Fair redundancy, retirement scheme payments on horizon

17 December 2018
| By Anastasia Santoreneos |
image
image
expand image

Australians nearing retirement will not be taxed on part of the payment they receive should they be made redundant or receive an early retirement scheme payment, under new Coalition Government reforms.

In 2019, the Govt’s reforms would see genuine redundancy and early retirement scheme payments aligned with the Age Pension qualifying age, which, from 1 July 2019, will be 66, rising to 67 by 2023. 

The change would mean that all individuals aged below the Age Pension qualifying age would be able to receive a tax-free component on the payment they receive from their employer in those circumstances.

The new reforms would see a chunk of tax paid be given back to the employee. For example, if a 65 year old with 10 years of service whose job is abolished receives $100,000 in redundancy payments would pay $15,000 tax, but under the new reform, would only pay $5,640.

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 5 days ago