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Communtity Law Manual | Work & Income | How earning money will affect your benefit (“Abatement”)

Benefit rates: How much you’ll get, and how much you can earn

How earning money will affect your benefit (“Abatement”)

Although you’re allowed to earn money while on a benefit, what you earn will affect the amount of your main benefit and whether you’re entitled to supplementary assistance. Depending on how much you earn, your benefit will be reduced (“abated”) by a certain amount.

In May 2019, the government announced it would be raising the limits (the abatement thresholds) for how much you can earn while on Jobseeker Support, Sole Parent Support, and the Supported Living Payment. It plans to do this from 1 April 2020.

Abatement for Jobseeker Support

  • Social Security Act 2018, Sched 2 (“Income Test” definitions), Sched 4, Pt 1

    If you’re a single beneficiary without dependent children:

    • the first $80 gross (before tax) per week doesn’t affect your main benefit
    • after this the main benefit abates (reduces) by 70 cents in the dollar.
  • If you’re a single beneficiary with one or more dependent children:
    • the first $100 gross (before tax) per week doesn’t affect your main benefit (Work and Income also has a discretion to ignore up to $20 of your earnings that you use to pay for childcare)
    • any amount you earn over $100, up to $200, abates your main benefit by 30 cents in the dollar
    • any amount you earn over $200 abates your main benefit by 70 cents in the dollar.
  • If you have a partner who is on a benefit in their own right (regardless of whether you have children):
    • the first $80 gross (before tax) per week that you and your partner earn in total doesn’t affect your main benefit
    • after this your main benefit abates by 35 cents in the dollar.
  • If you have a partner who isn’t on a benefit in their own right (regardless of whether you have children):
    • the first $80 gross (before tax) per week that you and your partner earn in total doesn’t affect your main benefit (which is granted at a couple rate)
    • after this your main benefit abates by 70 cents in the dollar.

The reduction in your benefit applies to the week in which the money is earned. Because the benefit is paid one week behind, it will be possible for you, in a given week, to make up the reduction in your benefit with the wages that resulted in the reduction.

Note: You’re required to declare your income to Work and Income, but Work and Income may also act on information about your earnings obtained from the Inland Revenue Department (IRD). Sometimes overpayments can occur because Work and Income has incorrectly adjusted your payments on the basis of IRD information rather than the amount that you declared. It’s therefore important that you keep a record of each declaration of income that you make, so that if necessary you can show that an overpayment occurred when Work and Income failed to act on the information you provided.

Abatement for Supported Living Payment

Social Security Act 2018, Sched 2 (“Income Test” definitions), Sched 4, pt 3

The income test for the Supported Living Payment is based on your yearly earnings. The start date for this 12-month period will be the anniversary date of when you first started getting the benefit.

The abatement rates are as follows:

  • The first $5,200 a year (not counting $20 a week earned from your own efforts) doesn’t affect the benefit.
  • The next $5,200 reduces the benefit by 30 cents in the dollar – that is, if you earn $10,400 (after the deduction of $20 a week), then $1,560 will be deducted.
  • After $10,400, the abatement rate increases to 70 cents in the dollar.

Abatement for Sole Parent Support

Social Security Act 2018, Sched 2 (“Income Test” definitions), Sched 4, pt 2

The income test for Sole Parent Support is similar to the test for the Supported Living Payment (see above), except that instead of ignoring $20 a week earned by your own efforts, Work and Income can ignore up to $20 of your earnings that you use to pay for childcare.

Abatement for Youth Payment and Young Parent Payment

  • Social Security Act 2018, Sched 4, pt 6

    If you’re single:

    • you can earn up to $212 gross (before tax) per week without your benefit being affected
    • your benefit is reduced by $1 for every $1 you earn over $212
    • if you earn more than $262 a week, you won’t receive any benefit (or incentive payments).
  • If you have a partner:
    • you and your partner can earn, in total, up to $212 gross (before tax) per week without your benefit being affected
    • your benefit is reduced by 50c for every $1 that the two of you together earn over $212
    • if together you earn more than $312 a week, you won’t receive any benefit (or incentive payments).

If you’re receiving the Young Parent Payment, Work and Income also has a discretion to ignore up to $20 of your earnings that you use to pay for childcare.

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