Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1992 No. 208 of 1992 - SECT 50

50. Section 27A of the Principal Act is amended:
(a) by inserting before paragraph (k) of the definition of "eligible
termination payment" in subsection (1) the following paragraph:

"(ja) the tax-free amount of a bona fide redundancy payment, or of an approved
early retirement scheme payment, made on or after 1 July 1994;";

   (b)  by omitting from subsection (1) the definition of "concessional
        component" and substituting the following definition:

"'concessional component', in relation to an ETP, means so much of the ETP as
consists of, or is attributable to:

   (a)  a bona fide redundancy payment made before 1 July 1994; or

   (b)  an approved early retirement scheme payment made before 1 July 1994;
        or

   (c)  an invalidity payment made before 1 July 1994;";

   (c)  by inserting the following definitions in subsection (1):

"'post-June 1994 invalidity component', in relation to an ETP, means so much
of the ETP as consists of, or is attributable to, an invalidity payment made
on or after 1 July 1994;
'tax-free amount', in relation to a bona fide redundancy payment or an
approved early retirement scheme payment, has the meaning given by subsection
(19);";

   (d)  by adding at the end the following subsections:

"(19) For the purposes of this Subdivision, the tax-free amount of a bona fide
redundancy payment, or of an approved early retirement scheme payment, made
during a year of income is so much of the payment as does not exceed:

   (a)  if the year of income is the 1994-95 year of income-the amount worked
        out using the formula:
        $4,000   +   $2,000     x     Years of service
where:
'Years of service' means the number of whole years in the period, or the
aggregate of the periods, of the employment to which the payment relates; or

   (b)  if the year of income is a later year of income-the amount worked out
        using that formula subject to the indexation arrangements set out in
        subsection (20).

"(20) The formula in subsection (19) applies for the 1995-96 year of income or
a later year of income as if each indexable amount were replaced by the amount
worked out using the formula:
           Indexation factor   x   Previous indexable amount
where:
'Indexation factor' means the indexation factor for the year of income worked
out under section 159SG;
'Previous indexable amount' means the indexable amount for the previous year
of income.

"(21): In subsection (20):
'indexable amount' means:

   (a)  an amount of $4,000 or $2,000 specified in the formula in subsection
        (19); or

   (b)  if that amount has previously been altered under subsection (20)-the
        altered amount.".