The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication intended only as a guide to social security payments. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

1.1.E.102 Employment income

Usage

This definition applies to all payments.

Definition

Employment income is income from remunerative work undertaken by the person as an employee in an employer/employee relationship. The defining aspect of this definition is the employer/employee relationship. This is the opposite concept of a person running a business, in which case, certain income and asset test concessions are available to discount their business income.

Employment income includes (but is not limited to):

  • salary
  • wages
  • commissions
  • employment related fringe benefits
  • bonus payments
  • supported wages
  • casual loading (i.e. loading paid to employees in lieu of leave entitlements), and
  • leave payments (including leave loading) when engaged in a continuing employer/employee relationship.

Employment income DOES NOT include:

  • profits, or any other income, from a business carried on by the person
  • superannuation pension payable to the person
  • a payment of compensation, or a payment under an insurance scheme, in relation to the person's inability to earn, derive or receive an income amount from remunerative work
  • comparable foreign payment
  • leave payments (including leave loading) when NOT engaged in a continuing employer/employee relationship
  • an instalment of PLP, and
  • dad and partner pay.

Policy reference: SS Guide 4.3.1.20 Determining the rate of income for pensioners of age pension age from 20/09/2009, 4.3.3.20 Income from employment or independent contracting, 4.3.3.25 Employment income for pensioners of age pension age from 20/09/2009

Partner's income

Employment income of a partner attributed to a person (and vice versa) in the combined income test for couples retains its employment income character in the hands of the person. This includes employment income earned by age pension age people.

Explanation: Partners of age pension age recipients may have access to working credit that allows depletion of working credit in the presence of employment income, regardless of which member of the couple undertakes the employment.

Act reference: SSAct section 8(1) Income test definitions, section 8(1A) A reference in this Act to employment income …, section 8(1B) For the avoidance of doubt, if …, section 8(1C) For the purposes of subsection (1A), a leave payment …, section 1073A Attribution of employment income paid in respect of a particular period or periods, section 1073B Attribution of employment income paid monthly, section 1073BA Attribution of employment income paid not in respect of a particular period, section 1073BB Anti-avoidance, 1073BC Exclusion of certain payments, 1073BD Daily attribution of employment income for amounts not elsewhere covered in this Division, section 1073C Fortnightly or yearly expression of attributed employment income

Policy reference: SS Guide 3.1.11.20 Working credit accrual, 3.1.11.30 Working credit depletion, 4.3.3 Income from employment

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