The Centrelink Income Maintenance Period: how redundancy and leave payouts affect JobSeeker eligibility before Age Pension age

For Australian late-career employees made redundant or finishing employment with substantial leave payouts before reaching Age Pension age (currently 67 for everyone born on or after 1 January 1957, since 1 July 2023; Services Australia — who can get Age Pension, https://www.servicesaustralia.gov.au/who-can-get-age-pension, accessed 8 May 2026), the gap between end of employment and Age Pension eligibility is a real planning concern. Some clients have sufficient super and personal resources to bridge the gap through early retirement; others need to claim JobSeeker Payment as a working-age benefit during the gap until Age Pension eligibility kicks in. The Centrelink Income Maintenance Period (IMP) under Module C of the working-age rate calculators in the Social Security Act 1991 is the rule that determines when JobSeeker (and certain other working-age payments) becomes payable after a person has received substantial end-of-employment payments (Services Australia — Income Maintenance Period, https://www.servicesaustralia.gov.au/income-maintenance-period, accessed 8 May 2026; DSS Social Security Guide 3.1.10, https://guides.dss.gov.au/social-security-guide/3/1/10, accessed 8 May 2026). The IMP treats the redundancy package, leave payout, or similar payment as a deemed continuing income stream, deferring the start of JobSeeker by a calculated number of weeks. The rule reflects the policy that termination payments are an alternative to ongoing wages and the recipient should be supported by those payments before claiming social security as if without resources.

The payments that trigger the IMP include a range of end-of-employment income-replacement amounts. Annual leave payments on termination — the cash payout for accumulated annual leave that the employee didn't take during employment — count toward the IMP. Long service leave payments on termination — typically a substantial amount for long-tenured employees — also count. Redundancy payments, both the genuine redundancy component (which has specific tax treatment under the genuine redundancy concession) and any non-genuine component, count in full toward the IMP. Other termination payments including pay in lieu of notice, ex gratia payments associated with termination, and similar amounts are within scope. The IMP captures the gross amount of these payments — before tax, before deployment, before any redeployment to super or other purposes.

The calculation methodology is straightforward. The IMP duration in weeks equals the gross leave-and-redundancy-related payments divided by the recipient's most recent weekly earnings rate. For a 64-year-old made redundant with $90,000 in combined redundancy and leave payouts who was earning $1,500 per week before termination, the IMP is $90,000 / $1,500 = 60 weeks. JobSeeker Payment cannot be paid for the 60 weeks from the day after termination. After the IMP elapses, JobSeeker can be claimed subject to the standard income and asset tests. For a longer-tenured employee with $200,000 in payments and the same $1,500 weekly wage, the IMP would be 133 weeks — over 2.5 years — typically pushing the eligibility date well past the gap to Age Pension age for clients close to that threshold.

A critical clarification is that the IMP does not apply to Age Pension itself. Age Pension is not a working-age payment and isn't subject to the IMP rule. Once the recipient reaches Age Pension age (currently 67), they can claim Age Pension regardless of any IMP that would have applied to JobSeeker (DSS Social Security Guide 3.4.1.10 — Qualification for Age, accessed 8 May 2026). So for a client made redundant at age 65, the IMP would defer JobSeeker eligibility by some number of weeks — but Age Pension is available at 67 regardless. For clients at or close to Age Pension age, the practical pathway is often to bridge from termination to Age Pension age using the redundancy package and other resources, and skip the JobSeeker question entirely. For clients further from Age Pension age (made redundant at 60, 61, 62), the IMP and JobSeeker become more significant — the IMP covers part of the gap but the post-IMP period needs JobSeeker (subject to means test) until Age Pension age.

The practical scenarios illustrate how the IMP plays out. A 64-year-old made redundant with $90,000 in payments and a previous weekly wage of $2,000 produces an IMP of $90,000 / $2,000 = 45 weeks, taking eligibility to roughly age 65. With Age Pension age at 67, the recipient may need to bridge another two years from the IMP-end to Age Pension age through other means — super withdrawals if eligible at age 60+ under retirement conditions, JobSeeker subject to means test, personal savings, family support. A 60-year-old made redundant with the same $90,000 / $2,000 setup produces the same 45-week IMP, but now bridges only to age 61 with six years still to Age Pension age — the post-IMP period is much longer and means-tested JobSeeker becomes a more substantial component of the bridging strategy. For clients with substantial super accessible from age 60 (under standard retirement conditions of release), super drawdowns can replace JobSeeker as the income source for the post-IMP gap.

The interaction with the Liquid Assets Waiting Period (LAWP) is worth noting. The LAWP applies a waiting period to JobSeeker and similar payments based on the recipient's liquid assets above a "liquid assets reserve" threshold of $5,500 for a single person without dependants, or $11,000 for a single person with dependants or for a member of a couple (Services Australia — Liquid Assets Waiting Period, https://www.servicesaustralia.gov.au/liquid-assets-waiting-period, accessed 8 May 2026; DSS Social Security Guide 3.1.9, https://guides.dss.gov.au/social-security-guide/3/1/9, accessed 8 May 2026). The waiting period is calculated as one week for every $500 (single no dependants) or $1,000 (others) of liquid assets above the reserve, capped at a maximum of 13 weeks. The LAWP runs concurrently with the IMP — both must be served before JobSeeker commences. For redundancy clients who hold the package proceeds in their bank account or as term deposits, the liquid assets reserve is typically exceeded enough to trigger the maximum 13-week LAWP. Whether the IMP or LAWP is the longer waiting period determines the actual JobSeeker start date. For most clients with substantial redundancy packages, the IMP is the binding constraint (longer than the 13-week LAWP maximum), but for clients with modest redundancy packages and substantial liquid assets, the LAWP may extend the wait beyond a short IMP.

The leave-management question offers some planning flexibility for clients with control over the timing. Annual leave and long service leave taken during employment are paid as ordinary wages — they extend the employment period but don't trigger IMP. Leave taken as a payout on termination counts in full toward the IMP calculation. For a long-tenured employee with substantial accumulated leave (perhaps 6 months of LSL plus several weeks of annual leave), the difference between taking leave during employment vs paying it out can be 6+ months of IMP duration. Clients who can negotiate the timing — taking accumulated leave in the months before termination, with employment continuing through that period — may reduce the IMP impact. The trade-off is that the leave-during-employment approach doesn't change the total leave entitlement; it spreads it across a longer employment period rather than extending the post-employment income-support waiting period.

For clients facing planned redundancy or end of career, the practical advice work has a specific shape. Identify Age Pension age for the client (67 for those born on or after 1 January 1957). Calculate the projected IMP based on the package size and the most recent weekly wage. Compare the IMP to the gap between termination and Age Pension age. Plan cash flow across the IMP period — the redundancy package itself is the principal funding source during this period, with super withdrawals (where eligible) as a supplement. Coordinate with redundancy tax advice — the genuine redundancy concession reduces the tax cost of the package, increasing the after-tax amount available for deployment (see the related article on articles/2026-05-04-genuine-redundancy-payment-tax-concession-late-career). Consider leave management before termination where flexibility exists. Plan the transition through IMP to JobSeeker (where the gap to Age Pension is long) or directly to Age Pension (where the IMP runs to Age Pension age).

A specific consideration for clients with super access at 60 or older is whether super withdrawals are a more effective bridging income than JobSeeker. For clients aged 60+, account-based pension drawings (under retirement conditions of release, if met) are tax-free and don't depend on means tests. JobSeeker is means-tested with substantial taper rates, and the LAWP and IMP layer additional waiting periods. For a 62-year-old made redundant with $1m in super, drawing a pension from super may produce a higher after-tax-and-test net result than waiting for JobSeeker post-IMP. The practitioner's role is to model the alternatives — super bridge versus JobSeeker post-IMP — and recommend the optimal mix.

What do worked planning examples show?

These two cases show how the IMP framework plays out for typical late-career redundancy scenarios. Illustrative only — not personal advice — using FY25-26 figures.

Case 1 — Robert, 64, made redundant with $80,000 in genuine redundancy plus $20,000 in leave payouts ($100,000 total), most recent weekly earnings rate $1,800. On these facts, the IMP calculation is $100,000 / $1,800 = approximately 56 weeks. JobSeeker not payable for 56 weeks from termination — taking eligibility to roughly age 65.5. With Age Pension age at 67, Robert needs to bridge the period from age 65.5 to 67 using JobSeeker (subject to means test and any LAWP that hasn't been concurrently served) plus other resources. The rational pathway is to plan the cash flow across three phases: phase 1 (week 0 to week 56, IMP active) funded from the redundancy package proceeds; phase 2 (week 56 to age 67, post-IMP) on JobSeeker subject to means test, with super drawings (if accessible at 60+) as supplement; phase 3 (age 67 onwards) on Age Pension. The trap to avoid is assuming JobSeeker is immediately available after redundancy — the IMP defers it materially, and the cash flow plan must account for the deferral.

Case 2 — Margaret, 60, made redundant with $50,000 in payments, weekly earnings rate $1,200. IMP = $50,000 / $1,200 = approximately 42 weeks. JobSeeker not payable for 42 weeks. After the IMP, Margaret has six years to Age Pension age 67 — a long bridging period. On these facts, the rational pathway is to consider whether super drawings (Margaret may be eligible for super access at preservation age 60 if she meets a retirement condition of release) provide a better income source than JobSeeker post-IMP. If Margaret has $600,000 in super, drawing a pension at retirement-condition age provides tax-free income across the six-year gap, with the residual super continuing for life. JobSeeker would be subject to the income and asset tests and would deplete other resources. The trap to avoid is reflexively claiming JobSeeker without comparing to the super bridge alternative — for clients with meaningful super, the comparison matters.

For pre-Age-Pension-age employees facing redundancy, the Centrelink Income Maintenance Period is the structural rule that defers JobSeeker eligibility based on the size of the termination payments relative to the previous weekly earnings. The rule reflects sensible policy — the redundancy package is alternative income, not stacking with social security — but it materially affects the cash flow and bridging strategy for clients in the gap between employment and Age Pension. The advice work is to calculate the IMP, integrate it with the broader bridging plan (super, JobSeeker, personal resources, partner income), check the LAWP that runs concurrently, and coordinate with redundancy tax advice. For clients close to Age Pension age, the IMP may cover the entire gap and the JobSeeker question doesn't arise; for clients further from Age Pension age, the IMP-then-JobSeeker pathway is the practical bridge, with super drawings as a tax-effective alternative for those with sufficient super and retirement-condition access.

Sources

• Services Australia — Income maintenance period
• Services Australia — Liquid assets waiting period
• DSS Social Security Guide
• DSS Social Security Guide
• Services Australia — Who can get age pension