To Use or Monetize — What is wiser when it comes to earned leave credits of government employees?

For government employees, deciding between using leave credits or monetizing them can be perplexing.

While monetization offers immediate financial gain, using leave credits for actual rest is generally wiser for long-term well-being and work-life balance. But, is it?

In this post we discuss our point of view which choice is wiser for government employees when it comes to their earned leave credits.

What are Leave Credits?

Government employees accrue vacation and sick leave credits monthly. These can be:

• Used for authorized time off (e.g., vacation, illness, personal matters); or
• Monetized — converted to cash under specific conditions.

Monetization: When and How?

According to the Department of Budget and Management (DBM), monetization is allowed under these conditions:

• At least five days of leave credits remain after monetization;
• For valid reasons such as: health emergencies; financial hardship; or pre-retirement or separation from service.

You May Be Interested

Why Using Leave Maybe is a Wiser Choice

Here’s why using leave credits may be the better choice, aside from the five (5) days mandatory leave being required to be used. Using leave credits:

• Promotes mental and physical health especially when it is purposely used to care oneself (i.e., ‘me-time’)

• Strengthens family and personal relationships like when spending vacation with family, time for friends, or a reunion with college or high school friends;

• Prevents burnout and improves productivity. Giving oneself a time out from office work would help the mind rest and rejuvenate.

• Encourages work-life balance.

When it’s Worth Monetizing Leave Credits

On the other hand, monetizing leave credits may be practical if:

• You’re in dire need of money and there are no other way to source it from:
• You have a growing business and putting more money to it, for example your monetized leave credits, will make it grow even more;
• You’re retiring or resigning soon and your agency has available funds to monetize your leave credits (grab that opportunity!); or
• You face urgent financial needs.

So unless you have a very good reason to monetize your leave credits, just keep them for the future.

Final Thoughts

OPOV: Earn and save leave credits for long term gain. Use leave credits for rest and wellness; monetize only when necessary.

While unlike in the private sector where monetizing leave credits is generally taxable and not for government employees, for us, saving leave credits is the wiser choice.

Use them sparingly and only when required and necessary. They’re designed to support your health, family, and productivity so use them only for this purpose.

ICYDK, monetizing your leave credits shall be based on your highest monthly salary received. Hence, unless you are already on your sunset in government service, don’t monetize yet as you will get lower value of your leave credits as compared when you have higher salary. Take advantage of the yearly salary increase as this will add value to your Terminal Leave Benefits when you retire.

Your turn

So that’s what we think about what’s wiser to do with earned leave credits. Better save it for the future and long term gains.

How about you? Do you agree with our POV or you have a wiser choice. We want to know what you think. Leave us a comment below.