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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.

From 1 April 2021, you’ll be able to earn more from work or other income each week before your benefit is affected. From 1 April 2021, you may earn up to $160 before tax each week before your benefit reduces.

If you get a benefit currently, any changes to your payments will be calculated automatically. You don’t need to do anything.

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 $160 (before tax) per week doesn’t affect your main benefit
    • after this your payment reduces by 70 cents for every dollar of income you earn.
  • If you’re a single beneficiary with one or more dependent children:
    • the first $160 (before tax) per week doesn’t affect your main benefit
    • if you earn between $160 and $250 a week (before tax) your benefit will reduce by 30 cents for every dollar of income you earn
    • any amount you earn over $250 a week (before tax) your benefit will reduce by 70 cents for every dollar of income you earn.
  • If you have a partner who is on a benefit in their own right (regardless of whether you have children):
    • the first $160 (before tax) per week that you and your partner earn in total doesn’t affect your main benefit
    • after this your payment reduces by 35 cents for every dollar of income you and your partner earn.
  • If you have a partner who isn’t on a benefit in their own right (regardless of whether you have children):
    • the first $160 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 payment reduces by 70 cents for every dollar of income you earn.

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

If you receive the supported Living Payment, the first $160 (before tax) a week of income will not affect your benefit. For income between $160 and $250 a week, your benefit will reduce by 30 cents in the dollar. For income over $250 a week, your benefit will reduce by 70 cents in the dollar.

Abatement for Sole Parent Support

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

If you’re a sole parent, you can earn $160 (before tax) a week without it affecting your benefit. For income between $160 to $250 a week, your benefit will reduce by 30 cents in the dollar. If you earn more than $250 a week your benefit will reduce by 70 cents in the dollar.

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 $219 gross (before tax) per week without your benefit being affected
    • your benefit is reduced by $1 for every $1 you earn over $219
    • if you earn more than $227 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 $207 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 $227
    • if together you earn more than $327 a week, you won’t receive any benefit (or incentive payments).

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

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