Early retirement scheme

An early retirement scheme is a plan that offers employees incentives to retire early or resign when the employer is rationalising or reorganising their business operations.

The scheme must meet certain conditions and be approved by us. Approval will be provided to the employer as a class ruling. The employer cannot start an early retirement scheme until they have our approval.

An early retirement scheme will generally be approved when it meets the following conditions:

It is available to broad groups of employees. This may include all employees

  • hired by the organisation
  • who have reached a particular age
  • with a particular occupational skill.

It is part of a plan to reorganise business operations. The employer must be able to show they are implementing the scheme to achieve a specific short-term objective. A specific objective may include

  • replacing employees with particular skills with employees who have different skills
  • the closure, relocation or reduction in output of part of the business operations
  • the introduction of new technology, processes, systems or productivity increases.

The employer needs to put their request for an early retirement scheme in writing to the ATO. The employer's request will need to:

  • Advise the date of effect (i e the proposed timeline of the scheme), and
  • Include      
    • Employer's name
    • Contact details
    • A full and accurate description of the facts that are relevant to the scheme
    • Clear and accurate description of the class of persons subject to the scheme, and
    • Any supporting documents.

The request can be faxed to 1300 669 846 or mailed to

PO Box 3100
Penrith NSW 2740

    Last modified: 26 Jul 2016QC 26218