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Change to redundancy claim payments now in operation

One Protect account replaces TER & GRA

We’re super excited to report that we have obtained Australian Taxation Office approval to implement an improvement to the Protect severance scheme. From 17 December 2019, the reason for termination of a worker’s employment determines if an initial severance claim will be taxed or paid tax free. Account nominations are no longer required.

Account types have been abolished. Protect now pays severance claims to workers based on the event which caused their employment to terminate.

What does this mean for you?

Protect no longer has Termination (TER) and Genuine Redundancy (GRA) account types. There is now just one Protect account that has the benefits of both the old TER and GRA accounts.

  • If your employer makes you genuinely redundant, your initial severance claim will be paid to you tax free.
  • If your employment is terminated for any other reason, your initial claim will be taxed.

*The tax free threshold for the 2021/2022 financial year is $11,341 for the initial year, and $5,672 for each full year of service with your employer.

NOTE: This change only benefits you if you have a Protect account which an employer contributes severance payments to on your behalf. If your employer pays only income protection premiums for you to Protect then you cannot claim severance.

What do you have to do?

Members are not required to do anything to take advantage of this change.

Your Protect member number remains the same. Regardless of whether you previously held a TER or GRA account, you now hold the new Protect account and are eligible to lodge a severance claim regardless of reason for termination of employment.

Previous GRA account holders could only lodge a claim upon redundancy or retirement. Those members may now lodge a severance claim should they resign or their employment be terminated.

Please contact our Member Services Team if you have any queries phone: 1300 344 249, or email:

Examples of the change in practice:

  1. Andrew elected to have what used to be called a Genuine Redundancy Account (GRA) and he has resigned.

    As Andrew’s position was not made redundant, he would not have received a payment from Protect. His balance would have remained with Protect until he was made redundant from a future position.

    NOW: Andrew’s resignation is considered a termination event and therefore Andrew would receive a termination payment, which is taxed.
  2. Bill had the old default Termination Account (TER) and his position is made redundant.

    Previously: Bill could make a claim as his employment was terminated. However even though the position was redundant, the payment made to him would have been a termination payment, which is taxed, because Bill had not previously nominated for a GRA account that offered tax savings in the event of redundancy.

    NOW: Bill’s position is made redundant, so Bill would receive a redundancy payment, which has a tax free component.
Published Tuesday 17 December, 2019