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TPD insurance taxes

Newbie

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Replies 1

Hi team,

 

I have got a question regarding the TPD insurance tax payment.

 

My friend she is 54, there are $80,000 in her super and she would like to claim $71,000 TPD benefit inside her super. 

 

She receives Centrelink/DVA - Disability support pension of $900 per fortnight.

 

If she makes the cliam, how many taxes she needs to pay? Is it $71,000*22% =$15,620 tax she needs to pay?

 

Look forward for your reply.

 

Regards.

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Community Moderator

Replies 0

Hi @chloe1225

 

This is a question that has come up a few times in our Community. We suggest that you check out our responses in the following threads:

 

As you can see, it can get complicated. Depending on your friend's circumstances and the super fund they're a member of, there is a good chance they won't have 22% tax applied to the total super lump sum. Their super fund will work out the components and how much to withhold in accordance with our instructions. Both threads contain links to some helpful information on our website.

 

It is important to note that the super fund is required to withhold the maximum applicable tax rates which don't take into account any tax-free threshold your friend may be entitled to. When your friend lodges their tax return, we will calculate an offset to ensure that it is taxed appropriately. If it results in a credit, your friend may get a tax refund.

 

All the best.

1 REPLY 1

Most helpful response

Community Moderator

Replies 0

Hi @chloe1225

 

This is a question that has come up a few times in our Community. We suggest that you check out our responses in the following threads:

 

As you can see, it can get complicated. Depending on your friend's circumstances and the super fund they're a member of, there is a good chance they won't have 22% tax applied to the total super lump sum. Their super fund will work out the components and how much to withhold in accordance with our instructions. Both threads contain links to some helpful information on our website.

 

It is important to note that the super fund is required to withhold the maximum applicable tax rates which don't take into account any tax-free threshold your friend may be entitled to. When your friend lodges their tax return, we will calculate an offset to ensure that it is taxed appropriately. If it results in a credit, your friend may get a tax refund.

 

All the best.