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.

11.1.14.10 Overview of exemptions from income management

Overview of exemptions

Exemptions from income management can only be sought by people under the Disengaged Youth and Long-term Welfare Payment Recipient measures. While an exemption is generally granted for a 12-month period, it may be reassessed prior to the end of the 12-month exemption period in cases where an individual's circumstances have significantly changed. Should an exempted individual wish to continue to be exempted from income management after this period, a new application for another 12-month exemption will need to be made to Centrelink. A person income managed under the VWPR measure or Child Protection measure is not eligible for an exemption, but may ask the decision maker to review their circumstances.

Core principles

There are some core principles that should be applied in cases where a person seeks an exemption from income management. These principles are set out below.

  • It is intended that income management promote personal responsibility and positive social behaviour by providing pathways to evidence based exemptions for people who have a demonstrated record of responsible parenting, or participation in employment or study.
  • Exemptions are available in cases where income management is not necessary because a person has met the broad outcomes that comprise the objectives of income management. That is, the person can demonstrate that they:
    • are not experiencing hardship or deprivation and are applying appropriate resources to meet their family's 'priority needs' defined under SS(Admin)Act section 123TH
    • can budget to meet priority needs
    • are not vulnerable to financial exploitation or abuse
    • are demonstrating socially responsible behaviour, particularly in the care and education of dependent children (see 'People with dependent children' below)
    • that they are receiving less than 25% of their welfare payments for those who are not a principal carer of a child, and
    • within at least 4 of the last 6 fortnights, the person has received less than 25% of the rate of particular payments, or
    • are actively partaking in an apprenticeship.
  • The relevant legislative instruments list the documentary evidence that may be used to demonstrate that these objectives are being met.
  • A vulnerable youth or person released from gaol or psychiatric confinement can apply for an exemption if that person is actively partaking in an apprenticeship.
  • In most cases (except where Centrelink system information is available, e.g. students and elements of the financial vulnerability test), the responsibility for providing evidence is with the person seeking an exemption. For example, if a person cannot provide evidence of school attendance during the long summer break, they may have to wait until the commencement of the new school year to reapply.

A person who is exempt can be offered the opportunity to enter into VIM.

If a person does not agree with an exemption decision, they can apply to Centrelink for a formal internal review of the decision, which will be undertaken by an ARO. If a person does not agree with the ARO decision, they can apply for a formal external review by the ART (11.1.13).

Act reference: SS(Admin)Act section 123TH Priority needs

People with dependent children

The purpose of requiring engagement in certain activities is not to enforce mandatory requirements but rather to promote additional activities and efforts for children.

SS(Admin)Act section 123UGD provides the criteria for a person with one or more dependent children to seek an exemption from income management. In general, the dependent child or children must be participating in an activity outlined in 11.1.14.40, or attending school, and the parent must have had no indications of financial vulnerability over the preceding 12 month period (11.1.14.30).

These exemptions apply to parents in the following categories:

  • Income support payment recipients subject to the Disengaged Youth measure, that is people aged under 25 years and in receipt of a relevant payment for at least 13 weeks of the last 26 weeks (11.5).
  • Income support recipients subject to the Long-term Welfare Payment Recipients measure, that is people aged 25 years and over in receipt of a relevant payment for more than 52 weeks of the last 104 weeks (11.6).
  • Where parents of a dependent child or children are both subject to income management, only one person can apply for an exemption under the parental exemption category.
  • Only a designated principal carer may apply for a responsible parenting category exemption.
  • The parent not being granted an exemption under the parental exemption category may still apply for an exemption through work or study.

People without dependent children

A person without dependent children may qualify for an exemption under SS(Admin)Act section 123UGC, if study or reduced welfare payment rate requirements are met (11.1.14.70).

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