Rollover of Excessive Redundancy Payment (Elligible Termination Payment)

After any tax-free component has been deducted, the balance of the excessive redundancy payment or Eligible Termination Payment (ETP) (assessable amount) is taxed at a concessional rate up to a limit called the ETP cap amount.

From 1 July 2007, you cannot contribute or roll over any excessive redundancy payment (ETPs) you receive
into your super fund, unless they are transitional ETPs.

A excessive redundancy payment you receive is a transitional ETP if it is paid between 1 July 2007 and 30 June 2012 and you were entitled to it due to termination of your employment under one of the following:
  • a written contract
  • an Australian or foreign law, or an instrument under such a law
  • a workplace agreement under the Workplace Relations Act 1996.
The contract, law or instrument under that law, or agreement must be in force at 9 May 2006.
For more information about excessive redundancy payments or ETPs, transitional ETPs and tax rates on excessive redundancy payments see this FREE fact sheet Employment termination payments.

For details on taxation of excessive redundancy payments (ETP's) see this post ==> Tax on excessive redundancy payments.

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