Announcements
We’re doing scheduled maintenance on ATO Community to bring you a bigger, better and brighter online community.
You may see us go into read-only mode over the weekend while we do this. Don’t worry! You’ll still be able to search the site to find your answers.

ATO Community

Tax Free Reducdancy over 65

Newbie

Views 897

Replies 2

Employee born August 53 and so is over 65 years 6 months. My understanding is he should not have tax free.

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Former Community Support

Replies 1

Hi @GWB1,

 

Thanks for posting!

 

For a redundancy to be eligible for tax-free limit, the redundancy must be a genuine redundancy.

 

If the employee was their pension age or older on the day of dismissal, then the redundancy is considered a non-genuine redundancy and treated as an employment termination payment (ETP).

 

If an employee was born in August 1953, their pension age is 65 years and 6 months. If they were over this age at the date of dismissal, then their redundancy is treated as an ETP and subject to the ETP tax rates.

 

Let us know if you have any further questions.

 

Thanks, NicM.

2 REPLIES 2

Most helpful response

Former Community Support

Replies 1

Hi @GWB1,

 

Thanks for posting!

 

For a redundancy to be eligible for tax-free limit, the redundancy must be a genuine redundancy.

 

If the employee was their pension age or older on the day of dismissal, then the redundancy is considered a non-genuine redundancy and treated as an employment termination payment (ETP).

 

If an employee was born in August 1953, their pension age is 65 years and 6 months. If they were over this age at the date of dismissal, then their redundancy is treated as an ETP and subject to the ETP tax rates.

 

Let us know if you have any further questions.

 

Thanks, NicM.

Newbie

Replies 0

Thnaks NicM....appreciate the response