Mutual obligation requirements during an Income Maintenance Period (IMP) 001-09020070

The IMP takes into account all leave and redundancy payments paid to the customer and accumulated:

• over a period of employment, or
• as a condition of service

This includes maternity leave, long service leave, sick leave, rostered days off, public holidays, annual leave, leave loading and redundancy payments.

The IMP does not apply to any Employer Termination Payments (ETP) rolled over into deferred annuities, superannuation bonds, superannuation schemes, allocated pensions or approved deposit funds. If a job seeker rolls over their redundancy payment after an IMP has been applied, the IMP will be recalculated from the date the roll over occurs.

Under the IMP, leave and redundancy payments are treated as income for a period equal to that for which the leave was paid. Leave payments and redundancy payments (paid for a period of time), that is, 2 weeks' pay for each year of service, are rounded down to the nearest day.

Non-time dependent redundancy payments, for example $20,000 golden handshake, are divided by the employee's average gross weekly wage and the calculated number of weeks is rounded down to the nearest week. The level of income assessed will be calculated according to the rate paid by the employer. This will mean that most new claimants will be reduced to a nil rate for the period of the IMP.

In some cases, for example, permanent part-time workers who were on low incomes, the IMP may result in a reduced rate for the period of the leave. Current customers are more likely to receive a reduced rate of payment, as the income from employment did not preclude payment. The IMP will regard income from leave payments in the same way as other income (that is, subject to the relevant income test). Partners will be affected if there is excess income after the IMP has been applied to the primary beneficiary.

• If the IMP is 2 weeks or less and the job seeker is Centrelink managed, the job seeker must negotiate a Job Plan. If the job seeker is managed by an Employment Services Provider, they will be responsible for negotiating the job seeker's Job Plan
• If the IMP is more than 2 weeks and the job seeker would be on a nil rate of pay due to the IMP, the customer is excluded from Service Profiling Service Updates and is not required to agree to a Job Plan. Note: the system will automatically create an Urgent Issue to negotiate a Job Plan at the end of the waiting period. Service Officers should only negotiate a Job Plan for the Centrelink managed job seekers

The customer is also excluded from Service Profiling Service Updates for the entire period where the IMP results in nil payment.