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The Amount of Lost Earnings

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The LOE Allowance may be granted in respect of any loss of after tax salary or wages or earnings. A person may suffer a partial loss of earnings; that is, they may still receive a salary or wage at a reduced amount. There is no legislative requirement that the loss of salary, wage or earnings be reduced to zero; section 108(2) VEA only refers to any loss of salary or wages, or loss of earnings, not an actual amount.

In addition, self employed persons who are suffering a reduction in income, in the form of salary or wages, but no net reduction in business revenue or profit, may still be eligible for the allowance. And inversely, a business may have reduced revenue impacting on profits or even generating a loss as result of the veteran's or member's temporary incapacity. When seeking evidence of any loss of after tax salary or wages, or loss of revenue or earnings it is preferred, given the potential for complexity arising for self employed persons, to separate these two types of losses.

A loss of after tax salary or wages can be granted based on evidence of what the person has previously been paying themselves from the business, and given the capped maximum amount for LOE, this calculation is the preferred simple approach. Considerations to be taken into account when calculating business revenue or earnings reductions include: demonstrated impacts on business revenue or earnings as shown in BAS; evidence of additional wages costs to replace the self employed person; and demonstrated reduction in profits or losses as shown in BAS statements.

Information pertaining to business profit and loss may not be forthcoming in the short run and BAS statements may need to be viewed over a number of reporting periods to gain a clear understanding of the impact of a persons temporary incapacity on business revenue and profits or losses and not resulting from other business factors. When considering these calculations, it is also important to be mindful the LOE Allowance can only be paid up to a maximum of the rate equivalent to the Special Rate of disability pension excluding Clean Energy Supplement. More information can be found on this topic under [glossary:Loss of Earnings Calculations for Self Employed Persons:].

The energy supplement is an ongoing, regular payment designed to help recipients meet the cost of living impact of the carbon price.