What is the Income Maintenance Period?
Income Maintenance Period (IMP) treats lump sum payments for outstanding leave and redundancy received at termination of employment as assessable income for the period relevant to the leave and the weeks of pay included in the redundancy. It gives rise to a period during which benefits may (and usually will) be precluded. The IMP commences on the day that you receive the leave payment.
What Centrelink benefits are affected?
The IMP is applied to all non-age pension income support payments with the exception of Carer payment.
How is the IMP calculated?
The IMP treats redundancy payments as income over a period equal to that for which the leave was paid. The level of income assessed will be calculated according to the rate paid by the employer.
| Example After 20 years of service and currently earning $70,000 pa, Fred accepts a bona fide redundancy based on three weeks pay per year of service (60 weeks). He has also accumulated 50 weeks of long service leave and 4 weeks of annual leave. Fred will be assessed as earning his salary for 114 weeks, therefore excluding him from receiving an income support payment for this period. |
When becoming aware of an entitlement to a lump sum payment associated with termination of employment – whether a voluntary redundancy or otherwise – be aware that planning financial arrangements for any Income Maintenance Period will be critical to maintaining a reasonable lifestyle; and must be considered prior to any benefit entitlement through Centrelink.
Exemption from the Income Maintenance Period
In cases of hardship, Centrelink may exempt an applicant from being subject to the IMP: see Human Services website page here.
Continuum Financial Planners at your service
Our experienced financial advisers are able to assist you with planning your financial position between the employment termination event and the date at which you will start to receive government benefits: contact us for an initial meeting that will be conducted at our cost.
