Total and permanent disability going forward

On 26 May 2011 legislation was introduced into parliament to allow an income tax deduction for the costs of certain insurance premiums for total and permanent disability (TPD) to the extent of the percentages prescribed in the regulations.

The regulations will prescribe the percentages of insurance costs that can be claimed as allowable deductions for certain TPD insurance policies.

The measure will apply from the 2011-12 income year.

The cost of TPD insurance provided through superannuation is deductible to the extent the policies provide cover which is consistent with the definition of 'disability superannuation benefit' in the Income Tax Assessment Act 1997. Where broader insurance cover is provided, super funds are required to obtain an actuary's certificate to determine the deductible part of the premium (unless the deductible part is specified in the insurance policy). The changes will provide an alternative to the need to engage an actuary to determine the deductible portion of certain TPD insurance premiums.

More information

For more information refer to the new legislation Tax Laws Amendment (2011 Measures No. 4) Act 2011 [Act No. 43 of 2011] and the Explanatory Memorandum.