Quite often in payroll we are asked to fill out an Employment Separation Certificate for an employee to give to Centrelink. Centrelink uses the Separation Certificate to determine when a person is entitled to receive benefits such as Newstart.
Claimants are expected to use leave and redundancy payments to support themselves before being paid the full rate of Newstart Allowance (NSA).
Here are some interesting facts about how the Separation Certificate is to be treated.
My employee has not been terminated. Should I complete the ESC?
Sometimes you may be asked to complete an ESC in circumstances other than termination of employment, for example, a decrease in working hours or a change from full time to casual work.
In these situations, you can amend the form to reflect the circumstances. For instance, you may wish to change the question “reason for separation”, to “employment has changed because”. You can use the “Reason” box to provide additional information clarifying the change of circumstances.
Ceasing work voluntarily or being dismissed due to misconduct?
Employees who cease work voluntarily or are dismissed due to misconduct and wish to receive a payment from Centrelink may be required to serve an Unemployment Non-Payment Period.
What if the reason for termination does not fit the options on the form?
Mark the box “Other” and use the “Reason” box to provide additional information to clarify the change in circumstances.
What time frame relates to “workers compensation claims” at question 3?
This question relates to the total period of employment, even if this is an historic claim that has been closed.
What should be included in the “final gross payment”?
This is the amount before tax the employee gets when the employer pays them for the last time.
What should be included in the “redundancy payment”?
For our purposes a “redundancy payment” includes that part of a payment that is not for wages or leave entitlements. The amount stated should be the gross (or before tax) amount.
What should be included in “other” under “types of leave entitlements” at question 7?
Examples of “other” leave include rostered days off (RDOs) and time off in lieu (TOIL).
What is the employees “average gross weekly wage”?
This will be the amount you normally pay the employee on a weekly basis. If you pay your employees fortnightly or weekly, you will have to bring it back to a weekly amount.
What is meant by “cashed in leave entitlements”?
Cashing in leave entitlements is a practice allowed only when included in the conditions of an award or enterprise agreement. It occurs when an employee gets paid for a period of leave accrued without actually taking the time for the leave.
Who can sign the ESC?
The employer or a pay officer who has the employer’s authorization to provide and verify the information provided.
What if I don’t have a business stamp?
You may use any stamp that provides your business name and address. If you don’t have a stamp, your phone number and signature will be sufficient. Employers should not use their common seal.
Here is a link to the online form: Separation Certificate
For more information:
Contact the Centrelink Business Line on 13 11 58