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2.7.5 When a person may be deemed with an ability to earn

Last amended 
18 October 2018

Some of the typical circumstances where a person may be deemed with an ability to earn can include:

1. Where a person is in the job seeking phase of their rehabilitation program and not genuinely seeking employment.

2. Where a person is medically cleared to work a certain number of hours per week but chooses to work a lesser amount of hours.

3. Where a person is self-employed, they may be deemed with an ability to earn based on what it would cost to employ a person to undertake similar work. This ensures that the amount is a reasonable reflection of what a person could earn as an employee. It is important that the person is given the chance to establish a sustainable level of income from their business before deeming is applied. A period of six to twelve months may be regarded as a reasonable time period for this to occur. A decision about when to deem an ability to earn must be based on evidence received from the person about the level of income being earned from their business.

4. At the end of a rehabilitation program, a person may be deemed with an ability to earn based on their actual earnings from work, to safeguard the Commonwealth in circumstances where the person subsequently leaves that work for reasons other than their DVA accepted conditions. Care must be taken in this circumstance to ensure that indexation of the deemed amount does not exceed actual pay increases the person receives in that work.  This can be achieved by the delegate making a new deeming decision where application of the wage price index to a notional deemed amount, means that the notional deemed amount exceeds a person’s actual earnings from employment.

When determining the amount a person is able to earn in suitable work, the delegate must consider:

  • the person's age, experience, qualification and skills;
  • any medical guidance provided by the person's treating medical practitioners;
  • the labour market; and
  • whether or not the person has been approved for Streamlined Access to Incapacity Payments.

The actual dollar amount should be determined by researching the labour market for actual rates of pay available in certain occupations, or award rates of pay in the relevant state or territory.  Each case is considered on its individual circumstances. Labour market research will generally be carried out by a person’s rehabilitation service provider.

The Department should continue to assist a person to find suitable work through an active rehabilitation program, for as long as a person continues to demonstrate a commitment to the job seeking phase of their rehabilitation program. Successful completion of a vocational rehabilitation program is defined by the person actually obtaining and retaining suitable work.

Those clients who have obtained employment, but have been approved for Streamlined Access to Incapacity Payments, should not have a deeming amount applied in relation to this employment. The intent of this initiative is to provide those with a mental health condition the flexibility to attempt a return to work.  Should this employment not be able to be sustained, then they will be able to easily have their incapacity payments reinstated. Section 9.13 contains detailed information about this initiative and its intent and impacts.