Used when someone has nothing urgent to do or no responsibilities at a given time. With the kids at camp, I suddenly have time on my hands.
Pro Tip 2/3
Potential boredom
Can imply that the person might be bored because they don't have enough to do. I've finished all my projects and have time on my hands now, it's quite boring.
Pro Tip 3/3
Subtle sarcasm
Sometimes used sarcastically, suggesting that someone is wasting time or lacks important things to do. He's counting the tiles in the kitchen? Looks like someone has too much time on their hands.