Severance & redundancy
Frequently asked questions
When you separate from your employer
If you lose your job or stop work for any reason, you can make a claim from your Protect account. These reasons may include:
- Termination
- Resignation
- Redundancy*
- Promotion to an above award position, or 'off the tools'
- Retirement
- Death
If your employment ceases, an initial claim can be made from your online Protect account via the yellow worker log in button on each page of our website, or from the Protect phone App, at any time of day.
For all other claims, please call us to discuss your circumstances so that we can assist you with any necessary paperwork.
* Only a payment for a genuine redundancy is eligible for the tax-free limit, all other termination event payments are taxed according to ATO rules.
The reason for leaving employment otherwise known as the 'termination event', dictates the tax applied.
*The tax free threshold for the 2020/2021 financial year is $10,989 for the initial year, and $5,496 for each full year of service with your employer.
Use the App
An initial severance claim can be made via:
- The Protect App or
- Your online Protect account
Claims made via these online options can be made at any time of day and are the quickest and simplest avenues for accessing your entitlements.
Exception:
- If you're retiring please download and complete this claim form.
For all subsequent claims, please call us so that we can help you with any necessary paperwork.
Need help?
Our Member Services Team can help step you through the process phone 1300 344 249 or email info@protect.net.au
The application form is online
To help counter the financial hardship caused by the COVID-19 Coronavirus, Protect has been granted approval by the Tax Office to make a hardship payment to workers from their account balance in the event that you are stood down without pay and are not relying on other forms of payment (annual leave or long service leave), and you remain employed. Where a worker is terminated and is unemployed, a termination or redundancy payment would apply.
The Protect update is online
Information relating to Protect severance and coronavirus COVID-19 can be found at this news link:
You will need to complete a claim form
- Your employer confirms your redundancy
Your employer is required to confirm your redundancy details via their online Protect account however, you may proceed with your claim as soon as you have separated from your employment. - You complete a claim form
To lodge a redundancy claim, you must complete a Protect claim form. For fastest results you should do that electronically via the App or by logging in to your online account, accessible via the workers portal (yellow button) on the top right of every page of this website. - If details are missing, we follow up with your employer
If your employer hasn’t provided us with a termination date you can upload a separation certificate as confirmation of termination or Protect will contact your employer to confirm your termination. - You are paid into your nominated bank account
When your redundancy status is confirmed by the employer, you will be entitled to your funds tax free, up to your tax free threshold. Please allow 1-3 business days for the funds to appear in your nominated bank account.
It depends on your termination event
GENUINE REDUNDANCY
If you lodge a claim due to genuine redundancy, your initial claim limit is up to your tax free threshold or the balance of your account, whichever is the lesser. For the 2020/21 financial year, the tax free threshold is $10,989 plus $5,496 for each complete year of service.
IF YOU ARE RETIRING OR LEAVING THE COUNTRY
You may claim the full balance of your account on retirement or if you are leaving Australia for more than two years.
DUE TO ANY REASON OTHER THAN REDUNDANCY, RETIREMENT or leaving australia
Where an initial claim is processed for any reason other than redundancy, for example termination or resignation, the initial claim limit is capped at $6,500 or your account balance, whichever is the lesser.
What is a subsequent claim?
After making an initial claim if you have sufficient funds, you may claim further on your account when you meet certain conditions, for example if you remain unemployed or you find employment with a non-contributing employer. If you qualify for a subsequent claim please call us to have paperwork tailored for you.
Download:
Tax free redundancy payments are now aligned with the age pension qualifying age
As of 1 July 2019, you are eligible to receive tax free redundancy claims up to your age pension age.
Claims on a Protect account due to genuine redundancy attracts a tax free component, based on the person’s length of service with their employer. Previously you could only benefit from this if you were under the age of 65. However, legislation has extended the age limit to match an individual’s age pension qualifying age, which means those working longer in life are no longer exempt from the tax benefits of being made redundant.
However , if you are pension age or older on the day of your dismissal, the ATO will consider the event a 'non-genuine redundancy' and you will not qualify for a tax free component.
No - you can make a retrospective claim
With Protect you don’t have to be unemployed to make a claim on your Protect severance account. If you’re in new employment you can make a retrospective claim from a previous employer.
Within 5 days
Payment will be made to your account within five business days of receiving your initial severance claim, provided your claim is accepted.
The Member Services Team
Our Australian based Member Services Team is available to answer all queries relating to your Protect account. Calling 1300 344 249 will also grant you access to our Field Officers who are able to visit you in person should you require that level of assistance.
Email: info@protect.net.au
Tax is determined by your termination event
*The tax free threshold for the 2020/2021 financial year is $10,989 for the initial year, and $5,496 for each full year of service with your employer.
Claims above the tax free threshold are taxed at 32% if below the preservation age and 17% if above.
Other payments and Government Benefits
Your Protect severance payment may affect other Commonwealth Government benefits, such as the family tax benefit, childcare benefit and private health insurance rebate. You should consult your financial advisor, the Australian Tax Office or Centrelink for advice on how your personal circumstances may be affected.
Additional tax information
Late termination payments
We are legally required to withhold 47% tax from all severance claims made beyond 12 months of your retirement/termination date.
This law does not apply to redundancy claims.
Eligible Termination Payment Cap
Concessional tax rates of 32% (or 17% if you have reached your preservation age) only apply to the first $215,000 of all Eligible Termination Payments (ETP). Beyond this cap we are required to withhold 47% tax.
Deceased Claim Tax Rates
If you die, payments from your Protect severance account are generally not taxed if the beneficiaries are your financial dependents or your estate.
If your beneficiaries are not your financial dependents, 32% tax will generally apply to the payment from your account.
Whole-of-Income Cap
Any payment received not resulting from redundancy may also be subject to higher taxation via your personal tax return, if your taxable income plus this payment exceeds $180,000.
Please consult your financial advisor if you believe this may apply to you.
The tax free limit on redundancy payments
A genuine redundancy payment is tax-free up to a certain limit, based on the number of whole years of service you've completed with your employer.
For the 2020/21 financial year, the limit is:
$10,989 plus $5,496 for each complete year of service
Example of savings:
- Jim has a balance of $7,000 in his Protect account
- He is under 65 years old
- He has been with his current contributing employer for two and a half years
When Jim is made redundant he lodges a claim with Protect. Jim is entitled to a tax-free redundancy payment of up to $21,981. Calculated as: ($10,989 + [2 x $5,496])
Therefore the entire balance of Jim’s account will be paid out to him tax-free.
No
All retirement claims are subject to tax as determined by the Australian Taxation Office. The only 'termination event' (reason for employment ending), that attracts a tax free component is genuine redundancy and the ATO does not permit genuine redundancy claims by those who have reached their pension age or older on the day of dismissal.
It depends on your date of birth
Your preservation age is generally the age that you can retire and access your superannuation or other retirement-related benefits. Your preservation age depends on your date of birth and affects the rate of tax you will pay on a severance claim.
Protect members who have retired and are over their preservation age may claim their entire severance balance.
It depends on your date of birth
To be eligible for the age pension you must be 65 years or older. The qualifying age will gradually increase by 6 months every two years, to 67 years by 1 July 2023. The pension age is relevant to some Protect members as ATO rules only allow you to claim genuine redundancy up to your pension age.
No, there is now just one Protect account
Protect has one severance account that combines the best features of our old genuine redundancy (GRA) and termination (TER) accounts. The new account allows you to claim at any time that you leave employment AND it offers the best tax rates applicable to your termination event.
Members are not required to do anything to take advantage of this change. If you previously had a TER or GRA account you now have the new account in place and your membership number remains the same.
Why did Protect roll the two account types in to one account?
Protect were proudly the first severance scheme to offer members a choice of account types so workers could either claim in a wide range of circumstances OR choose a redundancy only account that allowed for a tax free component. In December 2019 however, we obtained Australian Tax Office approval to combine the benefits of both accounts in to one account allowing us to pay severance claims to workers based on the event which caused their employment to terminate.
More options
You will still be able to access tax free initial claims on a genuine redundancy. In addition, you will be able to lodge a claim should you resign, or your employment is terminated for any reason other than redundancy. Under the old account, you were unable to access your severance if your employment terminated for any reason other than redundancy or retirement now you can!
Members are not required to do anything to take advantage of the change to one account type. Your Protect member number remains the same.
Potential for tax savings
Previously all claims payable on a TER account, were subject to tax. Under the new rules, if your employment terminates due to a genuine redundancy, your initial claim will be paid tax free.
Members are not required to do anything to take advantage of the change to one account type. Your Protect member number remains the same.
Your Protect account
Protect benefits have been negotiated into your workplace agreement
Your employer has registered you with Protect because they are paying severance contributions and/or income protection insurance premiums to us on your behalf. The amounts paid will be in accordance with the terms of the industrial agreement that determines your pay and conditions, such as your enterprise bargaining agreement.
Severance or income protection contribution amounts differ for Protect members working under different agreements. You can contact your employer to access your agreement, or search via the Fair Work Commission website.
Only people registered by a Protect contributing employer can become worker members of Protect.
Expect a welcome pack and membership card
Once your employer registers you with Protect, you will receive a welcome pack with your membership number and information regarding the Protect services available to you. You may be eligible for a severance account, income protection or both. All members have access to free counselling.
Do I have to do anything?
- Activate your online account:
After you have been provided your membership number, visit the workers login portal
Select ‘generate password’
Verify your contact details in order to have a password sent to you so that you may then log in to manage your account using the workers portal or the Protect App.
Please note: unless we have your correct contact details, the generate password feature will not be useful to you. If you have any difficulty please call us on 1300 344 249. - Download the Protect App:
The ‘Protect Services’ App is available for download from the App Store or Google Play. The same login details generated via our website will give you access to the App so that you may:
- Review employer contributions
- Check your current account balance
- Lodge an initial severance claim
- Display your membership card
- Change your password
- Update your contact details or contact us
The Protect App
Great for accessing your account via your phone, the Protect App is available for download from:
. 
The online worker portal
Features available to you via the App are also available online. Log in to the worker's portal using the yellow button available at the top right of every page of this website.
The log in area for worker members
Account management features available to you via the Protect Services App are also available online. Log in to the worker's portal using the yellow button available at the top right of every page of this website.
It's viewable on the App
Access your card in 3 steps
- Log in to the Protect Services App on your phone
- Select the 'membership card' icon at top right
- View your digital Protect membership card
Download the Protect App:
. 
Generate a password via the workers portal
Activate your online account
- Jump online
Once you have been provided your membership number, new members should visit the workers portal, accessible via the yellow worker login button on every page of this website.
- Select ‘generate password’
Verify your contact details in order to have a password sent to you so that you may then log in to manage your account using the workers portal or the Protect App.
Please note: unless we have your correct contact details, the generate password feature via our website will not be useful to you. If you have any difficulty please call us on 1300 344 249.
What if I have already had acces and have forgotten my password?
The Protect App and the workers portal both have a ‘forgotten password’ feature that you can use to reset
your access at your convenience.
Find the option to generate your own password at the workers portal. Please note that this feature is not available from the Protect App.
If you know your membership number
You can use the 'forgotten password' feature on the App to reset your password. You can also change your password after logging in to your online account.
Please note that you will need your membership number and also the email address that we have on file for you to reset your password. If you have any problems, please message us via email or by using the 'contact us form' on our website.
If you don't know your membership number
If you don't know your membership number, or we do not have your correct contact details, you will not be able to make use of the 'forgotten password' feature on the Protect App and workers portal. Instead, please email or use the 'contact us form' to request access to your online account.
For security purposes, we will call you to confirm your identity. Your password will then be sent to you via sms and email once those details have been confirmed as up-to-date!
Option 1
Update via your online account
Once you have set yourself up with online access to your account you may follow these steps to update your contact details:
- Log in to the members portal using the yellow 'workers login' button available at the top of every page of this website using your membership number and password.
- From the dropdown menu at the top left of the screen, select 'Account Details / Balance'
- Select 'Edit Account Details' at the top of the screen
- Update your details as required
- Press 'Submit'
Option 2
Use the Protect App
If you've registered for online access, your password will also log you in to the Protect App. To update your contacts:
- Navigate to 'Account Details / Balance
- Select ' Contact Details'
- Touch on the details displayed on the right to edit your contact details
- Press 'save' at the top right of the screen
Download the Protect App:
Sometimes, but you'll need to check
Agreements that include income protection for non-apprentices will usually also include it for apprentices. Entitlement to severance contributions however, depends on your workplace agreement. In the electrical contracting industry, for example, it's usually only after completing your apprenticeship that you are entitled to receive severance payments.
Please check with your union or give us a call to determine your eligibility. Contact our Member Services Team on 1300 344 249 or via info@protect.net.au
Unfortunately no
EMPLOYERS JOIN PROTECT AND SIGN UP THEIR EMPLOYEES AS WORKER MEMBERS
Protect is limited to accepting contributions made under an industrial agreement and cannot accept registration of, or contributions from, individuals. This maintains the Fringe Benefits Tax exempt status of severance contributions to Protect, as an Australian Tax Office recognised Approved Worker Entitlement Fund. Protect income protection insurance is only offered as community cover, keeping premiums down and coverage up.
For more information:
Speak to your union for information on negotiating Protect into your workplace agreement.
Employers interested in joining can use our online enquiry form to kick off the application process or contact our Employer Relations Manager.
Email & Phone