Previous tax year
A client or their partner may declare income for a period in a previous tax year. There are 3 possible outcomes for the client depending on the amount of income declared and whether any previous income had been charged.
These outcomes are:
1. The client is due arrears following a review on their benefit. As the arrears will be issued in the current tax year no adjustment is required to the tax details or
2. The amount of the income declared is under the exemption and the client does not receive any Extra help. The client's SWIFTT record is noted accordingly or
3. A debt will be established and the tax details for this year will need to be adjusted accordingly as in the following example.
Example
A client's partner phones on Thursday 05/05/2022 to advise that they worked for the week Monday 14/02/2022 to Friday 18/02/2022 and earned $195.54 gross.
Manually assess the income deduction:
Gross income (excluding cents) | $195.00 |
Less income allowed before benefit is affected | $160.00 |
Equals income | $35.00 |
Amount benefit reduced on account of income (income over $160 reduces benefit by 70 cents per $1.00) | ($35 x 0.7) $24.50 |
To work out the benefit rate payable:
Maximum Jobseeker Support couple rate (net, as at 1 July 2021) | $453.62 |
Less reduction due to income | $24.50 |
Benefit rate payable | $429.12 ($214.56 each) |
Once you have calculated the benefit due for this week add the income to INCMA. A backdated review SBDR for both the client and their partner needs to be completed for this week.
The following is the process:
SBDR | $214.56 the week income earned 14/02/2022 to 20/02/2022 |
LSUM | a memo will be produced as a result of the backdated review with details of the debt amount to be added into the appropriate tax year. It is the net amount of debt which is added to SWIFTT |
SDBTI | debt inquiry for the client (F4 for STAXI) |
STAXI | select the appropriate year and DBT which will take you into the SDBTA screen |
SDBTA | add the debt type, add the benefit/pension code, add the debt status and breach type, add the net debt amount, this will also adjust the tax record for the client. Add the period that the debt represents and add any comments where appropriate - remember to commence recovery of the debt via SOFSI |
For more information see:
Legislation
- Calculation of income schedule 3, clauses 11-14 Social Security Act 2018
- Number of weeks for calculating weekly income schedule 6 Social Security Regulations 2018
- Appropriate number of weeks for calculating weekly income regulation 205 Social Security Regulations 2018
