Genuine redundancy
Genuine redundancy - Protect: Severance and Income Protection benefits
| Protect has worked hard to maximise the severance benefits payable to members whose jobs are made redundant. A Protect Genuine Redundancy Account can increase your severance payment by nearly a third via tax-free redundancy payments. | ||
| But only if you choose this account option and your position is later made redundant by your employer because your job is no longer required. You must choose this account option PRIOR to your position being made redundant and, once chosen, you cannot change your account type at a later date. If your severance entitlement is administered as a Protect Genuine Redundancy account, you (or your beneficiaries) will be eligible to claim a payment from your account if: | ||
| ||
| Initial severance claim | ||
| If your position is made redundant, you can make an initial tax-free claim of up to $5,000 from your Protect Genuine Redundancy Account. To make an initial claim, you will need to complete a Protect Genuine Redundancy Account claim form. You also need to ensure your most recent Protect employer completes the employer declaration section of the form, confirming that your position has been made redundant and you are no longer employed by that employer. Alternatively, your employer can complete a separate Employer Advice form notifying Protect that your position has been made redundant. If you are unable to obtain a declaration confirming your redundancy,call us for assistance. | ||
| ||
| Subsequent severance claim | ||
| If your position is made redundant and you remain out of work for four consecutive weeks from the date you left, you can then claim any money remaining in your Genuine Redundancy Account in one or more payments. To make a subsequent claim from your Genuine Redundancy Account, you must complete a statutory declaration. The statutory declaration must be completed in a specific format to enable Protect to process your subsequent severance claim. To facilitate prompt processing, please use a Protect statutory declaration and complete all sections of the declaration. | ||
| Genuine Redundancy Tax-free Limits | ||
| Protect's Genuine Redundancy Account provides significant tax concessions if you are dismissed because your job is no longer required by your employer: | ||
| ||
| ||
| *Tax-free limits for 2011/12; the amounts are indexed at the start of every financial year. These tax-free limits do not apply if your position is made redundant and you are more than 65 years old, you retire or you die. | ||
| Current taxation rates* | ||
| If your position is made redundant and you are less than 55 years old, severance payments in excess of the above tax-free limits from a Protect Genuine Redundancy account are currently taxed at a rate of 30% plus the 1.5% Medicare levy. If your position is made redundant and you are aged between 55 to 65 years of age, severance payments in excess of the tax-free limits are currently taxed at a rate of 15% plus the 1.5% Medicare levy. If you are more than 65 years old, the tax-free limits do not apply and the applicable taxation rate is 15% plus the 1.5% Medicare levy. If you retire and you are at least 55 years of age, any payment from your Genuine Redundancy account is taxed at a rate of 15% plus the 1.5% Medicare levy. The tax-free limits do not apply. If you die, payments from your Protect severance account are generally not taxed if the beneficiaries are your financial dependants or your Estate. If your beneficiaries are not your financial dependants, the payment from your account will generally be taxed at a rate of 30% plus the 1.5% Medicare levy. | ||
| *Severance payments above $165,000 (taxation limit for 2011/12) are taxed at a rate of 45% plus the 1.5% Medicare levy. Note: Taxation rates are correct at the time of publication; these rates may change in the future. The severance payment limit ($165,000 for 2011/12) is indexed annually in line with AWOTE and rounded down to the nearest multiple of $5,000. |
