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Last updated 30 April 2020

Genuine redundancy

Genuine redundancy has the following characteristics:

  • The employee has been dismissed from a job, not left voluntarily.
  • The employee has been made redundant (the employee's particular work has ceased or tapered off, or the workplace has relocated or closed).
  • The dismissal occurred before the employee had to retire (for example before a set period of service).
  • The dismissal occurred before the employee reach their age pension age

Pension Age

Table 7: Pension age for men and women

Date of Birth

Pension age

Before 1 July 1952


1 July 1952 to 31 December 1953

65 years and 6 months

1 January 1954 to 30 June 1955

66 years

1 July 1955 to 31 December 1956

66 years and 6 months

On or after 1 January 1957

67 years


Invalidity is when physical or mental capacity stops an employee from continuing in their present line of work, forcing them to leave employment early (and in any event, before the age of 65).

Invalidity requires certification from two qualified medical practitioners.

Early retirement schemes

An employer-devised early retirement scheme offers incentive payments encouraging staff to retire early or resign. The employer must submit the scheme's details to us and, if it meets certain criteria, we will approve it as an 'early retirement scheme'. Under the scheme, certain payments become employment termination payments with a tax free component.

Payments for unused annual leave paid as part of an early retirement scheme are not employment termination payments.

Normal gross earnings

Normal gross earnings include all payments, except those relating to termination payments, received in the last full period of employment (this includes taxable allowances, overtime, bonuses). Therefore, an employee's normal gross earnings are those earnings relating to the last full pay period worked.

If an employee's pay fluctuates significantly over a number of pay periods, you can calculate normal gross earnings by using an average of gross taxable earnings for the financial year to date over the number of pays received.