ETP’s will be added to the taxpayer’s other taxable income. 

 

Only that part of an ETP which takes a taxpayer’s total annual taxable income (including the ETP) to no more than $180,000 will receive the ETP tax offset.

 

Any amount of the ETP that causes taxable income to exceed $180,000 will be taxed at the usual marginal tax rates. 

 

ETP’s will be added to the taxpayer’s other taxable income. 

 

Only that part of an ETP which takes a taxpayer’s total annual taxable income (including the ETP) to no more than $180,000 will receive the ETP tax offset.

 

Any amount of the ETP that causes taxable income to exceed $180,000 will be taxed at the usual marginal tax rates. 

 

Financial year	Cap
2012/2013	$175,000
2011/2012	$165,000
2010/2011	$160,000
2009/2010	$150,000
2008/2009	$145,000
2007/2008	$140,000

 

NB:

The taxable components of all life benefit employment termination payments received in an income year are counted towards this cap.

 

Also counted towards the cap are the taxable components of any life benefit employment termination payments which have been received in an earlier income year for the same employment termination.

 

The death benefit cap is independent of the life benefit termination payment (i.e. a recipient can get both).

 

 

The tax treatment of the Taxable Component can be summarised as follows:

 

Recipient	Within Employment Termination Payment Cap	Excess above Employment Termination Payment Cap
Dependant	Tax-free	Recipient’s top marginal tax rate plus Medicare levy
Non-dependant	Maximum rate of 30%	Recipient’s top marginal tax rate plus Medicare levy

 

 

 

Age	Max. Tax Rate Taxed Element	Max. Tax Rate Untaxed Element
Age under 55*	20%	30%
Age 55 or over:*
-  Less than ETP low rate threshold below	Nil	15%
-  More than ETP low rate threshold below	15%	30%

 

*Included in Taxable Income for Medicare Levy purposes except for the taxed element of the ETP low rate threshold.

 

 

Post 30/6/83 component – age 55 and over

 

Year	Low rate ETP threshold
2006/07	$135,590
2005/06	$129,751
2004/05	$123,808
2003/04	$117,576
2002/03	$112,405
2001/02	$105,843
2000/01	$101,188
1999/00	$97,109
1998/99	$94,189
1997/98	$90,916
1996/97	$86,917
1995/96	$83,574
1994/95	$79,975

 

 

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