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.

3.15.2.20 Payability of ES

Payability

The ES accrues, and is payable for, each day, in an instalment period that a person qualifies for ES. ES is generally paid fortnightly with the person's regular payment. However, a person can elect to receive the ES quarterly.

Quarterly ES payments for pensioners & income support recipients

A person can choose to receive quarterly ES payments rather than having the ES added to their fortnightly social security payment. For quarterly elections, the ES will continue to accrue daily, building up until one of the quarterly payment days occurs. Payments of quarterly ES will be made as soon as possible after 20 March, 20 June, 20 September, and 20 December each year.

The quarterly ES is payable in relation to each day on which an election is in force.

Where a recipient changes their election to no longer receive a quarterly payment, or where they no longer remain qualified, they will receive immediate payment of any accrued quarterly ES at that time. This ensures that people receive their accrued quarterly ES as soon as they cease to qualify for it, instead of having to wait until the end of the quarter.

Pensioners who have elected to receive quarterly pension supplement will receive quarterly ES payments by default.

Quarterly ES instalments are calculated as follows:

  • if the rate calculator for the person's qualifying payment produces an annual rate, calculate the daily rate by dividing the ES annual rate by 364, OR
  • if the rate calculator for the person's qualifying payment produces a fortnightly rate, calculate the daily rate by dividing the ES fortnightly rate by 14, AND
  • add together the daily rates for each day the person qualifies for the ES during the test period for the quarterly ES.

A person's social security payment remains payable even if their rate is nil, where the person's rate is nil merely because they have received an advance of PhA or elected to receive their ES quarterly.

FTB recipients will also receive an ES for FTB Part A and FTB Part B where they are entitled to such ES. Please refer to the FA Guide 8.2 for grandfathering provisions for ES and 1.2.10 for details on the timing of payments.

Act reference: SSAct section 915 When quarterly ES is payable, section 44(2) Subsection (1) does not apply to a person if the person's rate … (Age), section 98(2) Subsection (1) does not apply to a person if the person's rate … (DSP), section 199(2) Subsection (1) does not apply to a person if the person's rate … (CP), section 500I(2)(a) … an election by the person … (PP), section 547(2)(a) … an election by the person … (YA), 572(2)(a) … an election by the person … (Austudy), section 608(2)(a) … an election by the person … (JSP), section 732(2)(a) … an election by the person … (SpB)

SS(Admin)Act section 48D Payment of quarterly ES

Policy reference: FA Guide 1.2.10 Energy supplement (ES) - description, 8.2 ES - grandfathering provisions

Quarterly payments for CSHC holders

CSHC holders to whom ES is payable can receive the ES only quarterly.

ES is payable for each day that a person is qualified for the payment unless the person:

  • ceases to meet the requirements around continuity of receipt of that payment from 19 September 2016 onwards (refer to 3.15.2.30 for details)
  • elected not to receive ES, and that election has not been withdrawn, or
  • not provided their bank account details when requested.

A person's accrued amount of ES is paid quarterly, as soon as possible after the relevant test day.

ES test days are 20 March, 20 June, 20 September and 20 December each year. On these dates, the accrued amount of a CSHC holder's ES will be 'triggered' for issue and paid soon afterwards.

Act reference: SS(Admin)Act section 48B Payment of ES

Overseas absences

A person must reside in Australia in order to receive an ES.

If a person is temporarily absent from Australia, ES may be paid to them, during their absence, for the shorter of the portability period for their qualifying entitlement and 6 weeks.

A person will not be paid ES for days overseas in excess of 6 weeks, even where the person's qualifying payment remains payable beyond 6 weeks overseas.

Act reference: SSAct section 1064-C1 An ES is to be added … (Age, DSP, CP), section 1065-C1 An ES is to be added … (Age, DSP (blind people)), section 1068-C1 An ES is to be added … (WA, JSP, PA), section 1068A-BB1 An ES is to be added … (PPS), section 1068B-DB1 An ES is to be … (PPP), section 1066A-BA1 An ES is to be added … (DSP), section 1066B-BA1 An ES is to be added … (DSP), section 1067G-BA1 An ES is to be added … (YA), section 1067L-BB1 An ES is to be added … (Austudy)

Duplicate payments (multiple qualification exclusion)

Generally a person cannot be paid an ES under the SSAct if they are also in receipt of a payment under the VEA or the MRCA. However, a person can qualify for more than one ES in respect of more than one qualifying payment in the following circumstances:

  • a person who qualifies for an ES as an FTB recipient may also qualify for an ES as a recipient of another government payment
  • a person who receives a social security qualifying payment as well as a DVA Disability Compensation Payment (formerly disability pension) paid under Part II or Part IV of the VEA at a rate determined by Division 4 of Part II of that Act may receive an ES in respect of their social security payment as well as an ES in respect of their VEA payment
  • a person who receives a social security qualifying payment as well as a permanent impairment payment or a special rate disability pension paid under the MRCA may receive an ES in respect of each payment.

Multiple qualification exclusion criteria are contained in the Social Security (Clean Energy - Multiple Qualification Exclusion) (FaHCSIA) Determination 2012, which was a disallowable instrument made under SSAct section 918. While this disallowable instrument sunsetted on 1 October 2022, its operation is preserved by the Acts Interpretation Act 1901 paragraph 7(2)(b).

Taxation treatment

Clean energy payments paid under the SSAct, the VEA, the MRCA, or the ABSTUDY scheme, which includes the ES, are exempt from income tax.

Act reference: SSAct section 23(1)-'energy supplement'

Income Tax Assessment Act 1997 section 52-10(1L) Clean energy payments …, section 52-15 Supplementary amounts of payments

Exempt income

Clean energy payments (including ESs) paid under the VEA or the MRCA or the ABSTUDY scheme are not to be treated as income for the purposes of the SSAct.

Likewise, energy supplements paid under the SSAct or the ABSTUDY scheme are exempt as income for the purposes of the VEA.

Act reference: SSAct section 8(8)(yha) a clean energy payment under the Veterans' Entitlements Act, section 8(8)(znb) a clean energy payment under the Military Rehabilitation and Compensation Act

Veterans' Entitlements Act 1986 section 5Q(1)-'clean energy payment', section 5H(8)(h) … a payment under the SSAct

Military Rehabilitation and Compensation Act 2004 section 5(1)-' clean energy payment'

Compensation

The ES is a compensation-affected payment only if the underlying qualifying payment is a compensation-affected payment.

Act reference: SSAct section 17(8) For the purposes of the definition of income cut-out amount

Policy reference: SS Guide 1.1.C.250 Compensation-affected payment

Debts

The same debt provisions that apply to a person's qualifying payment will apply to the person's ES.

Policy reference: SS Guide 6.7 Debt provisions under the SSAct from 1/7/2001

Rate of payment

The rates of ES are set out in 5.1.10.20.

If the rate calculator for the person's qualifying payment produces an annual rate, the ES is calculated as an annual rate. If the rate calculator for the person's qualifying payment produces a fortnightly rate, the ES is calculated as a fortnightly rate.

The daily rate of ES is calculated by dividing the annual rate by 364 or the fortnightly rate by 14 (as applicable).

The ES is not indexed.

Act reference: SSAct section 23(1)-'energy supplement', section 915B Rate of quarterly ES

Policy reference: SS Guide 5.1.10.20 ES - current rates

Income & assets test

The ES is added to a person's MBR before the income or assets test is applied.

A person's ES will be reduced by the application of the income or assets test after any amount for RA (if applicable) but before any amount of the pension supplement minimum amount or PhA (if applicable).

However, SS(Admin)Act sub-sections 43(5AA and 5AB) and 43(5B) ensure that a person who is entitled to receive any of the pension supplement minimum amount after the income or assets test is applied will receive the full amount of the ES.

Where a person is receiving quarterly ES, their rate of quarterly ES is reduced to the same extent (if any) that the component of their main rate of social security payment corresponding to their ES would have been reduced if they had not elected to receive their ES on a quarterly basis.

Act reference: SSAct section 1210(1) Application of income and assets test reductions and of compensation reductions …

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