• Employer or super fund invalidity and disability payments

    Invalidity payments

    An invalidity payment is part of an employment termination payment (ETP) you receive from your employer as a result of sustaining a permanent disability.

    You will receive an invalidity payment if your employment ceased as a result of ill health and two medical practitioners have certified that it is unlikely you can ever be gainfully employed in an area for which you are reasonably qualified.

    Your ETP is made up of a taxable component and a tax-free component.

    Disability benefit payments

    A disability benefit is a payment you receive if you suffer from physical or mental ill health and two medical practitioners certify that it is unlikely you can ever be gainfully employed in an area for which you are reasonably qualified.

    You can receive a disability benefit from your super fund or from your employer as either a lump sum or an income stream. There are tax implications to consider as the amounts are taxed in different ways depending on how the benefit is paid.

    See also:

    Last modified: 07 Oct 2016QC 33265