Does Centrelink consider long service leave as income?

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Noreta has recently retired and wants to know whether her long service leave counts as employment income.

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Q. Noreta
I have retired from my job as a school crossing supervisor and I am set to receive long service leave paid at six hours per fortnight for a total of 60 hours. When I use the self-reporting link, do I put the long service leave payments in as work income?

A. Leave payments paid on cessation of employment are not assessed as income for pensioners of Age Pension age, so assuming that you are of Age Pension age, you will not need to report the payments as income.

If you had chosen to take your long service leave while continuing your work as a school crossing supervisor, that would change the situation.

If a pensioner receives paid leave as part of a continuing employer/employee relationship, the amount received is assessed as employment income under the normal income test. The period covered by a lump sum payment will be allocated to appropriate instalment periods and spread evenly throughout the instalment periods.

For example, if a pensioner takes eight weeks long service leave paid as a lump sum in advance with the first four weeks at full pay and the second four weeks at half pay, the advance lump sum in the first two fortnights is treated as employment income at the full pay rate with the second two fortnights assessed at the half pay rate.

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Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

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Written by Ben

8 Comments

Total Comments: 8
  1. 0
    0

    Thank you YLC as this article answers a question Ive been asking all over but no one seems to know the answer. The pervading opinion was that it will be heavily taxed. Phew, one less thing to worry about.

    • 0
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      C/L assessments and income tax are a different item. I retired on 8th Aug so that all my leave and long service payments were assessed in the new tax year. I would have been heavily taxed as you put it, according to my accountant.

  2. 0
    0

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Now is the season for discontent, so do something about it!
    It is time to kill off this insane hugely expensive pensioner whacking bureaucracy.

    It is time for all of us (yes that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even the UK and poorer New Zealand has a NO ASSET pension, so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be hassled by their crazed robo-debt scam and then waste even more time in the 3 million people waiting queues and more lost calls?

    We all (that means you) need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.

    Ask your MP do they really like being part of the system that allows this indirect abuse of the elderly?

    This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

    Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?

    • 0
      0

      I agree. Getting rid of Centrelink from the lives of Retirees MUST be a priority for all Retirees as well as all Pre-Retirees (i.e. everyone).

      Ideally, it should be Universal Age Pension with NO tests, paid to all by ATO after a simple one-time Application, once you have reached Age 65 yrs, and say 15 Years of Residency.

      To achieve this, all MUST act and not sit back waiting for others to do the work for them. NO EXCUSES for inaction.

      Besides Demanding change from your MP as GrayComputing suggested, I also suggest all MUST make Submissions to the “Retirement Income Review” being run now by the Treasurer (see their Internet web page for how to Submit, it is quite easy by Email or Post), with Last Date for Submissions being 3rd Feb 2020.

    • 0
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      Spot on Gray ! However its another scam. That is whichever government is in charge, they are desperate to keep unemployment stats down to prove their employment credentials. Cutting back on CL would mean a massive number of unemployed. Just take a look at Qld and Victoria who have bumped up their PS to record numbers. Nothing will change until Australia gets rid of one layer of government. Now that the internet an mobile phones have enabled conference calls and the like, why do we need so many politicians to manage 25 million people ? Services are duplicated or triplicated which justifies the numbers. Now if Australia wasn’t such a wealthy company it would be massively run differently.

  3. 0
    0

    I retired last year and had 9weeks of long service and leave payments coming. I made one phone call to Centrelink. I was advised the payments would not effect my pension but to advise Centrelink when I actually received the payment. I sent an email and also called them. They thanked me and that was that.


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