4.3.3.07 Assessment periods for employment income

Introduction

This topic covers:

  • summary
  • assessment period commencement and operation
  • assessment periods for multiple amounts of employment income, and
  • assessment of employment income paid to pensioners each month.

Summary

'Assessment periods for employment income' refers to the period of time over which an amount is assessed. Employment income (1.1.E.102) is assessed for the same length of time as the employment period (4.3.3.06) associated with the amount. For example, employment income with an employment period of 2 weeks has an assessment period of 2 weeks (where employment income is attributed to part of a fortnight it will have an assessment period of 2 weeks). Employment income is attributed evenly across the number of days in the assessment period for the purposes of assessment.

Act reference: SSAct section 1073A(2) Attribution of employment income paid in respect of a particular period or periods, section 1073BA(4) Attribution of employment income paid not in respect of a particular period

Policy reference: SS Guide 4.3.3.06 Employment period, 4.3.3 Income from employment

Assessment period commencement & operation

Employment income is generally assessed from the first day of the entitlement period (1.1.E.125) in which the amount is paid, regardless of which day in the entitlement period the amount was paid. Assessing employment income from the first day in the entitlement period in which the amount is paid prevents individuals from being arbitrarily advantaged or disadvantaged as a result of the interaction between their entitlement period dates and their employer's pay cycle. Any income paid in an entitlement period will be assessed from the entitlement period start date forward for the number of days to which it relates.

The employment income assessment period determines what proportion of the income in question should be assigned to each entitlement period, that is, whether employment income should be assessed in a single entitlement period or across several.

Example 1: Phil is paid $500 of employment income with an employment period of 20 days. Phil's income is assessed over 20 days and $25 of employment income is attributed to each day of the assessment period.

Assessing employment income from the first day in the entitlement period in which the amount is paid ensures the payment is applied consistently to the period regardless of which day in the period the payment is received. This would mean that $350 is attributed to the first entitlement period and $150 is attributed to the second entitlement period. As a result, $25 would be attributed to each day in the first entitlement period and $ 10.71 would be attributed to each day of the second entitlement period.

Entitlement period

Attribution
$500 paid for 20 days

Daily attribution
1 (in which income paid)

$500 divided by 20 days equals attribution of $25 per day

$25 attributed to each day of the assessment period
(relating to $500 paid during entitlement period)

$25 × 14 days = $350 attributed

$150 remaining for attribution into next entitlement period

$25
2

$150 divided by 14 days of the entitlement period = $10.71

$10.71 attributed to each day of the assessment period
(relating to $500 employment income paid during previous entitlement period)

$0 remaining

$10.71

Example 2: Daniel's employer pays him $300 of employment income with an employment period of 3 weeks on day 9 of his entitlement period. Daniel's employment income is assessed over 3 weeks beginning on the first day of the entitlement period in which the amount is paid- attributed across all 14 days of the first entitlement period and 7 days of the second entitlement period. The effect of this is that $200 of Daniel's $300 of employment income is attributed in the entitlement period in which the amount is paid and $100 is attributed over the subsequent entitlement period.

Entitlement period

Attribution
$300 paid for 21 days

Daily attribution
1 (in which income paid)

$300 divided by 21 days equals attribution of $14.29 per day

$14.29 attributed to each day of the assessment period
(relating to $300 paid during entitlement period)

$14.29 × 14 days = $200 attributed*

$100 remaining

*These calculations are for the purposes of providing an example and do not utilise additional decimal places.
This means rounding may impact.

$14.29
2

$100 divided by 14 days of the entitlement period = $7.14

$7.14 attributed to each day of the assessment period
(relating to $300 employment income paid during previous entitlement period)

$0 remaining

$7.14

Note 1: Employment income paid to pensioners who are able to demonstrate they will receive the same amount on a set day of each month may be assessed from the date the amount is paid (4.3.3.05).

Note 2: The income test assesses the total amount of income within an entitlement period and the number of days for which it has been paid. Income is applied from the beginning of the entitlement period and attributed forward for the relevant number of days. It does not matter whether the income has been paid for particular days worked in the assessment period, there is no difference to the income support payable. For example, $140 paid for a single day of work in the assessment period will be attributed across the entitlement period in the same way as $140 paid by the employer based on $10 for each day in the 14 days assessment period.

Act reference: SSAct section 1073A(2) to (4) Attribution of employment income paid in respect of a particular period or periods, section 1073BA(3) to (5) Attribution of employment income paid not in respect of a particular period

Policy reference: SS Guide 4.3.3.05 Employment income - assessed when paid

Assessment periods for multiple amounts of employment income

Multiple amounts of employment income each have their own employment period (4.3.3.06). Depending on the employer and the employment period associated with each amount of employment income, assessment periods may overlap or apply simultaneously.

Where multiple amounts of employment income are paid by different employers the assessment period for each amount is determined by the associated employment period.

Where multiple amounts of employment income are paid from the same employer in a single entitlement period the employment periods for each income type are added together to determine the assessment period, with overlapping days only counted once. Where the employment income paid from one employer in a single instalment includes multiple employment income types, such as a combination of wages and commissions, each employment income type will have its own assessment period.

Where multiple amounts of employment income have overlapping or simultaneous assessment periods attribution still commences on the first day of the entitlement period in which each amount is paid, including in situations where a new instalment of employment income is paid while the assessment of a previous amount is ongoing. Where the attribution of multiple amounts of employment income overlap the sum of the employment income assigned to each employment period is used for the purposes of income testing.

Example 1: Jane is paid $400 from one of her employers which is assessed over 4 weeks ($200 per fortnight). 2 weeks later Jane is paid $400 from a different employer which is also assessed over 2 weeks. $600 in total is assigned to the second fortnight where the attribution of the 2 amounts overlaps ($200 + $400).

Entitlement period

Attribution
$400 paid for 28 days
a fortnight later a different employer pays $400

Daily attribution
1 (in which income paid)

$400 divided by 28 days equals attribution of $14.29 per day

$14.29 attributed to each day of the assessment period
(relating to $400 paid during entitlement period)

$14.29 × 14 days = $200 attributed

$200 remaining for attribution into next entitlement period

$14.29
2

Income from Employer 1

$200 divided by 14 days of the entitlement period = $14.29

$14.29 attributed to each day of the assessment period
(relating to $400 employment income paid during previous entitlement period)

$0 remaining

Income from Employer 2

$400 divided by 14 days equals attribution of $28.57 per day
(relating to $400 paid during this entitlement period)

$28.57 × 14 days = $400 attributed for this entitlement period

$0 remaining for attribution into next entitlement period from employer 2

$14.29

 

 

 

 

$28.57

Example 2: Heather is paid $600 from her employer for 2 fortnightly pay periods in a single instalment. The 2 fortnightly employment periods are added together and Heather's employment income is assessed over 4 weeks. It will then be attributed over the relevant entitlement periods. A fortnight later Heather is paid $400 by a second employer. The income from this employer is attributed from the beginning of the fortnight in which it is paid. It is attributed in addition to the ongoing attribution of income from Heather's other employer from the previous fortnight.

Entitlement period

Attribution
$600 paid for 28 days
a fortnight later a different employer pays $400

Daily attribution
1 (in which income paid from Employer 1)

Income from Employer 1
$600 divided by 28 days equals attribution of $21.43 per day

$21.43 attributed to each day of the assessment period
(relating to $600 paid during entitlement period)

$21.43 × 14 days = $300 attributed for this entitlement period

$300 remaining for attribution into next entitlement period

$21.43
2 (in which income paid from Employer 2)

Income from Employer 1
$300 divided by 14 days of the entitlement period = $21.43

$21.43 attributed to each day of the assessment period
(relating to $600 employment income paid during previous entitlement period)

$0 remaining

Income from Employer 2

$400 divided by 28 days equals attribution of $14.29 per day
(relating to $400 paid during this entitlement period)

$14.29 × 14 days = $200 attributed for this entitlement period

$200 remaining for attribution into next entitlement period

$21.43 + $14.29 = $35.72

3

Income from Employer 2

$200 divided by 14 days of the entitlement period = $14.29

$14.29 attributed to each day of the assessment period
(relating to $400 employment income paid during previous entitlement period)

$0 remaining

$14.29

Example 3: Katie is paid $500 in wages and $600 in sales commissions by her employer. The $500 in wages has an employment period of 2 weeks and so is assessed over 2 weeks. The $600 commission has an employment period of 6 weeks and so is assessed over 6 weeks. Both types of employment income are attributed from the first day in the entitlement period in which Katie is paid.

Entitlement period

Attribution
$500 wages paid for 14 days
$600 commission paid for 42 days

Daily attribution
1 (in which income paid)

$500 wages
$500 divided by 14 days equals attribution of $35.71 per day

$35.71 attributed to each day of the assessment period
(relating to $500 paid during entitlement period)

$35.71 × 14 days = $500 attributed

$0 remaining for attribution into next entitlement period

$600 commission

$600 divided by 42 days equals attribution of $14.29 per day

$14.29 attributed to each day of the assessment period
(relating to $600 commission paid during the entitlement period)

$14.29 × 14 days = $200.06 attributed for this entitlement period.

$400 remaining for attribution into next 2 entitlement periods

$35.71 + $14.29 = $50

2

Commission

$200 divided by 14 days of the entitlement period = $14.29

$14.29 attributed to each day of the assessment period
(relating to $600 commission paid during previous entitlement period)

$200 remaining for attribution in next entitlement period

$14.29
3

Commission

$200 divided by 14 days of the entitlement period = $14.29

$14.29 attributed to each day of the assessment period
(relating to $600 commission paid during previous entitlement period)

$0 remaining for attribution in next entitlement period

$14.29

Example 4: Rebecca is paid 2 instalments of wages within a single entitlement period by her employer. One amount has an employment period covering the 1st to the 10th of that month, while the other has an employment period from the 5th to the 15th. The assessment period for Rebecca's income is 15 days, as the employment period dates which overlap are only counted once.

Example 5: Haydn is paid $200 in wages and a $10 first aid allowance by his employer. Haydn's wages and allowance both have an employment period of 2 weeks, so both amounts are assessed simultaneously over 2 weeks starting from the first day in the entitlement period in which they are paid.

Example 6: Monique is a kitchen hand on JSP working in the hospitality industry. After 4 years of working at a restaurant, it is found that staff have been underpaid for those 4 years. Monique is paid back pay to make up for the underpayment, in the form of a significant lump sum payment. As Monique is still on JSP, the attributed back pay is applied forward and she receives a reduction in her rate for 52 weeks. This is assessed separate to the ongoing fortnightly wage Monique receives from her employer. For the fortnight in which Monique receives her back pay Monique is paid her regular fortnightly wage. Her wage is applied from the beginning of the entitlement period and attributed across the fortnight. Her backpay is applied from the beginning of the same entitlement period and attributed across 52 weeks.

Act reference: SSAct section 1073A(2) to (4) Attribution of employment income paid in respect of a particular period or periods

Policy reference: SS Guide 4.3.3.06 Employment period

Assessment of employment income paid to pensioners each month

For recipients of pension payments paid an identical amount of ongoing employment income on a set day of each month refer to 4.3.3.08.

Act reference: SSAct section 1073B Attribution of employment income paid monthly

Policy reference: SS Guide 4.3.3.08 Assessment periods for employment income paid monthly

Last reviewed: 7 December 2020