Terminally ill to receive tax-free super
Nick Sherry
Terminally-ill Australians will soon be able to receive superannuation lump sum payments tax-free, the Minister for Superannuation and Corporate Law, Nick Sherry, has announced.
Sherry said that amendments to the relevant taxation law, contained in the Tax Laws Amendment (2008 Measures No 1) Bill 2008, were introduced to parliament yesterday.
“The Government is relieving some of the financial stress which terminally-ill persons and their families may be experiencing as a result of difficult circumstances.”
Sherry said the changes, first outlined in Money Management last year, extend the previous Government’s proposed policy so that the terminally ill will not be taxed on lump sum payments made on or after July 1, 2007, rather than September 12, 2007.
Superannuation lump sum payments for those aged 55 and under are currently taxed at a minimum rate of 21.5 per cent (including the Medicare levy), while higher rates apply to payments from untaxed funds. The new tax-free treatment will apply to lump sum payments from both taxed and untaxed funds.
Sherry said the Government is also set to introduce a new condition of release affording the terminally ill unrestricted access to superannuation benefits.
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