Exemption for severe disablement

The purpose of the exemption for severe disablement is to provide an incentive for severely disabled clients to work and recognises the personal effort required for them to participate in employment.

If your client is severely disabled, the exemption allows you to disregard all or part of the income they receive from their work when assessing their rate of benefit payment. Generally, the exemption should help them to be better off financially because they are in employment.

Note exemption for severe disablement applies to open and sheltered employment.

This income exemption applies to all benefit types and is used in conjunction with other benefit personal earnings exemptions.

Note this income exemption does not apply when assessing income for Special Needs Grant or Recoverable Assistance Payment purposes as these forms of assistance are not defined as benefits.

For more information see:

• Blind clients subsidy
• Deciding entitlement for blind clients
• Personal earnings exemptions

The exemption for severe disablement applies to the income a client receives from their work. It does not exempt the hours of employment.

If benefit entitlement is based on employment status and your client is working in employment for more than the 'allowed' hours you will need to review entitlement to that benefit.

Note for Supported Living Payment (health condition, injury or disability or total blindness), the hours of employment only apply if your client is regularly working in open employment.

For more information see:

• Sheltered employment
• Guidelines for regular employment

The first step in considering an income exemption is to decide if the person is severely disabled.

For more information see:

• Deciding if your client is severely disabled
• Process for decisions
• People likely to be severely disabled

Note the income exemption can also apply to partners who are severely disabled.

The level of income you may exempt will depend on the circumstances of the individual. There are guidelines to help you make this assessment.

For more information see:

• Deciding amount of income exemption
• Payment process