5.4.6.30 SEA - Income Not Received Claims

Summary

This topic considers recipients claiming a SEA because they are in severe financial hardship as they have earned income but have not received it.

Qualification

A recipient, who claims a SEA as they have earned income but have not received it, must satisfy the general qualifications set out at 5.4.6.10.

Specifically these are:

  • be qualified for a SEA qualifying entitlement, AND
  • have received some kind of income support payment, for the 3 months immediately before applying for the advance, AND
  • request, and be entitled to, between $50.00 and $500.00 in advance, AND
  • not owe any debt to the Commonwealth that is being recovered, or may be recovered by repayments from their social security payment, except for certain pension PPS recipients, AND
  • be able to repay the advance without suffering financial hardship, AND
  • the person or the person's partner has earned, but not received income, AND
  • the unreceived income has the effect of reducing the applicant's MBR of entitlement (1.1.M.53) by at least 50%, after taking into account any working credits or income bank which can offset the unreceived income, AND
  • the recipient is in severe financial hardship.

Act reference: SSAct section 23(1)-'social security entitlement', section 23(1)-'income support payment'

Policy reference: SS Guide 3.1.11.30 Working credit depletion

Amount of SEA payable

See 5.4.6.50 to calculate the amount of SEA payable in cases of unreceived income.

Recipients may only apply for SEA on the basis of unreceived income at the end of the relevant fortnight

Recipients cannot claim a SEA for earnings not received until the unreceived earnings affect their payment, generally this is at the end of their payment period.

Example: An NSA recipient is due to lodge a fortnightly form on 16 June and be paid their NSA on 17 June. The recipient works for the week 7 - 11 June, and does not expect to receive these earnings until 22 June. The recipient cannot apply for the SEA until the end of the relevant fortnight - 16 June.

Amount of SEA paid cannot exceed the amount by which the recipient's payment is reduced by the unreceived income

The amount of SEA paid because a recipient has earned but not received income is limited to the effect that this income has on the recipient's normal payment. This can include a reduction in RA, PhA and other add-on payments.

Example: A recipient receiving $320.00 per fortnight (pf) basic NSA and $60.00 pf RA, earns $1,000 in a fortnight but does not receive it. The $1,000 earnings means the recipient is not entitled to any basic NSA or RA. They apply for a SEA of $500. As their total payment is $380.00, the maximum SEA payable is $380.00.

Severe financial hardship test

The test for severe financial hardship is the same test used in assessing whether to waive a waiting period. See 1.1.S.125.

Unreceived income must not be expected within 2 days after the claim for the SEA is lodged

Recipients, who have claimed a SEA on the basis that they have earned but not received income, are not entitled to a SEA if the income will be received within 2 days after the claim for the SEA is lodged.

Self-employed recipients

Self-employed recipients must also have their employment details verified. The method of assessing income that normally applies to the recipient's self-employment should be used to determine the impact of earnings on the recipient's MBR of entitlement.

In effect, recipients who are having their income averaged out over a period longer than a fortnight are to have this figure used in determining the effect on their MBR of entitlement, if the income earned but not received is from the same source as the averaged income.

Example: A recipient who is a contract cleaner has averaged income from self-employment of $150.00 pf. The recipient has not been paid for a $400 contract. The recipient's income would be assessed as $150.00 for the fortnight, not $400.00, and therefore may not qualify for a SEA. The method of assessing the recipient's income must not be altered specifically to qualify the recipient for a SEA.

Recipients who are setting up a new business will generally not qualify for a SEA because they will find it difficult to demonstrate what their earnings are going to be in the future.

Last reviewed: 1 July 2015