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.

3.1.2.20 Liquid assets test waiting period

Summary

The LAWP applies to ALL YA, Austudy and JSP recipients whose liquid assets (1.1.L.50) exceed a specified amount. The LAWP can vary from one to 13 weeks in duration depending on:

  • the amount of the recipient's liquid assets
  • whether they are a member of a couple (1.1.M.120), and/or
  • have a dependent child (1.1.D.70).

Some payments may have provisions that exempt a person from serving the LAWP. These provisions are explained in the relevant payment topic.

The rest of this topic explains:

  • the payments it applies to
  • how it is calculated
  • the duration
  • when it commences
  • exemptions
  • interaction with working credits, and
  • historical reserve amounts.

The treatment of some types of liquid assets is explained in 3.1.2.30.

Act reference: SSAct section 14A Social security benefit liquid assets test definitions, section 549A Liquid assets test waiting period (YA), section 575A Liquid assets test waiting period (Austudy), section 598 Liquid assets test waiting period (JSP)

Payments the LAWP applies to

The LAWP applies to the following payments:

  • jobseeker payment
  • youth allowance, and
  • austudy payment.

Calculating the LAWP

The LAWP is calculated differently depending on whether the recipient is a member of a couple and/or has a dependent child.

From 1 July 2013 the maximum reserve amounts are:

  • $10,000 for a recipient who is a member of a couple AND/OR has a dependent child, and
  • $5,000 for a recipient who is single and does NOT have a dependent child.
If the recipient is … then the LAWP is calculated by …
a member of a couple, AND/OR has a dependent child liquid assets minus the maximum reserve amount of 10,000, divided by $1,000.
single and does NOT have a dependent child liquid assets minus the maximum reserve amount of 5,000, divided by $500.

Example: Sara has $7,300 in the bank and does not have a partner or a dependent child. To calculate the LAWP:

  • $7,300 - $5,000 (maximum reserve amount) = $2,300
  • $2,300 ÷ $500 = 4.6 (weeks)
  • round down to the nearest whole week = 4 (weeks)

A person's liquid assets must be equal to or exceed the below amounts before the LAWP is applied:

  • $5,500 for single customers, or
  • $11,000 for partnered customers or single customers with a dependent child

Note: If the recipient is a member of a couple, the recipient's liquid assets includes those of their partner as per the definition of liquid assets provided in 1.1.L.50.

Income from the FEG

Payments made as a consequence of redundancy may be assessed as a liquid asset for new claims.

Policy reference: SS Guide 1.1.L.50 Liquid assets, 4.3.3.70 Income from the Fair Entitlements Guarantee (FEG)

Duration of LAWP

The LAWP can vary from one to 13 weeks. The result from the calculation is the duration of the LAWP to be served in weeks, rounded down to the nearest whole number.

If the result is … then the LAWP is …
13 or more 13 weeks.
between one and 13 between one and 13 weeks.
less than one not served at all.

The LAWP can be self-served in part or in full. Where a claim for an allowance is made after the LAWP would have expired, the recipient is deemed to have served a LAWP and the LAWP is completed. Where the recipient makes another claim in a 12-month period, this self-served LAWP is considered completed and the recipient is not required to serve another LAWP.

The LAWP and any non-compliance deferment or rate reduction period resulting from a failure are served concurrently. Any period remaining at the expiry of the waiting period would still need to be served.

Act reference: SSAct section 595 Persons may be treated as unemployed

Policy reference: SS Guide 3.11.14.10 Types of failures & penalties, 3.11.14.20 No show, no pay failures, 3.11.14.30 Participation payment suspensions, connection failures, non-attendance failures, reconnection failures & penalties, 3.11.14.40 Serious failures & penalties, 3.11.14.50 Compliance failures & penalties - general rules

Date of commencement for the LAWP

The following table indicates when the LAWP commences.

If the recipient's status is … then LAWP for …
jobseeker payment … youth allowance … austudy payment …
member of a couple - incapacitated

commences on the latest of:

  • the day on which the person became incapacitated for work
  • the day after the person's partner ceased work
  • the day after the person's partner ceased to be enrolled in full-time education or vocational training
  • the day on which the person's partner became incapacitated for work.

Act reference: SSAct section 598

commences on the day the person became incapacitated.

Act reference: SSAct section 549B

commences on the day the person became qualified for Austudy.

Act reference: SSAct section 575B
member of a couple - not incapacitated

commences on the latest of:

  • the day after the person ceased work or ceased to be enrolled in full-time education or vocational training
  • the day after the person's partner ceased work
  • the day after the person's partner ceased to be enrolled in full-time education or vocational training
  • the day on which the person's partner became incapacitated.

Act reference: SSAct section 598

commences on the day the person became qualified for YA.

Act reference: SSAct section 549B

commences on the day the person became qualified for Austudy.

Act reference: SSAct section 575B
single - incapacitated

commences on the day the person became incapacitated.

Act reference: SSAct section 598

commences on the day the person became incapacitated.

Act reference: SSAct section 549B

commences on the day the person became qualified for Austudy.

Act reference: SSAct section 575B
single - not incapacitated

commences on the day after the person ceased work or ceased to be enrolled in full-time education or vocational training.

Act reference: SSAct section 598

commences on the day the person became qualified for YA.

Act reference: SSAct section 549B

commences on the day the person became qualified for Austudy.

Act reference: SSAct section 575B
single - not incapacitated for work, and has no prior connection to employment or education

commences on the day the person became qualified for JSP.

Act reference: SSAct section 598

commences on the day the person became qualified for YA.

Act reference: SSAct section 549B

commences on the day the person became qualified for Austudy.

Act reference: SSAct section 575B

If a recipient is still working casually or part-time when they claim JSP, the delegate must decide when the recipient is deemed to be unemployed. This will usually be the date on which the last change to that employment occurred.

Example: A change in the hours worked or a change from full-time to part-time.

Act reference: SSAct section 595 Persons may be treated as unemployed

Exemption from the LAWP

Recipients can be exempted from the LAWP as explained in 3.1.2.70.

Waiving the LAWP

The LAWP may be waived in full or in part when the recipient is in severe financial hardship as a result of unavoidable or reasonable expenditure (1.1.U.20). A recipient's reasonable cost of living does not have to be justified with receipts. The reasonable cost of living is an amount deemed by the delegate to be appropriate to the recipient's circumstances. The deemed amount cannot be exceeded. Reasonable costs of living cannot exceed the maximum rate of payment that the recipient would be entitled to.

Temporary exemption from the LAWP - Coronavirus (COVID-19) 25 March 2020 to 24 September 2020

As part of the response to the Coronavirus (COVID-19) outbreak, the LAWP did not apply from 25 March 2020 to 24 September 2020 for JSP, YA and Austudy. A person already serving a waiting period at 25 March 2020 was not required to serve the waiting period and was backdated to the date of claim.

At the end of the exemption period, recipients did not have to resume any remaining waiting period. The LAWP only applied to NEW claimants from 25 September 2020.

Act reference: SSAct section 19C Severe financial hardship definitions, Schedule 11 Additional support for income support recipients

Coronavirus Economic Response Package Omnibus Act 2020

Social Security (Coronavirus Economic Response-2020 Measures No. 7) Determination 2020

Social Security (Coronavirus Economic Response-2020 Measures No. 14) Determination 2020

Policy reference: SS Guide 3.1.2.10 Application of waiting periods, 3.1.2.70 Exemptions from waiting periods

Working credit

A recipient serving a LAWP is not receiving a payment, so can only become eligible to accrue or deplete working credit after the waiting period has been served.

A LAWP is ignored when calculating the length of a break in payment for carrying over working credit balances. That is, the break in payment is measured to the date of grant, and not to the end of the LAWP. The carried over working credit balance becomes the recipient's opening balance on the day they start to receive their income support payment.

Act reference: SSAct section 1073E Opening balance

Policy reference: SS Guide 3.1.11.10 Recipients eligible for working credit, 3.1.11.50 Working credit opening balances & carryovers

Historical reserve amounts

The following table shows the historical reserve amounts.

Date Reserve amount
01/02/1991 to 19/09/1997 The LAWP provisions commenced on 1 February 1991, through the Social Security Legislation Amendment Act 1990. Initially, the LAWP was for a set duration of 4 weeks if the recipient's liquid assets exceeded the reserve amount. The reserve amounts were set at:
  • $10,000 for a member of a couple/carer of a dependent child, and
  • $5,000 for a single person.
20/09/1997 to 01/04/2009 From 20 September 1997, the LAWP provisions were amended so that the length of the LAWP, in weeks, was calculated by dividing the amount by which the recipient's liquids assets exceeded the reserve amount by $1000 for a member of a couple/carer of a dependent child, or $500 for a single person.

The maximum LAWP was limited to 13 weeks, and fractions of weeks were rounded down to the nearest whole week.

Also from 20 September 1997, the reserve amounts for the LAWP were reduced to:

  • $5,000 for a member of a couple/carer of a dependent child, and
  • $2,500 for a single person.
01/04/2009 to 31/03/2011 For the period 1 April 2009 to 31 March 2011, the reserve amounts were temporarily doubled in response to the global recession. The maximum reserve amount between these dates was:
  • $10,000 for a recipient who is a member of a couple and/or has a dependent child, and
  • $5,000 for a recipient who is not a member of a couple and does not have a dependent child.

Recipients who were already serving a LAWP on 1 April 2009 had their waiting period recalculated using the temporary maximum reserve amount. Recipients who began serving a LAWP on or before 31 March 2011 and continued to serve it after that date did not have their waiting period recalculated.
01/04/2011 to 30/06/2013 For this period the reserve amounts returned to what they were prior to the temporary increase of 1 April 2009 of:
  • $5,000 for a member of a couple/carer of a dependent child, and
  • $2,500 for a single person.
01/07/2013 to current From 1 July 2013, the reserve amounts were doubled to:
  • $10,000 for a member of a couple/carer of a dependent child, and
  • $5,000 for a single person.

Act reference: SSAct section 14A Social security benefit liquid assets test definitions

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