My ex company had me covered for TPD. Non superannuation. The claim was approved.
Is this payout considered taxable income?
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Hi @andrmce,
Just to clarify, is this correct? Your employer's insurer paid you a TPD payment, which was paid into your super fund.
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Hi @andrmce,
Just to clarify, is this correct? Your employer's insurer paid you a TPD payment, which was paid into your super fund.
No. The insurer has paid a lump sum to my ex employer. This is outside of superannuation. The policy is company group salary continuance. I have not received the payout yet. It is TPD outside of superannuation.
Apologies for the delay in responding.
Hi @andrmce
If the employer owns the policy or pays the insurance it could mean its taxable but we need to investigate. I think its best to get tailored advice from us to work this out.
Hi @andrmce, did you get to an answer on this? I haven’t had any response from the ATO but are in the same position where employer had a policy outside of superannuation and the TPD was paid by the employers insurer to the employer and then to me. Would love to know if you got a firm information as my tax adviser believes it should be tax exempt but the employer withheld tax at normal income bracket. Thanks!
@andrmce sorry thought I would try one more time to see if tax ended up being payable on the lump sum
TPD for you?
Hi @Katnpat – looks like you were checking in with @andrmce, so just jumping in quickly in case it helps others following along.
If the TPD payout was from a policy owned by the employer and paid outside of super, it might be taxable (depending on how the policy was set up). We have some general info on compensation and insurance payments. But because these setups can vary, it’s best to speak with a tax adviser or request a private ruling if you need a clear answer for a specific situation.
HI
The employer reported the payout as wages / income and the ATO says its taxable. The ATO is asking for nearly 50% of the payout in tax......and Ive got a terminal illness!
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