Allowances and payments
NOTE: See also A Guide to Australian Government Payments for more information about allowances and payments.
Austudy
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To be eligible for Austudy (SS Act ss 7, pt 2.11A), a person must satisfy an activity test, be at least 25 years old, and be an Australian resident. Waiting periods may apply, including a preclusion period for seasonal workers.
For eligibility details, see the Services Australia website: www.servicesaustralia.gov.au/who-can-get-austudy?context=22441.
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The rate of Austudy (SS Act ss 581, 1067L) depends on whether the person is single or has a partner and whether the person has dependent children. The income and assets test also applies to Austudy. In addition, a special rate is available for long-term income-support recipients who are starting full-time study or an Australian apprenticeship.
JobSeeker Payment
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Since March 2020, the JobSeeker Payment (SS Act pt 2.12, div 1) has replaced the Newstart Allowance as the main working-age income-support payment.
To be eligible for the JobSeeker Payment, a person must be aged 22 or older but younger than the Age Pension age. The person must:
be unemployed (i.e. primarily concerned with finding full-time work, and not significantly engaged in setting up a business or some activity that interferes with their ability to look for, or take up, employment); or
be sick or injured and, as a result, be unable to do their usual work or study for a short time (the recipient has to meet certain rules and provide a medical certificate);
be an Australian resident;
be prepared to enter into an Employment Pathway Plan and fulfil the ‘mutual obligation’ requirements;
not be involved in industrial action involving the person or their trade union;
not reduce their job prospects by moving to an area with lower employment rates; and
not be enrolled as a full-time student.
The JobSeeker Payment is also available to New Zealanders for a limited six-month period. To be eligible, a New Zealander must have:
a special category visa;
arrived in Australia after 26 February 2001; and
continuously lived in Australia for 10 years on the special category visa.
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Mutual obligations are tasks and activities that recipients of the JobSeeker Payment agree to do, that are designed to help them find employment. Participants must meet their mutual obligation requirements each month in order to keep receiving their JobSeeker Payment. Participants’ engagement with their mutual obligation requirements is typically tracked by a points system, with participants needing to reach a certain number of points each month.
Recipients of the JobSeeker Payment who are at least 55 years old, who are principal carers or who are in the Community Development Program have different requirements.
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Employment Pathway Plans are written agreements ‘negotiated’ between Centrelink and a recipient of participation payments. In practice, they are generally negotiated with a job network provider, but must be approved by Centrelink. Centrelink can refer to Employment Pathway Plans as ‘Job Plans’.
Employment Pathway Plans require the person to do things to improve their chances of obtaining employment. These include job training, paid work experience, unpaid voluntary work, and applying for a certain number of jobs in a period. These plans can also include activities such as preparing a CV, participating in non-vocational programs (e.g. rehabilitation programs), and any other activity designed to reduce the disadvantage the recipient may have in the labour market.
The JobSeeker Payment is not payable until a person signs an Employment Pathway Plan. If a person fails to comply with the terms of their Employment Pathway Plan without a reasonable excuse (which was previously referred to as a ‘participation failure’), this may result in compliance action (see ‘Compliance with mutual obligations requirements’, below).
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Generally, a person must wait seven days from the date of the claim before becoming eligible to receive the JobSeeker Payment. The waiting period may be less if the person has transferred from another income support payment within the previous 13 weeks. The waiting period may be reduced or waived because of financial hardship.
Payment of the JobSeeker Payment may be deferred where the person has liquid assets of at least $5500 (single) or $11 000 (member of a couple or with dependent children).
Migrants who entered Australia or became permanent residents after 4 March 1997 must wait 104 weeks to be eligible to receive the JobSeeker Payment. However, migrants who were granted permanent residence visas on or after 1 January 2019 must wait 208 weeks. Although, migrants may receive the Special Benefit in some circumstances (see ‘Special Benefit’, below). Waiting periods might also apply to people who receive payouts of sick leave, annual leave, long service leave or parental leave, those who receive a termination payment or redundancy payment, or those who have done seasonal work in the six months before the claim.
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The rate of the JobSeeker Payment (SS Act ss 643, 1068) varies according to whether the recipient:
is single;
is a member of a couple;
has dependent children; or
is aged 55 and over.
A person on the JobSeeker Payment may also be eligible for Rent Assistance (see ‘Rent Assistance’, below).
The payment is reduced if the recipient’s (or their partner’s) income is above the income threshold. Eligibility for the payment is also subject to an assets test.
Parenting Payment
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The Parenting Payment (SS Act ss 7, 500) can be paid to a person who has at least one child. The parent must be an Australian resident. The Parenting Payment (partnered) (‘PP (partnered)’) is paid to a member of a couple where the child is under six years old. The Parenting Payment (single) (‘PP (single)’) is paid to a single person where the child is under 14 (see SS Act s500D).
The rate of payment, the income test and the assets test are different for the PP (partnered) and PP (single) (see ‘Rate of payment’ (SS Act ss 503, 1068A, 1068B), below).
For eligibility details, see the Services Australia website: www.servicesaustralia.gov.au/who-can-get-parenting-payment?context=22196.
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Once the youngest child of a Parenting Payment recipient has turned six years old, the person will be required to sign an Employment Pathway Plan. Failure to comply may result in a penalty being imposed.
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The PP (single) rate and PP (partnered) rate are subject to an assets test and income test. The PP (partnered) rate depends on whether the person’s partner is receiving a benefit (SS Act ss 503, 1068A, 1068B).
Special Benefit
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The Special Benefit (SS Act ss 7, 729, 731) is a discretionary payment that provides income support for some people who are unable to get any other social security income support payment, and who are experiencing financial hardship due to circumstances outside their control.
For eligibility requirements, see the Services Australia website: www.servicesaustralia.gov.au/who-can-get-special-benefit?context=22281.
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The Special Benefit is paid at a rate that is not more than the JobSeeker Payment, Austudy Allowance (see above) or Youth Allowance (see below) that the person would receive if they qualified for that benefit (SS Act s 746).
Under Centrelink’s policy, a strict income test is applied. There is no ‘free-income area’, so any income a person receives reduces the rate of the Special Benefit that they receive (i.e. for every $1 of the person’s income, $1 is deducted from their payment). The rate may also be reduced if the person receives free rent, board or lodging.
Rent Assistance may also be payable (see ‘Rent Assistance’, below). Education Entry Payments and Pensioner Education Supplements may be payable to single parents who are receiving the Special Benefit.
Centrelink also applies an ‘available funds’ policy that examines a person’s liquid assets and takes into account whether a person is likely to be dependent on the Special Benefit in the short term (i.e. less than 13 weeks) or in the long term (i.e. more than 13 weeks). To be eligible to receive the Special Benefit in the long term, a person can have no more than $5000 in available funds. To be eligible to receive the Special Benefit in the short term, this policy is even more restrictive.
Youth Allowance
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Youth Allowance is an income support payment for eligible full-time students or apprentices. The payment can also be accessed by unemployed young people and part-time students.
To be eligible to receive the Youth Allowance (SS Act ss 7, 540–556), a person must be an Australian resident or have a ‘protected special category visa’. Although a person who has a non-protected special category visa, who has lived in Australia continuously for 10 years since 26 February 2001, may, in limited circumstances, be eligible to receive the Youth Allowance for a one-off, six-month period.
For further details on eligibility, see the Services Australia website: Full-time students and apprentices (www.servicesaustralia.gov.au/who-can-get-youth-allowance-for-students-and-apprentices?context=43916) and unemployed young people and part-time students (www.servicesaustralia.gov.au/who-can-get-youth-allowance-for-job-seekers?context=43921).
Under 18-year-olds
People aged 16 or 17 who live at home and are full-time secondary school students are not eligible to receive the Youth Allowance.
To be eligible to receive the Youth Allowance, a 16- or 17-year-old must be required to live away from home under section 1067D of the SS Act, or be considered to be independent under section 1067A.
Young people aged 16 and 17 normally have to do full-time education or training to receive the Youth Allowance. However, they may be exempted if one of the following applies:
the person has a temporary incapacity due to illness or an accident;
the person has a disability or learning difficulties;
the person is pregnant and the expected date of confinement is within six weeks;
the person has given birth within the last six weeks;
the person has been refused enrolment and no other education or training place is available within a reasonable distance;
the person is required to provide full-time care for a family member who is incapacitated due to illness or accident and the incapacity is, or is likely to be, of a temporary nature;
the person is homeless;
the person is experiencing a personal crisis or is a refugee (in some circumstances);
the person has suffered a major disruption of their home such as fire damage, flooding, earthquake damage, vandalism or burglary;
the person has part-time work/education for at least 25 hours per week;
the person has a drug or alcohol problem;
the person is the subject of a community service or juvenile justice order which reduces the person’s capacity to engage in full-time education;
the person is receiving Commonwealth-funded intensive assistance for jobseekers or state, territory or community-provided case management, or, where no intensive assistance or case management place is available to the person, is suitable for and agrees to undertake intensive assistance or case management; or
any other circumstances which may make it unreasonable for the person to be in full-time education or training.
For the purposes of determining the correct rate and the application of parental means testing, a young person is classified as dependent at home, or dependent and required to live away from home, or independent.
Required to live away from home
A young person (aged 16 to 21) is considered to be required to live away from home if they:
are not independent;
do not live at a parent’s home; and
need to live away from home for education, training or work, or their prospects are significantly increased if they live away from home, or because they need to live away from home because they are a new apprentice (SS Act s 1067D).
Independent
A young person is independent (SS Act s 1067A) if they:
are an orphan;
are a refugee not wholly or substantially dependent on someone else and without a parent living in Australi
are self-supporting due to an employment history as defined in the legislation;
have an employment history as defined in the legislation, are unsupported, and are disadvantaged in relation to employment or education;
are or have been married, in a registered relationship, or in a de facto relationship for a year;
have a dependent child;
have parents who cannot exercise their responsibilities;
are in state care;
cannot live at home due to extreme family breakdown, serious risk to physical or mental wellbeing due to violence, sexual abuse or other unreasonable circumstances, lack of stable accommodation; and are not receiving continuous support, whether financial or other, from a parent, guardian or the state;
have a partial capacity to work (Youth Allowance (job seeker) only);
are aged 22 or older.
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The Youth Allowance is paid subject to:
the personal income and parental means tests (if the person is not independent); or
the personal income and assets tests (if the person is independent and single); or
the personal income and assets tests, and the partner income test (if the person is independent and a member of a couple).
The parental means test applies to young people who are not independent, including those required to live away from home. The Youth Allowance reduces by 20 cents for every $1 the parent’s income exceeds a threshold ($62 634). This reduction is shared between others subject to this parental income test who receive specified payments. There is also a maintenance income test.
Under the personal income test, the Youth Allowance for full-time students is reduced as the student’s income increases. However, the first $9724 of a merit and equity-based scholarship is exempt. A job seeker can earn $150 per fortnight and a student or Australian apprentice $509 per fortnight without affecting the Youth Allowance rate. The rate of reduction after that changes frequently; contact Centrelink for specific rates.
New Youth Allowance (student) recipients can get a Student Start-up Loan (SSL). The SSL replaced the Student Start-up Scholarship. Currently the SSL is $2546 per annum and is paid in two instalments of $1273. The SSL is repayable under the same arrangement as Higher Education Loan Program debts.
Youth Allowance (student) recipients who are required to live away from home to study full-time may, in some circumstances, be eligible for a Relocation Scholarship of $5385 for their first year, and a reduced amount for further years (with the amount varying depending on their circumstances). The relocation scholarship is not available for students who move from one major city to another.
Allowances and payments
Chapter: 5.1: Dealing with social security
Contributors all from Victorian Legal Aid: James Hogan, Deputy Managing Lawyer; Julie Riva, Associate Public Defender (Civil Justice); Kate Brown, Lawyer; Patrick Noyelle, Senior Lawyer; and Tom Durkin, Lawyer
Current as of: 14 October 2024
Law Handbook Page: 280
Next Section: Compliance with mutual obligations requirements
