Fair redundancy, retirement scheme payments on horizon
Australians nearing retirement will not be taxed on part of the payment they receive should they be made redundant or receive an early retirement scheme payment, under new Coalition Government reforms.
In 2019, the Govt’s reforms would see genuine redundancy and early retirement scheme payments aligned with the Age Pension qualifying age, which, from 1 July 2019, will be 66, rising to 67 by 2023.
The change would mean that all individuals aged below the Age Pension qualifying age would be able to receive a tax-free component on the payment they receive from their employer in those circumstances.
The new reforms would see a chunk of tax paid be given back to the employee. For example, if a 65 year old with 10 years of service whose job is abolished receives $100,000 in redundancy payments would pay $15,000 tax, but under the new reform, would only pay $5,640.
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