SAVINGS: EFFECT ON PAYMENTS
Liquid Assets Waiting Period
If you have savings or other ‘liquid assets’ over $5 500 you will have up to a maximum of 13 weeks to serve a “Liquid Assets Waiting Period”. That is, your first payment will be delayed.
Make sure you apply as soon as possible so that you can start serving any waiting period sooner rather than later.
What is a ‘liquid asset’?
‘Liquid assets’ are funds you can access at short notice (i.e. within 28 days) and include:
- Money in the bank, including term deposits or other money deposited (but not balances of redraw accounts)
- Shares and debentures
- Loans you have made to other people
- Some amounts due from a former employer
- Trust funds probably aren’t liquid assets, but it is a good idea to attach information about this anyway to avoid any potential future overpayment.
How long will you have to wait?
If you are single then your payment will be delayed 1 week for every $500 you have above $5 000.
The maximum period you can be made to wait is 13 weeks. Fractions are rounded down. So if you have $5 600 you would wait one week.
If you are part of a ‘couple’ these amounts double.
While you are waiting you can work and any income you earn in a waiting period won’t affect your payment (unless it is high enough to otherwise cut you off from payments).
Reducing the waiting period
You only need to declare the liquid assets you have at the time of claiming.
Your waiting period could be made shorter if you legitimately spend money (liquid asset) before you make a claim.
You run risks of overpayments and being taken to court for fraud if you hide money to get Youth Allowance or Austudy earlier. If they ever look at your bank accounts – which they have the power to do – they may notice if you have suddenly withdrawn large amounts of money just prior to claiming without explanation, particularly if that money suddenly bounces back into your account after your claim is processed.
1. Disregarded amounts
If you are a full-time tertiary student, you can disregard money you need to spend in that year to cover reasonable course costs such as:
- Student Services Amenities Fee
- Up-front course fees & HECS payments
- Student association fee
- Text books
- Equipment costs, including computer software and hardware
- Field trip expenses
- Study abroad costs
The value of this future expenditure is disregarded and in effect subtracted from your total declared liquid assets. There is a question in the application form about “immediate study expenses”. This is where you can declare these costs to Centrelink.
Proceeds from the sale of your home, if you are going to buy another one within 12 months of the sale, are also disregarded as part of your liquid assets.
2. Being exempt
a) If you are transferring from another payment (within a 14 day period) then you are exempt from the waiting period requirement.
b) If you have already served a Liquid Assets ‘Waiting Period’ at any time in the last 12 months you are also exempt.
3. ‘Severe financial hardship’
If during a Liquid Assets ‘Waiting Period’ you experience ‘severe financial hardship’ (ie. run out of money) due to ‘reasonable and unavoidable expenditure’ then the waiting period may be stopped (ie. ‘waived’ in full or part).
You are ‘in hardship’ at the point when your current level of liquid assets is less than the maximum fortnightly amount of any Youth Allowance or Austudy you would be payable. This amount is doubled if you a part of a ‘couple’. Advise Centrelink when this happens.
You will then need to show that you have spent the liquid assets you had at the time of claiming on ‘reasonable and unavoidable expenditure’. This includes costs such as:
• rent or mortgage payments
• medical expenses
• bills including rates, water, gas, electricity and telephone
• public transport
Other unavoidable or reasonable expenditure include spending on:
- cost of repairs or replacement to essential whitegoods at home
- school expenses (for your dependent children)
- funeral expenses
- essential expenses arising from the birth or adoption of a child
- expenditure to replace uninsured goods stolen or destroyed
- costs of insurance for or essential repairs to car or home
- car registration
- essential medical expenses
- or anything else ‘reasonable’ in the circumstances.
These don’t necessarily need to be justified with receipts, but a list will be needed.
Note: this expenditure is different from the money you are spending on education listed above – which are already disregarded as an asset.
Applying for a payment
As soon you know that you want to apply for a Centrelink payment you should lodge an “intent to claim”. You can do this by phoning 13 24 90 or by going to the website www.centrelink.gov.au and clicking on “Contact Us” then “Intent to Claim”.
After you have lodged your “intent to claim” you have 14 days to submit all of the necessary documents to your Centrelink office. If your payment is approved it will usually be back-paid to the day you lodged your “intent to claim”.
Remember to keep copies of everything you give Centrelink. Keep a record in your diary of Centrelink staff you speak to, or give things to, and ask for receipt numbers for phone calls.
If you want more information or your application fails, seek advice from an SRC caseworker.
Information and figures current at March 27, 2020. (CL-LAWP)
Important Notice and Disclaimer:
This information does not constitute legal advice. Check with a caseworker for the most up-to-date information. Do not accept verbal advice by itself from any source including Centrelink. Get a decision in writing. Without this subsequent appeals or backdating are at risk.