Declined or Missed Out on a Voluntary Redundancy? Retention Periods and Involuntary Redundancy in the APS

We’re Maciej Stanek and Imran Amjad, the financial advisers at Véurr Financial Planning. Most coverage of the current APS voluntary redundancy rounds is written for the people who get a package. This guide is for everyone else: the members who put their hand up and missed out, and those weighing up whether to decline. The short version: missing out on an EOI changes nothing formally, but declining a formal offer starts a clock — and the further that clock runs, the smaller the eventual package generally gets.

I applied for a voluntary redundancy and didn’t get an offer — what happens now?

Formally, nothing changes. An expression of interest is not an offer, and missing out does not make you an “excess employee” — no retention period starts and your employment continues on the same terms. The process with real deadlines only begins if your agency later identifies you as excess by written determination.

The scale of this group is bigger than most coverage suggests. By June 2026, around 2,000 Home Affairs staff had applied for a voluntary redundancy since the department’s round opened in April — while Secretary Stephanie Foster indicated exits would be in the hundreds, fewer than a thousand, with no fixed target and no published count of approvals at the time of writing (The Canberra Times, 1 June 2026). On those numbers, at that one department, more than a thousand applicants will not get an offer. Our agency-by-agency VR tracker shows the same pattern across the service: applications and expressions of interest run far ahead of finalised departures.

Does missing out mean an involuntary redundancy is coming? Not by itself. There is no announced APS-wide redundancy program, timetable or quota — the rounds are rolling and agency-initiated. The budget pressure behind them is real, though: the Parliamentary Budget Office’s July 2026 medium-term outlook projects APS staffing falling by around 28,000 roles by 2029-30 (from a forecast peak of 217,256 to about 189,000) if the budget is to return to balance — a projection, not announced policy (PBO, 2026-27 Medium-Term Budget Outlook). Agencies that did not shed enough roles voluntarily can later move to the formal excess-employee process below — which is why it is worth understanding now, before any letter arrives.

What is the APS retention period — and how long does it last?

Under typical APS enterprise agreements, an excess employee who declines a voluntary redundancy offer enters a retention period of 7 months — or 13 months if they are 45 or older or have 20 or more years of service — reduced by the weeks of NES redundancy pay that would apply at the end of the period. Those figures come from the ATO Enterprise Agreement 2024 (clause 86), which we use throughout this guide as a representative example — your own agency’s agreement sets your exact entitlements, so check it.

How you get there matters, because the trigger is precise. Under the ATO’s agreement:

• You must first be formally identified as excess — a written determination, made after a consultation period with affected staff. Lodging an EOI does not do this.
• The formal offer then comes with a short fuse: up to two weeks to accept or decline. Before it is made, the agency must give you estimates of your severance, pay in lieu and leave payouts, the tax it expects to deduct, and — for CSS and PSS members — your scheme options.
• Silence counts as declining. If you do not respond within the window, you are taken to have declined — and the agreement says no further voluntary redundancy offer will be made at later steps in that process.
• The retention period starts the day after you decline.

Redeployment or involuntary redundancy: what happens during retention?

Retention is not a paid waiting room — it is a structured redeployment window. In the first three months, the focus is on placing you in a suitable job, and agencies can use swaps — a colleague who wants a package takes the redundancy while you take their role — to keep exits voluntary. If you have not been placed after three months, the ATO agreement sets out three paths:

• You are retained for the rest of the period — the agreement says this will normally be the case, though you may be moved to a different type of work you are suited to.
• Your classification is reduced so you can be redeployed, on four weeks’ written notice — with salary maintenance at your previous base salary for a defined period rather than an immediate pay cut.
• If there is insufficient productive work and no reasonable redeployment prospects in the APS, you can be given written notice of involuntary termination at any point in the remaining retention period.

Through all of it you remain employed and paid, the agency must help you look for roles in other agencies, and you are entitled to reasonable time off for job interviews.

Can I actually be forced out — and what does an involuntary redundancy pay?

Yes — at the end of that process. Under section 29 of the Public Service Act 1999, an agency head can terminate an ongoing APS employee’s employment by written notice, and being “excess to the requirements of the Agency” is the first of the listed lawful grounds. Notice is typically four weeks, or five if you are 45 or older with at least five years’ service.

The money is where declining has its real cost. Compare the two packages under the ATO’s agreement:

• Voluntary redundancy benefit: two weeks’ salary per completed year of service — minimum four weeks, maximum 48 weeks — on top of notice and leave payouts.
• Involuntary redundancy benefit: a lump sum of 13 months’ salary (or seven months’ for those on the shorter retention period) reduced by every dollar of salary paid since the day you declined the voluntary offer. The longer redeployment is attempted, the smaller the final cheque — though a safety net tops it up so you receive no less than the voluntary package would have paid, less the salary you received in the meantime.

Declining, in other words, is a trade: months of continued salary and a chance at redeployment, in exchange for a shrinking exit sum if redeployment fails. The arithmetic depends on your age, service, scheme and re-employment prospects.

Two consolations if you do exit involuntarily. First, the tax rules do not punish you for not volunteering: a genuine redundancy for tax purposes requires that the job is abolished and you are dismissed while under Age Pension age (currently 67) — tests an involuntary redundancy readily meets (ATO). For 2026-27 the tax-free amount is $13,598 plus $6,801 per completed year of service, with amounts above it taxed concessionally up to the $270,000 ETP cap (ATO thresholds) — our APS redundancy guide works through the full tax treatment. Second, plan cash flow around Centrelink either way: a payout can trigger an income maintenance period roughly matching the weeks of redundancy pay, with a liquid assets waiting period of one to 13 weeks served concurrently (Services Australia; DSS Guide 4.3.4.10).

If you have been declared excess and the two-week clock is running — or you can see it coming — that is the moment to get your numbers modelled. Request a call back from Véurr here.

Should I reapply in a later round?

There is no general answer, but the considerations are consistent. Rounds are rolling and agency-initiated — our tracker shows which agencies have rounds open or recently closed — and missing out once does not exclude you from a future round. Worth weighing before the next EOI window:

• The formula rewards waiting — up to a point. Severance typically accrues at two weeks per completed year (capped at 48 weeks), and the tax-free amount grows by $6,801 per completed year. Another year of service can add meaningfully to both.
• Age thresholds change the decision, not just the amount. Crossing 45 lengthens your retention protections; at 60, super access opens; at Age Pension age (67), the genuine-redundancy tax concessions disappear entirely — a late-career package is worth professional modelling before you apply, not after.
• Ask about swaps. If you want a package and a colleague in a comparable role wants to stay, agencies can facilitate a swap that gets you the voluntary exit even when your own role was not the one abolished.
• An EOI is not a commitment — the binding decision only comes with a formal offer and its two-week window — but it does signal your intentions to your agency. Weigh that in your own workplace context.

In CSS or PSS? The redundancy decision is bigger than the payout

For most PSSap and accumulation-fund members, redundancy is mainly a tax-and-cash-flow question. For the long-serving minority still in the closed defined benefit schemes, it puts once-only scheme elections on the table:

• PSS members can convert their entire benefit to a CPI-indexed pension at any age if they take a redundancy — no need to wait for the scheme’s minimum retirement age — and CSC requires the application within 90 days of ceasing work (CSC). Preserving instead, or taking part as a lump sum, changes what is available later — and these elections are generally irreversible.
• CSS members over 55 should read our guide to how a redundancy interacts with the 54-11 strategy before responding to anything — the sequencing can matter more than the package itself.

Your agency must give CSS and PSS members scheme information before a formal offer, and CSC will give you a benefit estimate — get both before deciding anything. Our guide to financial planning for public servants explains the schemes in detail.

When to get advice — and who pays for it

Four conversations, in order: your HR area for your entitlements and dates in writing; your payroll office or accountant for the actual tax calculation — Véurr are not tax agents, and our work sits on the other side of that calculation; CSC for a benefit estimate if you are in a Commonwealth scheme; and a licensed financial adviser to model accepting, declining and retention before your window closes. Many agency enterprise agreements reimburse financial-advice costs for excess employees — the ATO’s agreement, for example, reimburses up to $2,849 for transition and financial planning by a qualified adviser (ATO EA, Schedule 4) — check what yours covers.

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