Holiday pay

For treatment of holiday pay when a client stops work and applies for a benefit, see Employment ceased.

MSD charges income from holiday pay in a specified manner for clients getting a benefit.

When a client takes a period of annual leave and is paid holiday pay, MSD must charge the holiday pay for the period the leave relates to.

Example 1

Chan is getting Jobseeker Support and is working part time. Her weekly income of $250 reduces her Jobseeker Support to $298.32 per week.

Chan lets MSD know that she is taking 5 days annual leave for Monday 16 February to Friday 20 February and will be paid $250 holiday pay for that period.

MSD charge Chan's holiday pay of $250 against her Jobseeker Support for the period 16 February to 22 February.

Chan's Jobseeker Support rate is not affected and continues to be paid at the reduced rate of $298.32.

This treatment applies when:

• a client is paid their remaining holiday pay entitlement when their employment ends or
• a client was approved cashed up holiday pay while employed, but it was paid on or after the first week day after their employment ended

In these cases, MSD will charge the holiday pay from the first week day after their employment ended, for the number of week days the payment represents.

Note for the purpose of charging holiday pay in this scenario, week day:

• means a day of the week that is not a Saturday or Sunday and
• includes public holidays

Example 2

Blake is getting Jobseeker Support of $193.32 per week and is working part time.

Blake lets MSD know he is ceasing employment and his last day of work is Friday 13 February. The first week day after his employment ends is Monday 16 February.

Blake is paid out holiday pay of $800, representing 10 days. To calculate the daily rate, the holiday pay is divided by the number of days it represents, i.e. $800 ÷ 10 days = $80 per day.

MSD charge Blake's holiday pay as follows:

• Monday 16 February to Sunday 22 February: $400 (5 week days in period)
• Monday 23 February to Sunday 1 March: $400 (5 week days in period)

Blake's Jobseeker Support continues at $193.32 for Monday 16 February to Sunday 1 March.

From Monday 2 March, Blake's Jobseeker Support increases to $361.32 because he has no holiday pay remaining from this date.

When a client is paid any amount of cashed up holiday pay while still employed, MSD must charge the cashed up holiday pay for the period that it is received.

Example 3

Mele is getting Accommodation Supplement of $95 per week and is working full time.

Each week she is paid $960.00 wages in for her previous week of work.

In the week beginning 12 January Mele is paid $960 in cashed up holiday pay in addition to her normal weekly pay of $960 (in respect of her previous week of work). This equals a total of $1,920.

MSD charges the cashed up holiday pay against the week it was received, and charges her normal weekly pay for the period it was earned.

This means that her income is charged against her as follows:

• Monday 5 January to Sunday 11 January: $960 standard week of earnings
• Monday 12 January to Sunday 18 January: $1,920 income from earnings and cashed up holiday pay

Mele's Accommodation Supplement is reduced to zero for the week that the cashed-up holiday pay is received because her income is over the cut-out point for that week.