3.1.2.20 Liquid Assets Waiting Period

Summary

The LAWP applies to ALL YA, Austudy, NSA and SA recipients whose liquid assets (1.1.L.50) exceed a specified amount. Some payments may have other provisions that exempt a person from the LAWP in some circumstances. These provisions are explained in the specific payment topic. The LAWP can vary from one to 13 weeks in duration depending on:

• the amount of the recipient's liquid assets, AND
• whether they are a member of a couple (1.1.M.120), AND
• whether they have dependent children (1.1.D.70).

Act reference: SSAct section 14A Social security benefit liquid assets test definitions, section 549A Liquid assets test waiting period (YA), section 575A Liquid assets test waiting period (Austudy), section 598 Liquid assets test waiting period (NSA), section 676 Liquid assets test waiting period (SA)

The rest of this topic explains the following about the LAWP:

• the payments it applies to,
• when it commences,
• the duration, and
• how it is calculated.

The treatment of some types of liquid assets is explained in 3.1.2.30 Treatment of Liquid Assets.

Payments the LAWP applies to

The LAWP applies to the following payments:

• newstart allowance,
• youth allowance,
• Austudy payment, AND
• sickness allowance.

Date of commencement for the LAWP

The following table indicates when the LAWP commences:

If a recipient is still working casually or part-time when they claim NSA, the delegate must decide when the recipient is deemed to be unemployed. This will usually be the date on which the last change to that employment occurred.

Example: A change in the hours worked or a change from full-time to part-time.

The LAWP can be self-served in part or in full. Where a claim for an allowance is made after the LAWP would have expired, the recipient is deemed to have served a LAWP and the LAWP is completed. This self-served LAWP is considered a served and completed LAWP where the recipient makes another claim in a 12-month period, and therefore the recipient is not required to serve another LAWP.

The LAWP and any non-compliance deferment or rate reduction period resulting from a breach are served concurrently. Any period remaining at the expiry of the waiting period would still need to be served.

Act reference: SSAct section 595 Persons may be treated as unemployed

Calculating the LAWP

The LAWP is calculated differently depending on whether the recipient is single or a member of a couple or has a dependent child. This is explained in the following table:

The maximum reserve amount is normally:

• $5,000 for a recipient who is a member of a couple AND/OR has a dependent child, and
• $2,500 for a recipient who is NOT a member of a couple AND does NOT have a dependent child.

However, from 1 April 2009 to 31 March 2011, these amounts will be doubled. The maximum reserve amount between these dates is:

• $10,000 for a recipient who is a member of a couple AND/OR has a dependent child, and
• $5,000 for a recipient who is NOT a member of a couple AND does NOT have a dependent child.

Recipients who are already serving a LAWP on 1 April 2009 will have their waiting period recalculated using the new maximum reserve amount. If the recalculation would result in the person's LAWP ending before 1 April 2009, then the LAWP is taken to end on 31 March 2009. Recipients who begin serving a LAWP on or before 31 March 2011 and continue serving it after this date will not have their waiting period recalculated.

Act reference: SSAct section 14A Social security benefit liquid assets test definitions

Duration of LAWP

The result of the calculation is the duration of the LAWP, as explained in the following table:

Income from GEERS

Payments made as a consequence of redundancy may be assessed as a liquid asset for new claims.

Policy reference: SS Guide 4.3.3.70 Income from General Employee Entitlements & Redundancy Scheme (GEERS)

Waiving the LAWP

The LAWP may be waived in full or in part when the recipient is in severe financial hardship as a result of unavoidable or reasonable expenditure (1.1.U.20). A recipient's reasonable cost of living does not have to be justified with receipts. The reasonable cost of living is an amount deemed by the delegate to be appropriate to the recipient's circumstances. The deemed amount cannot be exceeded. Reasonable costs of living cannot exceed the maximum rate of payment that the recipient would be entitled to.

Act reference: SSAct section 19C Severe financial hardship (ordinary waiting periods and liquid assets test waiting periods) definitions

Policy reference: SS Guide 3.1.2.10 Application of Waiting Periods

Exemption from the LAWP

Recipients can be exempted from the LAWP as explained in 3.1.2.70.

Working credit

A recipient serving a LAWP is not receiving a payment, so can only become eligible to accrue or deplete working credit after the waiting period has been served.

A LAWP is ignored when calculating the length of a break in payment for carrying over working credit balances. That is, the break in payment is measured to the date of grant, and not to the end of the LAWP. The carried over working credit balance becomes the recipient's opening balance on the day they start to receive their income support payment.

Act reference: SSAct section 1073E Opening balance

Policy reference: SS Guide 3.1.11.10 Recipients Eligible for Working Credit, 3.1.11.50 Working Credit Opening Balances & Carryovers

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Last reviewed: 1 June 2009