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Date of article: 22 January 2008
Last updated: N/A

Terminally ill can excess super early

— Interim measures to 30 June 2008 —

Further to Peter Dutton, Minister for Revenue and Assistant Treasurer, announced on 11 September 2007 that people with a terminal illness under the age of 60 will be able to access their superannuation tax free, the Australian Taxation Office has introduced interim measures having effect from 12 September 2007 to 1 July 2008.

The Commissioner of Taxation has varied the rate of withholding to nil on all superannuation lump sum benefits paid to eligible terminally ill members (being terminally ill and satisfy an existing condition of release).

A terminally ill person for this purpose is defined to be a person suffering from an illness which in the normal course would result in death within a period of 12 months. A certification is required from 2 medical practitioners, at least one of these being a specialist.

As any superannuation lump sum payment made to eligible terminally ill members on or after 12 September 2007 is tax free, the member will not be required to declare the income in their personal income tax return.