Work test
Section 45TV VEA - basic rule for gainful work
Section 45TZ VEA - domestic duties not being gainful work
To accrue a bonus, a member must meet the minimum work requirements for each bonus year. They, or their partner, must perform gainful work for each bonus year. They must also keep a work record.
Minimum hours
Section 45TS VEA - work test VEA - full year period
Section 45TT VEA - work test VEA - part year period
A minimum of 960 hours gainful work must be performed in each full year bonus period by the individual. A minimum of two thirds (640 hours) of the gainful work must be performed in Australia.
Where the person is a member of a couple registered for the scheme, either the person, or their registered partner or both, can perform the work. Where both partners are working, at least one must work a minimum of 960 hours per year. It is not possible for the couple to combine their hours in order to meet the minimum requirement in any particular bonus period.
A person's working hours can be broken down in two ways:
- 20 hours of work per week for 48 weeks (includes 4 weeks leave), or
- 18.46 hours of work per week for 52 weeks.
The work test for a part-year period is worked out on a pro-rata basis. The pro-rata number of hours required is worked out by multiplying the minimum number of hours (960) by the number of days in the period divided by 365.
Impact of COVID-19 on meeting the Work Test requirements
Instrument 2021 R1 (F2021L00092) made under subsection 45TO(1) of the Veterans’ Entitlements Act 1986 enables certain people registered with the scheme to be taken to be non-accruing members of the scheme for a specified period.
Where a person is unable to work due to the impact of the coronavirus known as COVID-19, and as a result, is unable to pass the work test in order to accrue a bonus period, the person will be taken to be a non-accruing member for that period and will be able to continue in the scheme.
A similar instrument (F2020L01719) has been registered under subsection 92Q(1) of the Social Security Act 1991.
Hours worked outside Australia
Section 45TU VEA
The Commission has discretion to treat work outside Australia as being work completed in Australia because of special circumstances, for example:
- the person is unable to return to Australia due to circumstances either unforeseen or beyond the person's control,
- the person's work overseas is a normal part of their employment in Australia and is short in duration or
- the person is undertaking aid work funded by the Australian Government.
Gainful work for PBS
Section 45TV VEA - Gainful work—basic rule
The work performed during the period of deferment must be work for financial gain and involve a substantial degree of personal exertion. The Commission may treat an activity as gainful work in situations in which the activity performed by the person appears to meet the spirit of the legislation but cannot be clearly defined as gainful work. The collection of royalty payments or commissions for work performed before their registration would not be considered to be personal exertion.
Discretion to treat activity as gainful work
Section 45TW VEA - Commission's discretion to treat activity as gainful work
This discretion may be applied where a member of a couple commences work after their partner dies, in order to pass the work test. In this case the work performed by the deceased partner in the current bonus period may be considered as an activity that is recognised as gainful work of the survivor.
Under no circumstances can any form of voluntary work be considered as gainful work.
Irregular, infrequent and minor absences
Section 45TX of the VEA allows an exception for those absences which are irregular, infrequent and minor. Short-term absences such as a dental appointment, training course or similar will count as gainful work for the purposes of satisfying the work test requirement.
Paid or Unpaid Leave
In some circumstances, a person may have performed sufficient hours to satisfy the work test despite periods of paid or unpaid leave. They would remain as accruing members and the leave periods would not affect their bonus. If the type and duration of leave is specified in the legislative instrument made under section 45TO VEA, the period of leave may be treated as periods of non-accruing membership.
Legislation Library – Income Support – Pension Bonus
VE-DECLARATION/2007-Pension Bonus Scheme-Non‑accruing Member — s
Example – sufficient hours to satisfy the work test
A person's work record for one year shows 25 hours of gainful work per week for 44 weeks, followed by 8 weeks of paid and unpaid leave. The number of hours gainfully worked is 25 x 44 = 1100, so the person passes the work test for a full-year bonus period. The leave period is an accruing membership period.
Example – resumes work after leave period
A person's work record for one year shows 23 hours of gainful work per week for 40 weeks, 4 weeks of annual leave, and further work at 18 hours per week for 4 weeks. The number of hours gainfully worked is 23 x 40 + 15 x 4 = 980, so the person passes the work test for a full-year bonus period. The leave period is an accruing membership period.
Example – leave period treated as non-accruing membership
A person's bonus period commences 1 March 2005 and they work 650 hours during a 250 day period to 5 November 2005. The person then takes leave for a period of 120 days from 6 November 2005 to 5 March 2006. The person has failed to meet the work test requirement of 960 hours for the 365 day full-year period beginning 1 March 2005. The person can be considered a non-accruing member for the period 6 November 2005 to 5 March 2006. During the 115 day period from 6 March 2006 to 28 June 2006 the person works 320 hours. They have therefore met the work test by working 970 hours during the 365 day full-year bonus period from 1 March 2005 to 5 November 2005 and 6 March 2006 to 28 June 2006. The full-year bonus period is broken by a period of non-accruing membership.
Example – insufficient hours to satisfy the work test
A person's work record for one year shows 22 hours of gainful work per week for 40 weeks followed by 12 weeks of long service leave. The number of hours gainfully worked is 22 x 40 = 880. The person becomes a non-accruing member when they commence long service leave and the bonus period may continue when they re-commence work.
Failing the work test
A member must accrue at least one full-year bonus period to receive a bonus. Where a person has successfully accrued bonus period/s, and subsequently fails the work test, the member has 13 weeks from the end of the last bonus period in which to claim the bonus. If the person become a non-accruing or post 70/75 member after the end of the last bonus period, they have 13 weeks from the time their membership ceases to claim the bonus.