Clive Palmer says his nephew Clive Mensink is still being paid more than $4,000 per week by his companies, while the subject of two arrest warrants.
The Federal Court issued the arrest warrants for Mr Mensink, a former Queensland Nickel director, in March, after he failed to show up to answer questions about the collapse of Queensland Nickel.
Mr Palmer is giving evidence before the Queensland Supreme Court as part of a two-day hearing where taxpayer-funded liquidators are trying to freeze his assets amid a $500 million court case to claw back debts to Queensland Nickel creditors and sacked workers.
He told the court in May he was not aware of any payments to Mr Mensink, but on Friday testified he was "heavily sedated at the time".
During the appearance in May, Mr Palmer hobbled into court clutching a sick bag, a breathing apparatus and pillow, claiming he was taking medication that caused memory loss.
Today, Mr Palmer admitted Mr Mensink is entitled to a wage of more than $200,000.
"That would be a precise figure that he's entitled to," he said.
"He'd be paid for three years [after his contract ended], he was entitled to receive his salary.
"I recall being aware of it, I was aware he was being paid his salary and would continue to be paid."
When asked if he was responsible for the change of payment from Queensland Nickel Sales to Mineralogy, Mr Palmer said it did not matter what company the money came from.
"It all comes from me," he said.
"I'm the only source of cash."
Queensland Nickel collapsed last January with $300 million in debt, and more than 800 people lost their jobs.
Outside court Mr Palmer said he did not think it was unfair Mr Mensink was still paid while Queensland Nickel workers were sacked.
"No, I think they're two separate things, these issues will be dealt with in the court," he said.
"The reality of it is, Mr Mensink is entitled to his normal payments as any other worker would be and that's paid and that's guaranteed by Mineralogy, and it's guaranteed by Queensland Nickel Sales."
"We've got no legal ability to stop payments to anybody."
Mr Palmer told the court in May, Mr Mensink was on an extended overseas holiday and he last spoke to Mr Mensink while he was in the Caribbean on a cruise last year.
The court also heard Mr Palmer's father-in-law "coincidently" bumped into Mr Mensink twice overseas, once on a Caribbean cruise and once in the Bulgarian capital Sofia in February.
Palmer 'not sure' if Mensink still works for his companies
Barrister Shane Doyle QC, acting for the liquidators, then asked if he was aware of the change.
"I personally wasn't," Mr Palmer responded.
"But I agreed he should be paid, and continue to be paid three years after his termination."
Mr Doyle also asked Mr Palmer whether Mr Mensink still worked for some of his companies.
Mr Palmer responded he was not sure but he thought Mr Mensink ceased being a director of the companies in December 2016.
Mr Palmer said he did not think Mr Mensink had a fugitive status.
"You can't take from people their property and their entitlement unless you do it under a court order," he said.