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Terminal Leave Benefit

My mother is celebrating her 60th birthday this month and we’re excitedly scouting for a place to hold her simple thanksgiving dinner. While we were on it, I suddenly remembered to ask if she has claimed her terminal leave benefit  from her previous employer. My mother, you see, resigned 9 years and 8 months ago from government service. She winced and said “Not yet.”  That prompted me to write about this topic.

A Terminal Leave is filed by a government employee who retires, resigns, or separates from the service for whatever cause. By filing this, the employee applies for the commutation of all earned vacation and sick leave credits so that he/she can enjoy its monetary equivalent.In CSC Resolution No. 98-2449 (Ninfa N. Ward; September 23, 1998), the Civil Service Commission clarified that accumulated leave credits are considered as earned salaries of the employee, making the latter entitled to its monetary equivalent as a matter of right. That is also the reason why terminal leave benefits can be released even if the employee claiming it – (1) has a pending administrative or criminal case; or (2) has been convicted of a case which includes the penalty of forfeiture of retirement benefits.

Under existing rules, the terminal leave benefit is based on the highest monthly salary received by the employee at any time during his employment. The formula to be used is:

 TLB = S x D x CF

 Where: TLB    =          Terminal leave benefits

            S          =          Highest monthly salary

            D         =          No. of accumulated vacation and sick leave credits

            CF       =          Constant Factor of .0481927


Employee A earns a monthly salary at the rate of P15,000.00. He was demoted to a position with a monthly rate of P12,000.00. If he resigns while occupying the lower-paying position, his terminal leave benefits will still be computed at the rate of P15,000.00. If he has 95 accumulated leave credits at the time of his resignation, his terminal leave benefit will be P68,674.59, using the following computation:

                           P15,000.00 x 95 x .0481927                 =      P68,674.59

Finally, remember that the request for payment of terminal leave benefits must be made within TEN years from the effective date of retirement, resignation or separation. Otherwise the right prescribes and the employee can no longer claim the benefit.

 I hope that those who, like my mother, do not know about this benefit find this post helpful.

Source: Sections 35 to 40, CSC Memorandum Circular No. 41, s. 1998

Note (Jan 15, 2016): The constant factor has been changed from .0478087 to .0481927 by CSC Resolution No. 1501530 dated December 21, 2015 and circularized through MC No. 2, s. 2016The resolution was published on January 7, 2016 and will be effective on January 22, 2016.

8 thoughts on “Terminal Leave Benefit

  1. what is the maximum days of terminal leave credits (sick & vacation) allowed to be paid under the law? in case of retirement?

  2. so unlike in the private sector which monetizes the leaves yearly, government employees can only get the monetary equivalent when they retire? thank you.

    1. Oh no, govt employees also have the option to monetize but there are separate rules on that. Depends also on the agency’s budget and if the head approves.I’ll write about that soon. 🙂

  3. Ma’am ask ko lang po for Vice Mayor po which 3 terms in service bale 9 years. Same parin po ba and computation?

  4. Sir can i ask if terminal leave pay and terminal pay are d same…and what did i do enable for my grandmother to apply for d said terminal leave pay

  5. I was previously employed thea government agency and have just retired effective March 16, 2017. Durint he time of my employment, i was of those who get promoted while our office is undergoing rationalization. And because our promotion was invalidated by the CSC as the process violated CSC MC No. 3, S-2014. Our office has filed an appeal with the CSC
    Field office, Quezon City but was denied until reached the CSC Commission. And while it has no finality of its previous decision as to the invalidation of our appointment, i was reappointed and placed to the position of a Municipal Agrarian Reform Program Officer(MARPO) as per new Approved Staffing Pattern(ASP) which is equivalent to my previous position as Municipal Agrarian Reform Officer(MARO) with a lower salary considering that it has a Salary range of G-20 compared to the salary of my invalidated appointment as Chief Administrative Officer(CAO) which has a salary range of G-24. Upon retirement, and since that i have had leave credits, i applied for its commutation. However, our office, particularly the Central Office is in a delima as to what will be their basis of computing my terminal leave benefits… Whether highest salary i received when i was promoted as CAO or my salary as MARPO because they insist that althought i was promoted, my appointment was invalidated. But under the CSC rules particularly CSC MC 25, S-2014 it is clear that we are entitled to receive the salary of the position being a “de facto” officer. But looking back at the guidelines on terminal leave benefits, it did not qualify the status of the appointment of an employee that it must not had been invalidated. That if ever invalidated, it cannot be a basis in computing terminal leave benefits otherwise legal issues will arise as to what kind of renumeration or payment we have had received if it cannot be considered a salary. Much more that it cannot definitely be called an allowance, stipend or anything else but still a salary. This is the issue we facing now but am still hoping that they would be able to decide in my favor.

  6. Is a private cooperative authorized to have an automatic deduction from the terminal leave benefits of a retiree? Is it legal for a government agency to allow private cooperative be part of their agency clearance or authorizing such private cooperative to allow the automatic deduction of their collectibles from the terminal leave benefits of a retiree?

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