Hello everyone, I receive income via an Income Protection Insurance policy which does not have tax taken out, however I budget for the tax each quarter using the PAYG scheme. What I can’t find anywhere on the ATO website is some sort of ruling in relation to Superannuation and the gross Income I receive from the policy. Given any employee must pay the minimum Super Guarantee (think it’s now 9.5%), then why isn’t there any allowance for me to reduce the gross amount I receive each month to provide for some sort of Super. I’ve been unwell for almost 3 years during which time I have contributed little to my super. What I have contributed to my super has been after I’ve paid tax on the total gross income from the policy. Sure, I’ve been permitted to claim the little I’ve placed into Super via the Intent to Claim Form as an after tax contribution, but I would think there must be somewhere in the ATO policy which could provide a ruling on how they treat the income from an income protection policy and Superannuation, neither of which is taken before the funds are provided to me. So I pay tax on the full gross amount whereas under a normal process, the employer ensures I have my superannuation contributions taken, thereafter I pay tax on the gross remaining. I’ve recently managed to return to work part time but the pay rate is very low and now I am about to try and ensure I pay my appropriate tax due but feel it’s not a fair system. Any advice or recommendations would be appreciated, thanks kindly.
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1 replies
Hi @PeterA65,
Sorry to hear you haven't been well. In relation to provisions of super within the income protection policy, it isn't something we'd be able to advise on. Under federal legislation, when you work for an employer and you're on workers compensation and not working, SG is not payable. When you return to work, even on light duties, then the SG is payable.
Some awards and agreements have provisions for individuals if after a period of time they're unable to return to work, a super guarantee amount can be paid to the individual on workers compensation. You can check this out via Fairwork.
In regards to your situation, you can write in to our tailored technical assistance area. They can advise if there's a ruling on this.
All replies
Hi @PeterA65,
Sorry to hear you haven't been well. In relation to provisions of super within the income protection policy, it isn't something we'd be able to advise on. Under federal legislation, when you work for an employer and you're on workers compensation and not working, SG is not payable. When you return to work, even on light duties, then the SG is payable.
Some awards and agreements have provisions for individuals if after a period of time they're unable to return to work, a super guarantee amount can be paid to the individual on workers compensation. You can check this out via Fairwork.
In regards to your situation, you can write in to our tailored technical assistance area. They can advise if there's a ruling on this.
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