18.104.22.168 Short term available funds test for SpB
The short term available funds test (1.1.S.170) generally applies to people identified as in short term need of benefit. Occasionally however, delegates will need to use discretion in deciding whether to use the short or long term available funds test (1.1.L.90).
Example: Short term cases include a disaster victim, an expectant mother and the partner (1.1.P.85) of a person on strike.
Note: Where a person who would generally fall into a long term category of SpB has an expectation that they will find employment within 3 months, the short term available funds test should only be applied where the person has an actual job offer.
What is the short term available funds test?
The available funds tests are primarily about liquid funds (1.1.L.60). The following table explains the short term available funds test when the person has no exceptional or unforeseen expenses (1.1.E.140):
|If the person's available funds are …||then SpB is …|
|EQUAL to or LESS than the equivalent of 2 weeks SpB plus FTB at the maximum applicable rates||payable.|
|more than 2 weeks SpB plus FTB at the maximum applicable rates||precluded for a period until funds are reduced to, or below, this level.|
The liquid funds of a partner or bank accounts held on behalf of dependant children should also be taken into account. If the person's need is short term only, the value of a life insurance policy should NOT be taken into account.
Explanation: It is not reasonable to expect a person to surrender a life insurance policy where their need is short term only.
Exceptional or unforeseen expenses (1.1.E.140)
Some, or all of a person's available funds may be disregarded if they face, or have faced in the 4 weeks before the claim, exceptional or unforeseen expenses. A person is required to provide evidence of these expenses before they can be taken into account.
Payment can ONLY be made from the date of lodgement of the latest claim.
Calculating the preclusion period
If the person's available funds exceed the limit, the following formula is used to calculate the period for which SpB is precluded:
- Person's available funds minus (the maximum applicable rate of SpB plus FTB), divided by the weekly rate of payment.
If the person is a member of a couple (1.1.M.120), the combined rate of SpB is used in this calculation, EVEN IF payment will be made for only one of the couple. If the partner has excess income, the direct deduction income test should be applied to the couple's combined applicable fortnightly rate BEFORE that amount is subtracted from the available funds.
The following table explains how the preclusion period is determined:
|If the balance is …||then SpB is …|
|less than one week's payment||precluded for one week.|
|more than one week's payment||precluded for the number of whole weeks.|
Preclusion periods greater than 4 weeks
In general, if payment would not commence until after 4 weeks from the date of lodgement, the claim should be rejected. The person must be advised:
- of the period for which their financial resources are considered sufficient to support them, and
- of the date on which they may reclaim, and
- that a subsequent claim can be considered before that date if their financial circumstances change due to unexpected or unforeseen expenses.
Lodgement of a second SpB claim can only establish eligibility from the date of lodgement of that claim. Payment CANNOT be made for any part of the preclusion period already served.
Example 1: Calculating the preclusion period
A single person, 25 years of age has available funds of $1,100. If their fortnightly rate is $300, they are precluded under the available funds test and cannot be paid from the date of lodgement of the claim.
The following shows how the preclusion period is calculated:
|minus fortnightly rate||$300.00|
|divided by the weekly rate||$150.00|
The result of 5.3 weeks is rounded down to the nearest whole week - i.e. 5 weeks.
SpB is payable 5 weeks from date of lodgement of the original claim IF the person lodges a subsequent claim and all other requirements are met.
Example 2: Calculating the preclusion period
A partnered person with 2 children has available funds of $1,500. The combined fortnightly rate of SpB for this couple, including FTB is $800. Their combined available funds exceed this amount so both the person and partner are precluded under the available funds test and cannot be paid from the date of lodgement.
The following shows how the period of preclusion is calculated:
|minus fortnightly rate||$800.00|
|divided by the weekly rate||$400.00|
The result of 1.75 weeks is rounded down to the nearest whole week - that is one week.
SpB is payable one week from date of lodgement of the original claim IF the person meets all other requirements.
Policy reference: SS Guide 22.214.171.124 Determining the rate of SpB