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Emergency Maintenance Allowance : Contents

Redundancy payments

A redundancy payment is a lump sum payment to compensate a person when their employer terminates their employment as their position is surplus to the employer's needs.

Redundancy payments do not include:

Note some of these payments may affect the date employment ceased and may be included in the income assessment when calculating the length of the initial stand-down.

Being made redundant

Redundancy can happen voluntarily, where an employee accepts redundancy willingly or as an enforced decision.

In both cases employees can get payments to compensate for loss of:

  • employment
  • tangible benefits or rights
  • prospects and promotions
  • status and security
  • income

Redundancy must not be confused with other reasons for an employee losing their job, e.g. an employee who is unable to perform duties, or has been laid off due to misconduct.

Cessation leave

Cessation leave is a component of a redundancy payment that recognises the employees length of service to the employer. The amount paid is based on the number of years continuous service the employee completed.

Cessation leave has nothing to do with leave entitlements and does not affect the date employment ceased.

Severance payments

The term severance is often used in place of redundancy; however redundancy payments and severance payments are different.

Severance payments may be made by an employer as part of a severance agreement to help resolve an unsatisfactory employment situation. They are over and above what a person is entitled to under their employment agreement.

Severance payments do not affect the date employment ceased.

How redundancy payments affect commencement date

Redundancy payments are included in the assessment of a person's last 26 or 52 weeks income to determine the length of their initial stand-down.

They are not used to calculate the date employment ceased.

For more information see:

Legislation

  • Period of benefit stand down: interpretation regulation 182 Social Security Regulations 2018
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