Employment income - first earned, derived, received


People receiving a social security income support payment generally have their employment income (1.1.E.102) assessed in the instalment period in which it is earned, derived, or received according to SSAct section 8.

As a matter of policy, income test assessment is generally based on whichever event occurs first, which is usually when people earn the money. This is because assessing earnings only when received would create inequities, as it would enable some people to defer receiving their earnings until the income would have less impact on their income support entitlement. This would place people who can defer receipt of income in a better financial position than those paid on a regular basis.

However, there are some circumstances where it is not practical or possible to assess earnings when the amount is earned. In these situations, it may be appropriate to assess when the amount is actually received.

Example: A person works for a private survey firm delivering survey forms to households. Payment for this work is based on participant response rates, i.e. based on how many surveys are completed and returned. As the payment for this work can only be determined sometime after the work is performed, it would be appropriate to assess these payments when the amount is actually received.

If the survey was undertaken over a 6 month period with a lump sum payment of $2,000 received at the end of the period the amount would be assessed as an annual rate of income for pension purposes, i.e. $4,000 p.a. for the next 6 months. If payments were received monthly throughout the period, each amount would be multiplied by 12 to get an annual rate and this would be assessed for a month until the new amount was advised. Only if payments were made at least fortnightly would they be assessed in the fortnights they were received.

Act reference: SSAct section 8(1) Income test definitions, section 8(1A) A reference in this Act to employment income, in relation to a person …, 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 a period …, section 1073B Daily attribution of employment income, section 1073C Fortnightly or yearly expression of attributed employment income, section 1073AA Work bonus

Policy reference: SS Guide 1.1.I.40 Income, income amount, 1.1.E.102 Employment income, 3.1.15 Work bonus, Income from employment or independent contracting, Employment income for pensioners of age pension age from 20/09/2009

Last reviewed: 6 May 2019