Paid leave and redundancy payments (advised before 19 April 2010) 108-07010090

Is the customer or partner claiming a new income support payment?

• Yes, leave details can only be recorded by service centre staff. Proof of leave entitlements (either an Employment Separation Certificate or a letter from the employer) will need to be provided. Service Officers at the Smart Centre Call should advise the customer to provide the information to the service centre
• Procedure ends here
• Go to Step 2
• No, for current customers, leave details can be recorded by Smart Centre Call and service centre staff. No verification will be required unless the customer cannot provide enough information for all mandatory fields to be coded. If all details are not available, the leave cannot be coded until the information is provided. Go to Step 2

Income is assessed under the relevant Income Test and Assets Test depending on which payment the customer is claiming or receiving:

• For customers who are eligible for Working Credits, leave payments are not employment income, they are ordinary income. Leave payments are included when calculating the accrual of Working Credits. The customer is unable to deplete their Working Credit balance to offset this income
• For pensioners, over Age Pension age, who are entitled to the Work Bonus, leave payments are not employment income, they are ordinary income. For information on the Work Bonus, see Work Bonus and balance for pensioners of Age Pension age
• For students and Australian Apprentices, income bank can be offset against income from paid leave
• Treated as a non-remunerative lump sum only if the employee does not go on the leave and is still in employment, see Treatment of lump sums

Is the customer, or their partner who received the paid leave, claiming or receiving one of the following payments:

• ABSTUDY
• Age Pension
• Carer Payment
• Special Benefit
• Disability Support Pension (Blind only)
• Service pension

or

If the person who received the paid leave is not on an income support payment, is their partner claiming or receiving one of payments listed above?

• Yes, payments are not affected by an Income Maintenance Period (IMP). Go to Step 4
• No, go to Step 5

However, the leave payment may affect the partner's payments, depending on what payment they are receiving.

Note: in cases where the employee does not go on leave but the employer pays out their leave entitlement or leave loading as a lump sum, the amount is assessed as a non-remunerative lump sum, see Treatment of lump sums.

Assess the leave payments the following way:

• For ABSTUDY, code the leave payment(s) on the OIN screen. If the employment is not terminated, it is important to also code a review to take the income off after the leave period ends. Check that information on EANS and OINS will result in the correct payment. Assess the asset value and any income generated by investment of the payment
• For Special Benefit, code the leave payment(s) on the OIN screen. See Special Benefit (SpB) income and asset test
• For non-IMP affected pensions, if employment is terminated, leave payments paid either in instalments or as a lump sum are disregarded as income. However, assess the asset value and any deemed income generated by investment of the payment. Record details of the redundancy payment on a DOC
• For non-IMP affected pensions, if employment is not terminated, code the leave payment(s) on the OIN screen (Note: due to a known system error, avoid using frequency 'One'. Use other frequencies as long as the amount and frequency produce the correct rate, for example: if the customer receives $200 each week, code, for the period of payment, Amount $: 400 and Freq: 2WE)
• If a leave loading is received at the same time as recreation leave, this should be added to the recreation leave payment and coded as one amount. This is regardless of whether the employment is ongoing or has been terminated
• It is important to also code a review to take the income off after the leave period ends. Check that information on OINS will result in the correct payment. Assess the asset value and any income generated by investment of the payment

Note: from 20 September 2009 pensioners who are of Age Pension age have their income based on the amount earned in the fortnight ending on their entitlement date.

Note: check that continuing income for the same employment is not also coded on the EANS screen for the same period. Variable employment income received in the period is recorded as income for one period on entitlement period end date.

Go to Step 7.

The customer or partner may be subject to an IMP. For more information on the IMP, see Income Maintenance Period (IMP).

Obtain details of the leave payments received.

Depending on the amount received and the period it is for, the customer or their partner may not be entitled to payment, or their rate may be reduced.

• If employment has been terminated, an IMP will apply from the date the payment was received
• If REC leave and leave loading is received at the same time, the leave loading is added to the REC leave payment and coded as one amount of leave
• If more than one type of payment is received, the leave payments are recorded separately on the IMP screen and the system adds the separate periods to which the payments relate
• If employment has not been terminated, an IMP will apply for the period covered by the payment
• Long service leave (LSL) - where the long service leave period is paid for weekends (a 7 day week) the IMP applied in relation to long service leave is:
• (No. of working days) divided by 7 x 5 = No. of IMP days
• Example: (90 LSL days) divided by 7 = 12.85 x 5 = 64 days

Code the leave payment(s) on the Income Maintenance Period (IMP) screen.

For couples, check the updates are made in the correct person's record:

• go to the IMP screen by coding 'IMP' in the Nxt: field

Code:

• The name of the employer from whom the employment leave payment has been received in the Description: field
• If known, the employee reference number in the Reference: field
• The Date Payt Received: field:
• The date the leave payment was received if employment is not continuing
• The start date of the leave period in this field if employment is continuing
• The type of leave for which the payment has been made in the Type: field. Use help '?' to determine the correct code needed
• The number of actual working days for each leave type in the No of Days: field (for example, Customer has 2 weeks holiday and uses 10 days recreation leave. Code 10 days not 14). Note: if customer is a part time worker, code the actual number of days the leave is for, not the equivalent number of weeks. If number of Days not known in relation to a redundancy payment, code the Average Gross Weekly Wage. Note: both the No of Days field and the Average Gross Weekly Wage can be completed - No of Days should be entered if known
• The total gross dollar amount for the leave type in the $ Amount: field. If a leave loading is received at the same time as recreation leave, this should be added to the recreation leave payment and coded as one amount
• The roll over amount in $ Roll over: field. Note: only Employment Termination Payment (ETP) components can be rolled over. Personal contributions should not be entered
• The source of information in the Source: field
• The date of receipt of information in the DOR: field

Press [Enter] to exit the IMP screen.

• Record the IMP details on a DOC
• Check for continuing earnings from the same employer (for example, coded as 2WE) and code them to zero on the Employment Income (EAN) screen via the Earnings and Reporting workflow for the period of the IMP. If the continuing earnings will return to the same amount after the period of leave, they can be coded back onto the EANS screen from the date that work will resume (date after the IMP ceases)
• If the customer is a statement reporter, record the Report Results (RR) screen
• Where the customer has more than one period of leave during the fortnight, code separately. Update customer's record to assess the asset value and any income generated by investment of the payment under deeming provisions
• Advise customer of likely effect on their payments

If the customer or their partner receives Family Tax Benefit, ask them if they need to update their income estimate to include any taxable income received in the leave payment.

Pension Bonus Scheme

If the customer or their partner is registered for the Pension Bonus Scheme, then the leave may affect their entitlement to the Pension Bonus. The case should be referred to the Senior Practitioner to consider if the entitlement to the Pension Bonus is likely to be affected. If so, a Financial Information Service (FIS) is required. There will be no new registrations taken for the Pension Bonus Scheme from 1 July 2014.

• Ensure all details are on a DOC
• If appropriate, process claim or reassessment and finalise activity via Assessment Results (AR) screen
• Advise customer of outcome