3.1.11.60 Working Credit & CDEP

Working credit & CDEP

The following people who are participating in a CDEP are eligible to be working credit participants:

• recipients under age pension age who receive a part pension (e.g. DSP or PPS),
• recipients under age pension age who receive CDEP and CPS.

Explanation: CDEP participants in receipt of CPS are taken to be receiving the social security pension or benefit for which they are qualified.

CDEP recipients who have working credits and who have excess CDEP payments and/or employment income from another source, continue to be qualified for their social security pension or benefit for the period it takes to deplete their working credits.

Qualification will continue until the earliest of:

• their working credits are reduced to nil, or
• qualification (other than related to the employment) is lost.

They may also qualify for an employment income nil rate period.

Act reference: SSAct section 1073J Working credit balance prevents loss of qualification in certain cases

Policy reference: SS Guide 3.1.11.10 Recipients Eligible for Working Credit, 3.1.11.30 Working Credit Depletion, 3.1.12 Employment Income Nil Rate Period

Effect of accrual on CDEP participants

Any excess CDEP income is counted as employment income, therefore a CDEP participant who receives CPS can accrue working credits when their excess CDEP wages plus all other ordinary income is less than $48.

Example: Robert is a single person receiving CDEP and CPS only. He has no other income.

Policy reference: SS Guide 3.1.11.20 Working Credit Accrual

Effect of depletion on CDEP participants

Any excess CDEP wages is counted as employment income, therefore a CDEP participant who receives CPS can use working credits to offset this income.

In the scenario below there are no changes to income during the fortnight, nor does the working credit balance reduce to nil during the fortnight. As a result the new working credit balance can be calculated on a fortnightly basis rather than on a daily basis that would be necessary if there were change points.

Example: Sarah is a single NSA recipient, receiving CDEP and has 100 working credits. She has $50 income from other sources. She receives the maximum rate of RA.

The amount of depletion is the least of:

• Working credit - 100
• Employment income - 20.90
• Total ordinary income - income free area = 70.90 - 62 = 8.90

Depletion = 8.90

Sarah's new working credit balance will be 91.10

Income used in the determination of rate will be:

• Total ordinary income - depletion amount = 70.90 - 8.90 = 62

As the income free area is $62 there will be no effect on Sarah's payment of $93.20 per fortnight.

Act reference: SSAct section 1073B Daily attribution of employment income, section 1073F Working out accruals and depletions of working credit for social security beneficiaries, section 1073G Working out the effect of a working credit depletion on the fortnightly rate of ordinary income for a social security beneficiary, section 1073H Working out accruals and depletions of working credit for social security pensioners, section 1073I Working out the effect of a working credit depletion on the yearly rate of ordinary income for a social security pensioner

Policy reference: SS Guide 3.1.11.20 Working Credit Accrual, 3.1.11.30 Working Credit Depletion, 4.3.3.10 General Provisions for Income from Employment, 4.3.3.20 Income from Employment or Independent Contracting, 4.3.3.30 Employment Income for Pensioners of Age Pension Age, 4.3.3.35 Employment Income for Pensioners Below Age Pension Age, 4.3.3.40 Employment Income for Allowees

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Last reviewed: 4 February 2008