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.

3.4.1.70 Suspension instead of cancellation for Age recipients with employment income

Overview

From 1 January 2023, a person's Age may be suspended for up to 2 years if their total income exceeds their income limit and they have some income from employment.

For Age to be suspended and not cancelled, a pensioner must:

  • have income from remunerative work performed by the person in Australia as an employee in an employer/employee relationship
  • have an income reduced rate of pension that is nil as worked out at step 8 of the method statement in point 1064 A1 in Module A of Pension Rate Calculator A
  • notify Services Australia of the change in income or circumstances that results in their income reduced rate being nil, and
  • be residing in Australia.

Example: Judy is an age pensioner working as an administration assistant for a company in Australia one full day per week. Judy takes up an opportunity to increase her hours to full time for 9 months while a colleague is on leave. Her increase in wages means her Age is reduced to nil and her payment stops. Judy continues to report her income to Services Australia for 6 fortnights once her rate of Age is nil. Judy's Age will be suspended for up to 2 years.

Age recipients who do not meet the above criteria are unable to have the 2 year suspension applied.

Example: Rex is an age pensioner who does not work. His partner Jenny has not yet reached age pension age and is working as a casual. Jenny moves to full-time work and Rex's Age is reduced to nil. As Rex does not earn income from employment, he is not able to access the 2 year suspension period.

Act reference: SS(Admin)Act section 95D(1) Age – suspension instead of cancellation under section 93 or 94

SSAct section 1064-A1 Method of calculating rate, section 1068-A1 Method of calculating rate

When does the suspension period begin?

The suspension period starts from when the person's Age ceases to be payable because their rate is nil.

Act reference: SS(Admin)Act section 95D(1) Age – suspension instead of cancellation under section 93 or 94

Policy reference: SS Guide 3.6.1.100 Continuation, variation or termination of DSP

Employment nil rate period

The suspension period and the 12-week employment nil rate period run concurrently. This means the maximum duration of the suspension period is inclusive of the 12-week employment nil rate period.

The 12-week employment nil rate period still applies, so the pensioner (and their partner) maintains eligibility for other payments, supplements and concessions during the nil rate period.

Act reference: SS(Admin)Act section 95D(1) Age – suspension instead of cancellation under section 93 or 94

SSAct section 23(4A) Despite subsection (4) …, section 23(4AA) For the purposes of subsection (4A) …, section 1061ZEA Further extended qualification rule: loss of payment because of employment income, section 1061ZMA Further extended qualification rule: loss of payment because of employment income

Policy reference: SS Guide 3.1.12 Employment income nil rate period

When the suspended age pensioner is partnered

Partners of suspended Age recipients may have access to the same suspension period as the age pensioner.

To be able to be suspended the partner must:

  • be receiving one of the following social security pensions or Veterans' entitlements
    • age pension
    • disability support pension
    • carer payment
    • DVA age pension
    • service pension
    • income support supplement (DVA)
    • Veteran's payment

and

  • have their payment reduced to nil due to the same event or change in circumstances that resulted in their partner's suspension.

Where partners do not meet the above criteria, they are not able to be suspended.

Example: Andrew is an age pensioner who takes up work as a bus driver. His partner Lara provides care for her elderly mother and receives CP. Andrew's income means his Age and his partner's CP are reduced to nil and their payments stop. Andrew reports his income to Services Australia for 6 fortnights after his payment stops. Both Andrew and Lara are suspended for up to 2 years.

Act reference: SSAct section 23(1)-social security pension

SS(Admin)Act section 97C(1) Age, DSP and CP—suspension instead of cancellation under section 93 or 94 (partners)

PCC extension

Where a person's Age is suspended, they can retain their PCC for up to 2 years. Where the person's partner meets the criteria to be suspended, they can also retain their PCC.

Act reference: SSAct section 1061ZCA Extended qualification rule: former recipient of Age and partner

Policy reference: SS Guide: 3.9.2 PCC - qualification provisions

Length of the suspension

The maximum amount of time that Age can be suspended is 2 years (or for deemed suspension a maximum of 2 years and 14 days). After this time, the recipient's payment and their partner's payment must be cancelled.

If a recipient notifies Services Australia of an event or change of circumstances that results in their income reduced rate being nil on the last day of the 14 days notification period, payment is suspended for up to 2 years from this date.

If a recipient does not notify within the 14 day notification period, the person's Age is suspended for a period of 2 years and 14 days with effect from the day the pension had ceased to be payable under section 94.

Act reference: SS(Admin)Act section 95D(3) Suspension determination—event notified within notification period, section 95D(5) Suspension determination—event not notified within notification period

Restoration of Age

A person's Age may be restored if the person becomes payable within the 2-year suspension period, without needing to lodge a new claim.

The person must contact Services Australia to request restoration of their Age and update their circumstances, including their income and assets.

If the person does not request restoration of their Age within the 2-year suspension period, their Age is cancelled.

Act reference: SS(Admin)Act section 95D(7) Resumption of Age after suspension, section 95D(10) Cancellation of Age after period of suspension

Last reviewed: