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Regular Earnings Income
Last amended: 27 August 2008
Examples of regular earnings include:
- full-time employment,
- regular part-time employment, and
- contract work
which is continuing, and which provides a regular and relatively unchanging rate of income.
Nature of regular earnings
Regular earnings are expected to continue over a prolonged period, or indefinitely, without periods of unemployment or sizeable variations in earnings occurring. A person with regular employment earnings should be able to provide reasonably accurate details of anticipated earnings. In these cases the calculation of the person's annual rate of income is facilitated by the knowledge that it is likely that there will only be minimal variation in earnings received from one review period to the next.
Annual rate of regular earnings
Where the annual income figure for the regular earnings is known (for example, a person coming into payment and producing last year's payment summary), it is reasonable to take this as the annual income rate. If the annual amount is not known but the income is earned on a regular basis at a constant weekly, fortnightly or monthly rate, then these known earnings can be converted to an annual figure. The period of assessment begins when the person first begins earning. Evidence of current regular earnings, and any known or notified changes, can be used to determine an assumed level of income, to carry forward into the next review period, or year.
Examples of regular earnings
- A pensioner coming into payment provides evidence (by way of payment summary) that his previous year's earnings were $10,000 and that the nature of his employment has not changed. This amount is held as the assumed annual rate of income for the duration of the agreed specific review period. This annual rate will then be adjusted for any confirmed changes in earnings as identified at the end of the review period.
- A pensioner provides evidence that he regularly receives weekly earnings of $160 and that his employment is to continue unchanged. An annual rate of income of $8,320 ($160 x 52) is held. If his earnings increase to $170 per week, the new annual rate of income is $8,840 ($170 x 52).
One-off earnings on top of regular earnings
Where a pensioner receives a one-off payment of earnings (for example, an annual bonus) in addition to their regular earnings, and is assessed annually, the one-off payment is simply added to the pensioner's regular earnings to arrive at the annual rate of income. The higher combined rate of income is then held for 12 months.
Where the pensioner's earnings are subject to specific review over periods of less than a year (for example, 13 week review periods), care should be taken to attribute the one-off annual bonus payment over four concurrent review periods.
Obligations to notify changes
The notification obligations under section 54 VEA require the pensioner to notify the Department of any event or change in circumstances (as specified) that may affect pension payability within the prescribed notice period (normally 14 days).
Where a specific review period is agreed, the events and changed circumstances that the pensioner must notify may be modified in keeping with the agreement that revision of the annual rate will occur at the end of the review period.
Date of effect for regular earnings changes
The date of effect for any change in regular earnings depends on whether or not the pensioner complies with their notification requirements.
Compliance requires that the pensioner notifies a specified earnings event or changed circumstance within the notification period, or alternatively notifies an event or change at the end of the review period (where those events/changes are covered by any agreed modification to the notification requirements).
Non-compliance arises where the pensioner does not notify an event/change within the notification period, where that event/change is not otherwise included as part of any agreed modification to the specified notifiable events under section 54.
Where there is compliance:
- If the event or change was required to be notified within the notification period, the date of effect for pension termination or reduction is the day immediately following the end of the notification period (section 56 VEA).
- If the event or change was not required to be notified within the usual notification period but was instead covered by the alternative notification requirements arising out of an agreed specific review arrangement, the date of effect for pension termination or reduction is the date as specified in the amending determination (section 56H VEA).
- For favourable pension reassessments, the date of effect is backdated to the start of the specific review period that is being reviewed (section 56G(3) VEA).
Where the pensioner breaches their notification obligations, the date of effect for pension termination or reduction is the date of the earnings event (sections 56A VEA, 56B VEA).
According to section 5H of the VEA income is:
- an amount earned, derived or received by a person for the person's own use or benefit;
- a periodical payment by way of gift or allowance; or
- a periodical benefit by way of gift or allowance.
An event is an incident or change in circumstances that may cause a change in income support entitlement. The 'date of event' is the day on which this event occurs.
The date of effect, or effective date, is the day on which a certain incident or 'event' begins affecting a pension assessment.