Delayed retirement payments

If the young person has been granted a benefit and then receives a retirement payment within 52 weeks after the date the young person's employment ceased, the benefit stand-down and date employment ceased must be reassessed.

To review the initial stand-down:

• divide the redundancy payment by 26 weeks (and 52 weeks if the young person's entitlement date to benefit is on or after 1 May 2005). Add the appropriate weekly redundancy amount to the young person's average weekly income received before employment ceased.
• re-assess the length of the initial stand-down period to determine a new commencement date. (Remember to use the calculation that provides the young person with the lesser stand-down period).

and

• establish an overpayment for any monies paid to the young person prior to the reassessed commencement date

If the young person receives a retirement payment more than 52 weeks after the date the date the young person's employment ceased, the payment is treated as a capital payment. The young person's entitlement to any Extra help must also be reassessed.

Any interest received from the investment of any lump sum must be charged as income.

In some situations, a person may cease their employment for a reason other than retirement and get a retirement payment as part of their final pay. For example, when a person resigns from their role voluntarily because they want to change careers or have a holiday.

When a person gets a retirement payment as part of their final pay but is not retiring, the retirement payment forms part of their earnings received in the 26 weeks prior to the commencement of benefit.

Retirement pay received when a person is not retiring is not used to determine the date employment ceased.