In the 2018-19 MYEFO, the Government announced that it would extend the concessional tax treatment of genuine redundancy and early retirement scheme payments, from 1 July 2019, to those under Age Pension qualifying age.
The Government has released exposure draft legislation and explanatory material for amendments to give effect to this MYEFO announcement.
From 1 July 2019, the proposed legislation will align the age below which a person can receive a genuine redundancy or early retirement scheme payment. This will address the circumstance where some older Australians who, due to their age, cannot access either the Age Pension or the tax-free component of genuine redundancy or early retirement scheme payments.
The proposed legislation does not make any other changes to the taxation of genuine redundancy payment or other types of employment termination payments.
Public consultation on the exposure draft legislation and explanatory material will close on Thursday, 1 August 2019.