Table 1 Employment Income | Compensation and Support Reference Library, Overpayment Management Manual, Ch 5 Investigation, 5.8 Tables

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Table 1 Employment Income

(other than self-employment)

Type of Income

What to Verify

What to request

Who to contact for Information

Wages & Salary

  1. Period of employment.
  2. Dates and gross amounts of wages, including any allowances and overtime.
  3. Gross wages for financial year (s) if point 2 not available.

Signed and dated income tax returns (ITRs) and Notices of Assessment.

Statements from each employer detailing the periods and wages earned, including details of any salary sacrifice payments.

If not available then request the PAYE payment summaries and confirm details of any salary sacrifice payments.

The pensioner (for ITRs), the employer for statements of earnings.

If employer not known the Australian Taxation Office (ATO) may be able to supply financial year details and employer's name.

Where a pensioner has a taxable income, a direct pro forma request to the ATO is effective in earnings review detected overpayments.

Variable/Short term employment

Contract work

  1. Period of employment.
  2. Dates and gross amounts of wages, including any allowances and overtime. Can be requested as hourly, weekly, or fortnightly rate.
  3. Gross wages for financial year(s) if appropriate or if point 2 is not available.
  4. Remuneration for contract.

Signed and dated ITRs (plus Notice of Assessment) from the pensioner for the relevant financial year (s).

Statements from each employer detailing the periods and wages earned. If not available, PAYE payment summaries.

Details of contract e.g., a copy.

The pensioner (for ITRs), the employer for statements of earnings.

If employer not known the ATO can supply financial year details and employer's name.

Fees - such as Director's, Councillor's fees

  1. Who paid the fees?
  2. Amounts paid and when.

For Director's fees, you may have to request signed and dated private company tax returns and other financial statements to verify the extent of the pensioner's involvement in the company. If more involved than just as director then investigate as for private company.

If other type of fees, contact paying body or request ITRs.

Initially contact the pensioners and/or their accountant for the tax returns. If that fails to bring a response then contact the ATO for the details.

Contact paying authority (such as the Council) for other fees and ensure the fees are not reimbursement for out of pocket expenses.

Notes on table 1

If using a PAYE payment summary, or copies of tax returns to assess an income amount, it is advisable to obtain a copy of the Notice of Assessment to verify that the income on the certificate or tax return was accepted by the ATO.

The ATO can only provide income summaries, so if it is necessary to check on deductions or any other details that may be on the tax return a copy of the full tax return should be requested from the accountant or pensioner.

If there is a suggestion of possible fraud, information obtained directly from the pensioner is not admissible as evidence in court proceedings as the information may be incriminating. Information may be obtained from a third party such as an employer under section 128 VEA however information requested from the ATO under section 128 VEA may not be admissible in court. Therefore the employer is the preferred source of information in these cases. The ATO can be a first point of call, but verification should be followed up with the employer.

It should be noted that salary sacrifice details will not appear on the payment summary or tax return. If any salary sacrifice payments were made, details should be requested separately, usually from the employer.

The earnings credit scheme ceased on 20 March 1997. For more information see DI C21/97. When investigating an overpayment due to earnings for a period prior to this date, any earnings credit that may have accrued should be taken into account when working out the periods for the overpayment. Earnings credit accrues from 1 January 1987 or from the date the service pension is granted, whichever is the later. Couples may accrue a combined earnings credit, and a pensioner does not have to be on maximum rate service pension in order to utilise an accrued earnings credit. The calculation of an overpayment involving earnings credit is not commenced until the credit is exhausted.

From 1 July 1993, carers became eligible to accrue an earnings credit, but they must not work more than 10 hours per week.

More information on earnings credit is contained in CLIK.