4.3.3.08 Assessment periods for employment income paid monthly

Introduction

This topic covers:

  • summary
  • assessment periods for employment income paid monthly to benefit recipients, and
  • assessment periods for employment income paid monthly to pension recipients.

Summary

Employment income (1.1.E.102) is usually assessed from the start of the entitlement period (1.1.E.125) in which the amount is paid for the same duration as the associated employment period (4.3.3.06). In most cases employment income paid on a monthly basis will be assessed in this way, however in limited circumstances employment income paid monthly to pension recipients may be assessed on an annual basis. Assessing employment income paid monthly on an annual basis prevents an individual's level of income support from fluctuating each fortnight.

Policy reference: SS Guide 4.3.3 Income from employment, 1.1.E.125 Entitlement period, 4.3.3.07 Assessment periods for employment income, 4.3.3.06 Employment period

Assessment periods for employment income paid monthly to benefit recipients

Recipients of benefit payments (JSP, PPP, ABSTUDY, Austudy, YA, SpB,) will have employment income paid monthly assessed from the start of the entitlement period in which the amount is paid for the same duration as the associated employment period. Given days in a month do not neatly fit into fortnightly entitlement periods, in most months there will be some residual days where a person's employment income is being assessed into the first 2 or 3 days of a third entitlement period since their previous pay day. Those 2 or 3 days will crossover with the attribution of employment income from the next monthly pay day which will be applied from the beginning of the entitlement period and attributed forward.

Example 1: Fatima is on JSP. She is paid $1,500 monthly by her employer on the 15th day of every month. Fatima reports her pay in the entitlement period in which it is paid to her. The amount is assessed from the beginning of the entitlement period and applied forward for the relevant number of days and attributed over each entitlement period that it covers. Depending on the number of the days in the monthly pay period, this means in some months her pay is attributed for 31 days and in some months her pay is attributed for 30 days (and in one month 28 or 29 days).

On 15 September Fatima is paid $1,500 for the period already worked from 1 September to 14 September and in advance for the period she will work from 15 September to 30 September. Her employment period totals 30 days.

On 15 October Fatima is paid $1,500 for the period already worked from 1 October to 15 October and in advance for the period she will work from 16 October to 31 October. Her employment period totals 31 days. The table below shows how the income from each pay cycle is attributed.

Entitlement period

Attribution
$1,500 paid for 30 day employment period

Daily attribution
Beginning 14 September

$50 attributed to each day of the assessment period
(relating to $1,500 employment income paid on 15 September)

Employment period is 30 days (1 September to 30 September)

$1,500 divided by 30 days equals attribution of $50 per day

$50 × 14 days = $700 attributed for the entitlement period 14 September to 27 September

$800 remaining

$50
Beginning 28 September

$50 attributed to each day of the assessment period
(relating to $1,500 employment income paid on 15 September)

$50 × 14 days = $700 attributed for the entitlement period 28 September to 11 October

Total of $1,400 now attributed

$100 remaining

$50

Beginning 12 October

Remainder of attribution from income paid 15 September

Attribution of income paid 15 October

$100 divided by 14 days = $7.14

$7.14 attributed to each day of the assessment period
(relating to $1,500 employment income paid on 15 September)

$0 remaining

$48.39 attributed to each day of the entitlement period
(relating to $1,500 employment income paid on 15 October)

Employment period is 31 days (1 - 31 October)

$1,500 divided by 31 days equals attribution of $48.39 per day

$48.39 × 14 days = $677.42 attributed for the entitlement period 12 October to 25 October

$822.58 remaining

$7.14 each day + $48.39 each day = $55.53 each day

Act reference: SSAct section 1073A Attribution of employment period paid in respect of a particular period or periods

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

Attribution of employment income paid monthly to pension recipients

Recipients of pension payments (PPS, Age, DSP, CP) will generally have employment income paid monthly assessed from the start of the entitlement period in which the amount is paid for the same duration as the associated employment period.

However, where pension recipients are paid an identical amount of employment income on a set day of each month (e.g. the 15th), and can demonstrate that they will continue to be paid in this way for the foreseeable future (e.g. the person provides a contract of employment setting out the arrangement), they may have their employment income assessed on an ongoing annual basis. Assessing employment income paid calendar-monthly on an annual basis prevents an individual's level of income support from fluctuating each fortnight due to the changing length of different months.

Note: This provision is discretionary and will not be applied for pensioners partnered to benefit recipients.

Example 1: Rodger is an Age recipient and is paid $1,000 by his employer on the 10th of each month. Rodger demonstrates that he will continue to be paid in this way for the foreseeable future by providing a copy of his contract of employment that sets out the arrangement. Rodger's employment income commences being assessed on an ongoing basis, resulting in a consistent level of income support each fortnight.

Entitlement period Attribution Daily attribution
Beginning 14 September

Initial amount × 12 divided by 364

$1,000 × 12 divided by 364 = $32.97

$32.97
Beginning 28 September See above $32.97
Beginning 12 October See above $32.97

Example 2: Madeline is a DSP recipient and is paid by her employer on the 20th of each month. There are small variations in the amount of employment income Madeline is paid each month. As a result, Madeline is ineligible to have her employment income assessed on an ongoing basis.

Note 1: Ongoing annual assessment of calendar-monthly employment income commences from the date the income is paid, not the first day of the entitlement period in which the amount is paid.

Note 2: The decision to assess calendar-monthly employment income on an ongoing annual basis is made at the discretion of the Secretary. There is no obligation to assess employment income in this way even if all the criteria are met.

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

Last reviewed: 7 December 2020