Lump Sum Payment Triggers

(last updated 05/06/2014)

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 A number of different terms are used to describe the different ways you can terminate your employment and or receive a death benefit ETP. The termination type also affects the different types
of payments that you may receive and there tax treatment, for example, concessional tax treatment of Genuine Redundancy payments.

Ways you can leave your job include:

Resignation - When you resign, you generally make a decision to leave your job and your job or position is not abolished. This means payments you receive will not be regarded as redundancy payments and won’t qualify for the genuine redundancy tax concessions. An amount paid for resignation is  a Lump Sum A.

Age Retirement - Age retirement means you have reached your retirement age and have decided to leave the workforce. When you leave, your employer will pay your salary and wage income owed and accrued leave. An amount paid for age retirement is  a Lump Sum A.

Redundancy - A genuine redundancy payment is a payment you receive because the job you were doing is abolished. That is, your employer has made a decision that the job you are doing no longer exists and your employment is to be terminated. The Genuine Redundancy Payment is shown as Lump Sum D on your PAYG Payment Summary

Dismissal - Dismissal is the involuntary termination of an employee. It is the employer's decision that the employment will end, rather than the employee's decision to leave.

Death of an employee - You may receive a termination payment following the death of an employee. These are called death benefit ETPs.

See this post for details and a checklist of the tax treatment of Lump Sum payments

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