Leave and termination payments paid by an employer 108-07010100

Leave and termination payments paid by an employer for a period beginning before 20 September 2009 or advised before 19 April 2010 are assessed differently.

Leave and termination payments received by a Farm Household Allowance (FHA) customer or their partner are to be treated and coded as if the person had been getting JobSeeker Payment (JSP).

If a customer's assets change as a result of receiving a leave or termination payment, assets should be updated. See Coding income and assets for Centrelink payments and services.

Assessment of leave depends on whether the employment to which the leave payment relates is ongoing or terminated.

See Process for information on the assessment of:

• Leave payments for a temporary absence from employment
• Paid out leave entitlements
• Purchased leave
• Rostered days off/flex time
• Stand down payments for non-teaching support staff employed by NSW Department of Education
• Termination payments/redundancy

Leave and redundancy payments can include:

• Annual leave
• Sick leave
• Personal leave
• Carer leave
• Family and domestic violence leave
• Ancillary and Defence leave (paid for absences such as for Australian Defence Force, Emergency Leave, eligible Community Service and Jury Service)
• Long service leave
• Leave loading
• Maternity or paternity leave
• Rostered days off paid out after termination
• Redundancy payment
• Payment in lieu of notice
• Gratuity or 'Golden handshake'
• Other payments received on termination of employment

Termination or leave payments received by customers through supported employment including Australian Disability Enterprise, the Support Wage System or another program of support, are assessed the same as leave or termination payments received from open employment.

ABSTUDY

For ABSTUDY customers, who receive a leave or termination payment from an employer, these payments are not Income Maintenance Period (IMP) affected.

Family Assistance

When a customer and/or partner notifies of leave or termination payments their annual family income estimate should be reviewed. The family income estimate determines the rate of Family Tax Benefit (FTB) and Child Care Subsidy (CCS).

If a customer or their partner receive CCS, the Activity Test Details (ATD) should also be reviewed.

Mobility Allowance

A customer receiving paid leave is considered employed for Mobility Allowance (MOB) purposes during the period of leave.

Pension Bonus Scheme

If the customer or their partner is registered for the Pension Bonus Scheme (PBS), the leave may affect their entitlement to the Pension Bonus. Refer the case to a Service Support Officer (SSO) to consider if entitlement to the Pension Bonus is likely to be affected. If so, a Financial Information Service (FIS) referral is required.

Low Income Health Care Card

LIC customers are not subject to an Income Maintenance Period (IMP). The treatment of lump sum leave and redundancy payments for LIC is different to the way such payments are treated for income support payments. See LIC income test for more information.

Working Credit allows certain income support recipients of workforce age to offset income from employment against credits accrued during periods of low or no income.

The Work Bonus is a discount applicable to the assessment of eligible income earned by pensioners over Age Pension age. On 1 July 2019, eligible income was extended to include self-employment income from personal exertion. Work Bonus does not apply to Parenting Payment Single (PPS) customers who are Age Pension age.

The Work Bonus or a Working Credit balance cannot reduce income assessed under an Income Maintenance Period.

For students and Australian Apprentices, income bank can be offset against income from paid leave.

If a customer is working casually, they are not entitled to leave payment/loading.

The customer may receive a loading as part of their ordinary pay in lieu of holidays or sick leave. This loading is included in their hourly rate of pay and assessed as employment income. This loading is coded with all other employment income.

The Victorian Government Sick Pay Guarantee provides casual employees with paid leave when they are unable to go to work. These are treated as a leave payment for a temporary absence of employment.