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 is intended only as a guide to relevant legislation/policy. 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.L.140 Lump sum

Definition

A lump sum is a single payment made at a particular time, as opposed to a periodic instalment.

Since the 1 July 1998 alignment of the income test treatment of non-remunerative lump sum amounts for both pension and allowance purposes, non-remunerative lump sums are to be apportioned as income for 52 weeks from the date they are entitled to be received.

Where lump sums are remunerative they are to be attributed as income prospectively for the period to which they relate from the beginning of the entitlement period in which they are paid. If the amount cannot be related to a specific period, the amount is attributed prospectively for a period up to 52 weeks as the Secretary determines.

A small number of lump sums are treated differently - refer to policy reference for:

  • compensation assessed as ordinary income, and
  • lump sums which are exempt.

Act reference: SSAct section 8(11) An amount received by a person is an exempt lump sum …, section 23(1)-'social security benefit', section 1073 Certain amounts taken to be received over 12 months, section 1073A Attribution of employment income paid in respect of a particular period or periods, section 1068-G7B Claimant or recipient receives lump sum amount for remunerative work, section 1068-G7C Partner of claimant or recipient receives lump sum amount for remunerative work, section 1067L-D20 Claimant or recipient receives lump sum amount for remunerative work, section 1067L-D21 Partner of claimant or recipient receives lump sum amount for remunerative work, section 1067G-H23A Claimant or recipient receives lump sum amount for remunerative work, section 1067G-H23B Partner of claimant or recipient receives lump sum amount for remunerative work, section 1068B-D19 Period over which ordinary income taken into account, section 1073AA Work bonus, section 1073BA Attribution of employment income paid not in respect of a particular period

Policy reference: SS Guide 1.1.E.180 Exempt lump sums, 4.3.1.10 Determining the rate of income for benefits, 4.3.1.20 Determining the rate of income for pensioners of age pension age from 20/09/2009, 4.3.1.40 Determining the rate of income for PP, 4.3.2.30 Income exempt from assessment - legislated, 4.3.2.31 Income exempt from assessment - specifically approved, 4.3.2.35 Income exempt from assessment - s 8(11) exempt lump sums, 4.3.3.10 General provisions for income from employment, 4.3.3.20 Income from employment or independent contracting, 4.13.1.20 Assessment of compensatory type payments, 3.1.15 Work bonus

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