Section 1073H — Social Security Act 1991: Working out accruals and depletions of working credit for social security pensioners

This section determines, in respect of each working credit participant who is receiving a social security pension, whether, for each day in an instalment period: (a) there is an accrual to the participant’s working credit balance; or (b) the participant’s working credit balance is unaffected; or (c) the participant’s working credit balance is depleted; and, if there is an accrual to, or a depletion from, the participant’s working credit balance, the amount of that accrual or depletion. Method statement Step 1. Work out the amount (including a nil amount) of the participant’s employment income taken, in accordance with Division 1AA, to have been received on that day. Step 2. Multiply the amount determined under step 1 by 364. This is the participant’s rate of employment income on a yearly basis for the day. Step 3. Add to the participant’s rate of employment income on a yearly basis for the day the participant’s rate of any other ordinary income on a yearly basis for the day. This is the participant’s rate of total ordinary income on a yearly basis for the day. Step 4. Divide the participant’s rate of total ordinary income on a yearly basis for the day by 26. This is the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day. Step 5. Divide the yearly ordinary income free area applicable to the participant for the day under the ordinary income test module of the appropriate rate calculator by 26. This is the participant’s applicable ordinary income free area, expressed on a fortnightly basis, for the day. Step 6. If the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day, is less than $48, there is an accrual to the participant’s working credit balance, for the day, of an amount equal to one fourteenth of the amount by which $48 exceeds that rate. The maximum working credit balance is $1,000. Step 7. If the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day, is at least $48 but does not exceed the participant’s applicable ordinary income free area, expressed on a fortnightly basis for the day in accordance with step 5, the participant’s working credit balance for the day is neither increased nor reduced. Step 8. If the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day, is at least $48 and exceeds the participant’s applicable ordinary income free area, expressed on a fortnightly basis for the day in accordance with step 5, the participant’s working credit balance, if it is greater than nil on the day, is depleted on that day by the least of: (a) the amount of employment income determined under step 1; or (b) one fourteenth of the amount by which the participant’s rate of total ordinary income, expressed on a fortnightly basis, exceeds the participant’s applicable ordinary income free area, expressed on that basis; or (c) the participant’s available working credit balance.