184.108.40.206 Qualification for SA
Note: SA closed to new entrants on 20 March 2020 and ceased on 20 September 2020. The following information is for historical purposes only.
Qualification (1.1.Q.10) criteria
To qualify for SA, a recipient must meet the criteria listed in the following table. Where more detail about a criterion is required, the second column indicates where you will find this.
ALL of the following
|Be aged at least 22 years but less than age pension age||-|
|Be temporarily incapacitated for their usual work or study, AND||This topic|
|Have a job to return to when the temporary incapacity for work ends, AND||This topic|
|Be an Australian resident, OR a certain SCV holder, and present in Australia when the claim for SA is lodged.||3.1.1 Residence requirements
This topic also describes:
- the time limit on qualifying for SA
- who CANNOT qualify for SA, AND
- SA for SCV holders.
The following issues may also affect qualification for SA and are explained in other topics in this section:
- whether the recipient is a student, and
- whether the recipient is undertaking a rehabilitation program.
Act reference: SSAct pre-20 September 2020 section 23(5A) to section 23(5D) Pension age, section 7(2) An Australian resident is a person who …, section 666 Qualification for SA, section 666A Time limit on grants
Temporary incapacity for work or study
The recipient must be temporarily incapacitated for their usual work or study to qualify for SA. An incapacity for work or study is considered to be temporary if it is likely that the recipient will be able to return to work WITHIN the next 2 years. If it is likely to take longer than 2 years for the recipient to return to work or study, qualification for DSP must be investigated.
The temporary incapacity for work or study must be wholly, or virtually wholly, caused by a medical condition (1.1.M.90). Some conditions will clearly meet this requirement.
Examples: Broken limb, pneumonia, severe back injury, recovery from surgery.
Working credit participants
An SA recipient who has a working credit balance and returns to their job, is treated as being qualified for the period it takes to run down their working credit balance despite not satisfying the temporarily incapacitated requirement. This allows the recipient to benefit from their working credit balance - providing encouragement to recipients to return to their job.
This treatment will continue until the earliest of:
- their working credit balance is reduced to nil, or
- qualification (other than related to the employment) is lost, or
- payability (other than related to employment income) is lost.
Act reference: SSAct pre-20 September 2020 section 1073J Working credit balance prevents loss of qualification in certain cases
Policy reference: SS Guide 220.127.116.11 Working credit depletion
Definition of work
SSAct section 666(2) defines 'work' as work that the person has contracted to perform under a contract of employment that the person had immediately before the person becomes incapacitated and continues after the person becomes incapacitated. This includes self-employed people who do not operate through a company.
Act reference: SSAct pre-20 September 2020 section 666(2) In this section work, in relation to …
Recipients who are employed
If a recipient has a contract of employment (written or oral) for an indefinite period and it is verified that the recipient will resume work at the end of their incapacity, then the recipient satisfies the definition of work under SSAct section 666(2).
If the contract is a fixed term contract, then the contract of employment ends when the term expires and the recipient no longer satisfies the definition of work for the purposes of section 666(2). The recipient should be transferred to JSP. However, if the recipient can provide evidence that the contract of employment has continued past the expiration of the specified term, the delegate should consider the new information and assess the continuing eligibility of the recipient for SA.
If the contract has specific provisions for the termination of contract in the event of incapacity, then the contract ceases on the person's incapacity.
Casual employees with more than one employer need only demonstrate that they have a contract of employment with any of their employers.
The following table provides indicators when looking at the degree of control exercised over an applicant for SA prior to 20 March 2020.
Note: It is NOT necessary for all the following indicators to be present for a contract of service to exist, however, the presence of one or more of these indicators suggests that such a contract may be in place. When making a decision, the Secretary must allow for a degree of flexibility and weigh up all the circumstances of the particular case, including the considerations below.
|Indicators||Potential contract of service exists if …||Potential contract for service exists if …|
|Lawful authority to command||The payer usually has the right to direct the way in which the work is done.||The person maintains a high level of discretion and flexibility as to how the work is performed.|
|How the work is performed||Tasks are performed at the request of the payer. The person may be said to be working in the business of the payer.||The person enters into a contract for a specific task or series of tasks. The person maintains a high level of discretion and flexibility as to how the work is performed.|
|Risk||The person bears little or no risk nor is exposed to any commercial risk. This is borne by the payer. Generally, the payer is responsible for any loss resulting from poor work.||The person stands to make a profit or loss on the task/s and bears the commercial risk. The person bears the responsibility and liability for any poor work or injury sustained in the performance of the task and generally the person would be expected to carry their own insurance policy.|
|Place of performance||The person generally performs the tasks on the payer's premises.||The person generally provides all their own assets to perform the tasks and may work at a number of locations.|
|Hours of work||The person generally works standard or set hours.||The person generally sets their own hours.|
|Leave entitlements||The contract provides annual leave, long service leave, sick leave or other benefits or allowances.||The contract may not contain leave provisions.|
|Payment||The person is paid an hourly rate, piece rates or award rates.||The person is paid based on the performance of the contract.|
|Expenses||The person is reimbursed for expenses incurred in the course of employment.||The person is responsible for their own expenses.|
|Termination||Subject to state and federal laws, the payer reserves the right to dismiss the person at any time.||The payer may only terminate the contract without penalty where the person has not fulfilled the conditions of the contract.|
|Equipment||The plant and equipment is generally provided and maintained by the payer (in some cases the person will agree to use their own equipment).||The plant and equipment is the responsibility of the person.|
|Taxation||The person pays PAYG tax which the payer pays on behalf of the person.||The person deals with their own tax.|
|Delegation||The person has no inherent right to delegate tasks to another although there may be a power to delegate some duties to other employees.||The person can delegate all or some of the tasks to another person and may employ other people.|
Recipients on a graduated return to work
Recipients who are on a graduated return to work satisfy sections 666(1)(a), 666(1)(ca)(i) and may qualify for SA if:
- they are contracted to work for more hours than their incapacity allows them to perform, and
- their incapacity for work is, or is likely to be temporary (i.e. the incapacity preventing the person from performing the full hours of their contract is temporary).
Example: A recipient recovering from injuries received in a car accident or from chronic fatigue syndrome has an ongoing contract of employment for 40 hours a week. Their doctor states that they are now fit to work for 10 hours a week. The employer agrees to a graduated return to work on the understanding that the recipient will gradually return to the full-time hours provided for in their contract of employment, as their medical condition improves. Their earnings are assessed under the income test.
Self-employed person who operates through a company
Self-employed SA recipients whether they are sub contractors, contractors, sole traders or primary producers who operate through a company (as a principle or employee) will satisfy the definition of work. A contract of employment exists between the self-employed person and the company.
Franchisees will need to demonstrate that they are the owners of the franchise. These recipients are likely to operating through a company or the franchise will have contractual arrangements with the parent company.
Self-employed person who does not operate through a company
Self-employed applicants who do not operate their business through a company and do not have a contract (written or oral) to provide goods or services will not satisfy the definition of work. The applicant should be considered for JSP (incapacitated).
Self-employed applicants who do not operate their business through a company but have a contract (written or oral) to provide goods or services should be asked to provide the written contract or interviewed. The terms of the contract need to be examined to determine whether it is a 'contract of service' or a 'contract for service'. See 'Recipients who are employed'.
A contract of service is considered to be a contract of employment whereas a contract for service is not. A contract of service can be distinguished from a contract for service by looking at the degree of control the contract exercises over the recipient. The greater the degree of control the greater the possibility that the relationship is one of employment and a contract of service exists.
If it is considered that a self-employed applicant has a contract for service, they do not satisfy the definition of work and therefore should be considered for JSP (incapacitated).
Example 1: A painter has been contacted by a builder to paint a group of townhouses. The builder prescribes what work will be done, when work will commence, and when it must be completed. The painter sets his own hourly rate and mode of remuneration, and the builder agrees to these arrangements. The builder will not deduct income tax from the payments. The builder will supply the paint, but the painter will provide his or her own equipment. The terms of this contract exercise sufficient control over the applicant for a contract of service to exist.
Example 2: A couple sells flowers from a van on the side of the road. They determine the time and location for setting up the stall according to traffic patterns, weather and personal commitments. They also determine the selling price of the flowers. They have no regular customers and rely on drive-by customers. They have no contract to supply flowers to local florists or any other business/person. Their business would not be considered to be a contract of service and would not meet the definition of work for SA purposes.
Residence exemption - one-off period of SA for SCV holders from New Zealand
New Zealand citizens who are the holders of an SCV who arrived in Australia at any time on or after 26 February 2001 and do not meet the definition of an Australian resident for social security purposes can qualify for SA under certain circumstances.
New Zealand citizens who are SCV holders may be exempt from the residence requirements and able to qualify for a one-off period of payment for up to 6 months of either SA, JSP or YA (subject to other qualification requirements) if:
- they are the holder of an SCV, and
- immediately before claiming they have resided in Australia continuously for at least 10 years, which commenced on or after 26 February 2001.
Note: No applicant will be able to meet the conditions of this provision until 26 February 2011.
The 6 month period does not start until any relevant waiting and/or preclusion/exclusion periods have been served and payments commence.
Transfer between payments is not permitted under this residence exemption. For example, a person in receipt of SA by virtue of this exemption would not be able to transfer to JSP.
A temporary absence such as a holiday does not mean that a person ceases to reside in Australia and can be included in the 10 years.
SSAct section 38B may be applied to treat a person in certain circumstances as having received an income support payment in respect of the continuous 6 month period even though the person did not actually receive such a payment during a part or parts of the period, for example due to employment income.
To qualify and retain qualification for payment under this residence exemption the person must be the holder of a non-protected SCV. If a person is granted a different visa they will no longer qualify under these provisions, and will be required to serve the NARWP before they may re-qualify for SA, JSP or YA.
An SCV holder who was in Australia on 26 February 2001 is a protected SCV holder, and may be regarded as an Australian resident. For more information regarding protected SCV holders, refer to 18.104.22.168 Residence requirements.
Act reference: SSAct pre-20 September 2020 section 666 Qualification for SA, section 7(7) For the purpose of paragraph …, section 38B Notional continuous period of receipt of income support payments, section 23(1)-'waiting period'
SA can be paid for up to 6 weeks when a recipient is temporarily absent from Australia:
- to seek medical treatment of a kind not available in Australia, or
- to attend to an acute family crisis, or
- for a humanitarian purpose.
Medical treatment means treatment by a person who would normally qualify as a medical practitioner in Australia. Suitable medical treatment does NOT include:
- herbalist cures
- chiropractic treatment
- faith healing, or
- thermal springs.
Payment should NOT be approved for recipients who:
- wish to travel overseas for post-operative recuperation, OR
- are seeking outdated treatment that is no longer offered in Australia.
Policy reference: SS Guide 22.214.171.124 Payability of SA, 7.1 Conditions for payment outside Australia, 126.96.36.199 Application of portability rules (portability table), 7.2 Arrangements for payment outside Australia
Time limit on qualification for SA
A recipient ceases to qualify for SA 14 days after their MAP (section 669(2)) ends.
Act reference: SSAct pre-20 September 2020 section 669 Time limit on qualification for SA
An applicant must lodge a proper claim before SA can be granted.
Act reference: SSAct pre-20 September 2020 section 666A Time limit on grants
Policy reference: SS Guide 188.8.131.52 Claim Lodgement - General Provisions
Who does not qualify for SA?
The following recipients did not qualify for SA:
- Recipients whose incapacity for work was solely or primarily due to non-medical reasons (see examples).
- A recipient who fails, within a specified time, to comply with a departmental request to
- contact a specified officer of the department
- attend an interview at a specified place
- complete a questionnaire, or
- attend a medical, psychiatric or psychological examination.
- A recipient who is
- on work release
- on home detention, or
- subject to community service orders.
Examples: Age, education, literacy, lack of employment opportunities, work skills, work history or English language skills.
Act reference: SSAct pre-20 September 2020 section 666 Qualification for SA, section 685 Full-time students, section 16(1) Industrial action definitions
SS(Admin)Act pre-20 September 2020 section 63 Requirement to attend Department etc.