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Note: This document forms part of our publication Tax basics for non-profit organisations. To view the full publication, click here. The information in this document has been updated for changes that have occurred since the publication was released in June 2007.
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Prior to 1 July 2007, when people stopped work due to redundancy, invalidity, retirement or death, they were often entitled to an eligible termination payment. Eligible termination payments were subject to concessional tax treatment.
Eligible termination payments ceased to exist from 1 July 2007 and were replaced in part by employment termination payments.
Employment termination payments are specific payments made from 1 July 2007 in consequence of the termination of an employee, generally by employers. Employment termination payments are also subject to concessional tax treatment.
There are differences between eligible termination payments and employment termination payments. For example, generally employment termination payments cannot be rolled into superannuation, there may be different taxation implications for the terminated employee, and in some circumstances, transitional arrangements may apply.
Last Modified: Monday, 15 October 2007
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