Martin is fast approaching retirement but is unsure when he can claim an Age Pension if he receives holiday and long service leave payment.
Q. Martin
I am now 70 years old and contemplating retirement in the not-to-distant future. I will be eligible for the Age Pension, but when I retire, I will have long service leave pay and also normal holiday pay owed to me. Is it true that after I retire I cannot receive any pension benefits until all my holiday pay is spent?
A. As you are retiring and not being retrenched, any holiday pay and long service leave payment you are due will not impact when you can claim for the Age Pensions – i.e. you will not have to wait until this is spent before you can claim.
However, if these are paid as a lump sum, what you do with that lump sum may affect the rate of Age Pension you receive once the income and asset test has been applied.
You can find out more about the income and asset test by reading ‘Income and asset tests’.
Before you make any decision, I think it would be worthwhile making an appointment to see an independent financial advisor so you can maximize your income options in retirement.
