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  • Transitional ETP cap (up to 30 June 2012)

    Transitional arrangements applied if at 9 May 2006, you were entitled to a payment made on the termination of employment under:

    • a written contract
    • an Australian or foreign law (or an instrument under such a law)
    • a workplace agreement under the Workplace Relations Act 1996.

    Employment termination payments made after 30 June 2007 (other than those made under the transitional arrangements) can not be contributed to or rolled over into super.

    The taxable component of a transitional termination payment will be taxed at:

    • no more than 15% up to the lower cap amount
    • no more than 30% on the amount which exceeds the lower cap amount but does not exceed the upper cap amount
    • the top marginal rate for amounts in excess of the upper cap amount.
    Table 15: Lower and upper caps for transitional termination payments

    Income year

    Lower cap amount

    Upper cap amount (not indexed)



    $1 million



    $1 million



    $1 million



    $1 million



    $1 million

    In accordance with section 82-10B of the Income Tax (Transitional Provisions) Act 1997 (ITTPA 1997), the lower cap amount for a transitional termination payment is the same as the ETP cap amount for the year (which is generally available each February). In accordance with section 82-10D of the ITTPA 1997, the upper cap amount in relation to a transitional termination payment received in an income year is $1 million. Both the lower cap amount and the $1 million upper cap amount are reduced by all amounts received by the person that have previously used the transitional termination payments concession.

    Transitional arrangements in relation to termination payments ceased to apply from 1 July 2012.

    Last modified: 27 Feb 2015QC 18123