a record of their employment at the time they register for the scheme. An annual reminder is sent during their deferment period. The record provides the basis of the assessment against the work test requirement during the deferment period.

A recipient satisfies the record-keeping requirement if they:

  • can produce taxation records from which it can be determined the recipient satisfied the work test for the relevant period.

Example: Taxation returns and group certificates - if issued.

  • have maintained a recognised work record of their work history during the deferment period that shows:
    • the nature of their work,
    • the dates worked,
    • the number of hours gainfully worked each week,
    • a breakdown of hours worked within and outside Australia if applicable, and
    • names of employers as appropriate.

Act reference: SSAct section 93C Record-keeping requirements

Additional information

The Secretary may also require a recipient to provide additional information to support their claim. This power should only be used if there is some doubt as to the validity of the recipient's claims regarding work performed during the deferment period. Documentation should ONLY be requested if it is reasonable to expect that the person can obtain the information.

It is the recipient's responsibility to provide the information in order to receive a bonus.

Act reference: SSAct section 92F Relevant information

Last reviewed: 20 September 2016