Document ID: chunk:federal_register_of_legislation:C2007A00009:clause:2_1:p8
Version: federal_register_of_legislation:C2007A00009
Segment Type: clause
Provision Reference: sch 2 cl 1 (pt 8/11)
Character Range: 288757–291665

(e)—the remaining part of a genuine redundancy payment or an early retirement scheme payment (apart from the amount mentioned in the paragraph) is an employment termination payment if section 82‑130 applies to that part.

82‑140  Tax free component of an employment termination payment

  The tax free component of an *employment termination payment is so much of the payment as consists of the following:
 (a) the *invalidity segment of the payment;
 (b) the *pre‑July 83 segment of the payment.

82‑145  Taxable component of an employment termination payment

  The taxable component of an *employment termination payment is the amount of the payment less the *tax free component of the payment (see section 82‑140).

82‑150  What is an invalidity segment of an employment termination payment?

 (1) An *employment termination payment includes an invalidity segment if:
 (a) the payment was made to a person because he or she stops being *gainfully employed; and
 (b) the person stopped being gainfully employed because he or she suffered from ill‑health (whether physical or mental); and
 (c) the gainful employment stopped before the person's *last retirement day; and
 (d) 2 legally qualified medical practitioners have certified that, because of the ill‑health, it is unlikely that the person can ever be gainfully employed in capacity for which he or she is reasonably qualified because of education, experience or training.

 (2) Work out the amount of the invalidity segment by applying the following formula:
where:

days to retirement is the number of days from the day on which the person's employment was terminated to the *last retirement day.

employment days is the number of days of employment to which the payment relates.

82‑155  What is a pre‑July 83 segment of an employment termination payment?

 (1) An *employment termination payment includes a pre‑July 83 segment if any of the employment to which the payment relates occurred before 1 July 1983.

 (2) Work out the amount of the pre‑July 83 segment as follows:

           Step 1. Subtract the *invalidity segment (if any) from the *employment termination payment.
           Step 2. Multiply the amount at step 1 by the fraction:

82‑160  What is the ETP cap amount?

  The ETP cap amount for the 2007‑2008 income year is $140,000. This amount is indexed annually.

Note 1: Subdivision 960‑M shows how to index amounts. However, annual indexation does not necessarily increase the ETP cap amount: see section 960‑285.

Note 2: The ETP cap amount may be reduced for the purpose of working out tax offsets for individual employment termination payments.

Division 83—Other payments on termination of employment

Table of Subdivisions

 Guide to Division 83
83‑A Unused annual leave payments
83‑B Unused long service leave payments
83‑C Genuine redundancy payments and early retirement scheme payments
83‑D Foreign termination