Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-40 - RULES AFFECTING EMPLOYEES AND OTHER TAXPAYERS RECEIVING PAYG WITHHOLDING PAYMENTS  

Division 83 - Other payments on termination of employment  

Subdivision 83-C - Genuine redundancy payments and early retirement scheme payments  

Operative provisions

SECTION 83-170   Tax-free treatment of genuine redundancy payments and early retirement scheme payments  

83-170(1)    
This section applies if you receive a *genuine redundancy payment or an *early retirement scheme payment.

Note:

A payment cannot be both a genuine redundancy payment and an early retirement scheme payment, because of the nature of each of these types of payment: see sections 83-175 and 83-180 .

83-170(2)    
So much of the relevant payment as does not exceed the amount worked out under subsection (3) is not assessable income and is not *exempt income.

83-170(3)    
Work out the amount using the formula:

Base amount + (Service amount × Years of service)

where:

base amount
means:

(a) for the income year 2006-2007 - $6,783; and

(b) for a later income year - the amount mentioned in paragraph (a) indexed annually.

Note:

Subdivision 960-M shows you how to index the base amount.

service amount
means:

(a) for the income year 2006-2007 - $3,392; and

(b) for a later income year - the amount mentioned in paragraph (a) indexed annually.

Note:

Subdivision 960-M shows you how to index the service amount.

years of service
means the number of whole years in the period, or sum of periods, of employment to which the payment relates.

Note:

The remaining part of a genuine redundancy payment or an early retirement scheme payment (apart from the amount mentioned in subsection (3) ) is an employment termination payment if section 82-130 applies to that part.