3.8.10.20 Payability of CPS

Summary

This topic provides information on:

• the objective of CPS,
• claiming the CPS,
• cancellation of CPS,
• participants below age pension age,
• participants of age pension age, and
• CPS accumulation option.

Objective

Allowee and pensioner recipients remain qualified for income support when they join a CDEP program and become a CDEP participant. Allowees need to claim the CPS to ensure that they do not lose qualification.

• Allowees MBR and RAA is reduced to nil by the multiple entitlement exclusion but they will receive the CDEP participant supplement (subject to income testing) and any add-ons if eligible.
• Pensioners' CDEP wages are treated as directly deductible income reducing the pension rate dollar for dollar up to a threshold amount (MBR of allowance). CDEP wages above the threshold are treated as ordinary income. The threshold is based on what an allowee in similar circumstances forgoes - the threshold is the allowance equivalent of the pensioner's notional MBR, but is capped at the NSA rate for a person aged 21 - 59 with no children. CPS is payable while the pensioner still retains a dollar of pension. Where they lose entitlement to pension but meet the CPS income test, they will remain entitled to CPS payment.

Claiming the CPS

The CPS becomes part of the rate of allowance or pension payable, however, continuing CDEP participants must elect to receive the CPS. To achieve this, a person who wants to be granted the CPS must make a claim on a form approved by the Secretary.

New provisions

A person who commences participation in a CDEP activity on or after 1 July 2009 will not be eligible to claim CPS. However, from 1 October 2011 eligible income support recipients who undertake CDEP activities will automatically receive the approved program of work supplement of $20.80 per fortnight. Eligible income support recipients are those who are in receipt of NSA, YA (other), PPP, PPS and DSP.

Phasing out

CDEP wages and consequently the CPS will be phased out. Continuing CDEP participants (i.e. those people undertaking a CDEP activity prior to 1 July 2009) can still receive CDEP wages and have access to the CPS (providing they remain qualified) until they are progressively transferred from CDEP wages to income support payments between 1 April 2012 and 30 June 2012.

Cancellation of CPS

Cancellation of the CPS for the next quarter occurs if the average income for the last quarter was above the income threshold.

CPS accumulation option

Allowee CPS recipients will be offered a choice on how they will receive their CPS payment (CPS and add-ons) when they sign up for it. The choice is limited to either receiving the payment fortnightly or 12-weekly. Where a person who has elected to have the payment made 12-weekly leaves the program before the end of the 12-week period, any benefits owing to them for the period they received CDEP wages will be paid as soon as practicable after they leave the program.

Pension CPS recipients will have their CPS paid fortnightly with their pension entitlements. The accumulation option is not available for pension recipients because there is no provision to accumulate pension instalments.

Act reference: SSAct section 771HK Maximum basic rate and remote area allowance not payable to CDEP Scheme participant, section 1188B CDEP scheme participants, section 1188H Person receiving CDEP Scheme Participant Supplement to be taken to be in receipt of social security benefit or pension, section 1188J CDEP Scheme participant may accumulate supplement, section 1188K Need for a claim

Policy reference: SS Guide 3.8.10.10 Qualification for CPS, 3.8.10.120 CDEP CPS Income Test

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Last reviewed: 20 September 2011