Terminally ill given tax break
Peter Dutton
The terminally ill will be able to access their superannuation under the age of 60 without being taxed on their lump sum benefit.
The Minister for Revenue and Assistant Treasurer, Peter Dutton, announced the changes and said the Government decided to change this area of tax legislation to “remove as many of the stresses as possible for people in this terrible situation”.
The Government has asked the Commissioner of Taxation to consider changing the rate at which super funds are required to withhold payments, until the legislation passes into law.
Currently, individuals under the age of 55 who access their lump sum super benefit are subject to a maximum tax rate of 20 per cent, plus the Medicare levy. This tax is generally withheld by the superannuation fund when it makes the lump sum payment.
While the actual tax payable may be lower as it depends on the individual’s marginal tax rates, any refund they may be entitled to would not be determined until the end of the financial year.
Amendments to the legislation will have effect for payments received after today.
AUTHOR
George Liondis
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
