LEX 75376 - Documents for release - Page 1 of 6
Payslips and apportionment of employment income - general
instructions
1. These instructions apply to debts caused by employment income arising from an
employer/employee relationship and apply to debt raising processes and debts currently subject
to internal and external review, where the debt period falls before 7 December 2020. These
instructions do not apply where income arises through a contract for services. In the first instance,
consideration should be given to determine what the relationship is (i.e. employer/employee or
contract for services).
2. It is not expected that administrative reviews of historical debt decisions will be initiated by the
Secretary.
3. Former and current recipients are entitled to appeal any debt decision they do not agree with and
if they do, these instructions should be applied and the debts recalculated, if necessary.
4. For debts under internal or external review, any debts previously calculated using apportionment
between instalment periods, with employment income based on payslips, should be recalculated.
5. In calculating debts, the best available evidence of employment income should be used.
s47E(d)
Services Australia should adopt the following general approach to debt
calculations:
a. Where available, daily income information should be relied upon in the first instance to
calculate overpayments and debts, by calculating the total income earned in each instalment
period on a
daily earnings basis (the daily earnings method of calculation). For example, where
timesheets or payslip evidence is available to show the amounts earned from employment
income on any given day, then the income should be assessed on each day it was earned and
attributed to the respective days in the instalment period in which it was earned. This may
mean that one employment income period may span more than one instalment period and
each day’s earnings should be attributed to its respective day in the instalment period it falls
into.
b. If the available payslip evidence does not support the daily earnings method of calculation,
Services Australia should consider whether any of the pay periods to which the payslips relate
fall entirely within a single instalment period. If so, the income for that pay period should be
attributed solely to that instalment period.
c. s47E(d)
Where a pay period overlaps multiple instalment
periods, income is not to be apportioned between instalment periods.
LEX 75376 - Documents for release - Page 2 of 6
6. It is not lawful to raise or calculate employment income debts solely using Australian Taxation
Office (ATO) averaged annual income data. Refer to point 5 above for instructions.
7. If the potential debt being raised or recalculated arises from:
a. overpayment of an allowance (e.g. Newstart Allowance, Youth Allowance or widow allowance);
and
b. the relevant employment pay periods are greater than a fortnight; and
c. s47E(d)
d. s47E(d)
s47E(d)
8. s47C, s47E(d)
9. s47E(d)
a. s47E(d)
b. s47E(d)
c. s47E(d)
10. s47E(d)
11. s47E(d)
LEX 75376 - Documents for release - Page 3 of 6
s47E(d)
12. If a person has multiple employers, or multiple debt periods, Services Australia should use the best
information available for each employer and debt period. It is acceptable to use a mix of
methodologies to calculate a debt, but Services Australia should take care not to double count the
same income.
13. Services Australia should ensure it meets obligations under the social security law to seek
information that may affect an individual’s rate of payment or entitlement. s47E(d)
a. Under section 535 of the
Fair Work Act 2009 and Division 3 of Part 3.6 of the Fair Work
Regulations 2009, employers are not required to hold information such as pay records for more
than seven years, s47E(d)
14. These instructions relate to debt raising decisions and debt calculations under internal and
external reviews. There should be a consistent approach to the way in which debts involving
serious non-compliance and fraud actions and referrals are calculated using the best evidence
available. These instructions do not cover how prosecutions for fraud, etc. are managed by
Services Australia.
LEX 75376 - Documents for release - Page 4 of 6
Payslips and apportionment of employment income - general
instructions
1. These instructions apply to debts caused by employment income arising from an
employer/employee relationship and apply to debt raising processes and debts currently subject
to internal and external review, where the debt period falls before 7 December 2020. These
instructions do not apply where income arises through a contract for services. In the first instance,
consideration should be given to determine what the relationship is (i.e. employer/employee or
contract for services).
2. It is not expected that administrative reviews of historical debt decisions will be initiated by the
Secretary.
3. Former and current recipients are entitled to appeal any debt decision they do not agree with and
if they do, these instructions should be applied and the debts recalculated, if necessary.
4. For debts under internal or external review, any debts previously calculated using apportionment
between instalment periods, with employment income based on payslips, should be recalculated.
5. In calculating debts, the best available
probative evidence of employment income should be used.
That is, a finding of fact in relation to an amount of employment income earned, derived, or
received must be based on evidence which logically shows the existence of that fact. s47E(d)
Services Australia should adopt the following general approach to debt
calculations:
a. Where available, daily income information should be relied upon in the first instance to
calculate overpayments and debts, by calculating the total income earned in each instalment
period on a
daily earnings basis (the daily earnings method of calculation). For example, where
timesheets or payslip evidence is available to show the amounts earned from employment
income on any given day, then the income should be assessed on each day it was earned and
attributed to the respective days in the instalment period in which it was earned. This may
mean that one employment income period may span more than one instalment period and
each day’s earnings should be attributed to its respective day in the instalment period it falls
into.
b. If the available payslip evidence does not support the daily earnings method of calculation,
Services Australia should consider whether any of the pay periods to which the payslips relate
fall entirely within a single instalment period. If so, the income for that pay period should be
attributed solely to that instalment period.
c. s47E(d)
LEX 75376 - Documents for release - Page 5 of 6
s47E(d)
Where a pay period overlaps multiple instalment
periods, income is not to be apportioned between instalment periods.
6. It is not lawful to raise or calculate employment income debts solely using Australian Taxation
Office (ATO) averaged annual income data. Refer to point 5 above for instructions.
7. If the potential debt being raised or recalculated arises from:
a. overpayment of an allowance (e.g. Newstart Allowance, Youth Allowance or widow allowance);
and
b. the relevant employment pay periods are greater than a fortnight; and
c.s47E(d)
d. s47E(d)
s47E(d)
8. s47C
9. s47E(d)
a. s47E(d)
b. s47E(d)
c. s47E(d)
10. s47E(d)
LEX 75376 - Documents for release - Page 6 of 6
11. s47E(d)
12. If a person has multiple employers, or multiple debt periods, Services Australia should use the best
information available for each employer and debt period. It is acceptable to use a mix of
methodologies to calculate a debt, but Services Australia should take care not to double count the
same income.
13. Services Australia should ensure it meets obligations under the social security law to seek
information that may affect an individual’s rate of payment or entitlement. s47E(d)
a. Under section 535 of the
Fair Work Act 2009 and Division 3 of Part 3.6 of the Fair Work
Regulations 2009, employers are not required to hold information such as pay records for more
than seven years, s47E(d)
14. These instructions relate to debt raising decisions and debt calculations under internal and
external reviews. There should be a consistent approach to the way in which debts involving
serious non-compliance and fraud actions and referrals are calculated using the best evidence
available. These instructions do not cover how prosecutions for fraud, etc. are managed by
Services Australia.
