Qantas Engineering redundances - Advice required!!!

[stuntcock]

Genuine or Non Genuine Redundancy

Is the redundancy package from Qantas a"Genuine Redundancy"

OR

"Not A Genuine Redundancy"

Taxation of termination payments



<a name="Content">Redundancy

A redundancy can be genuine or non-genuine.
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.
A genuine redundancy has a special tax treatment under the tax law where an amount paid up to a limit is tax free. If your redundancy does not meet the definition of genuine redundancy then it will be taxed under the normal ETP rules definition.
A genuine redundancy does not occur when:

• you are dismissed because you reach normal retirement age
• you left voluntarily
• your contract is terminated
• you were dismissed because of disciplinary or inefficiency reasons.

For more information about the meaning of genuine redundancy, refer to Taxation Ruling TR 2009/2 Income tax: genuine redundancy payments.
Genuine redundancy payments you receive are tax-free up to a limit based on your years of service with your employer. The tax-free limit is determined by:

The base amount and service amount are indexed annually.
For the year ended 30 June 2013, the tax-free limit is $8,806 (base amount), plus $4,404 (service amount) multiplied by the years of service.
For example, for 10 years service, the tax-free limit is:

The amount more than the limit will then form part of your ETP.
Example 7: Genuine redundancy

Example 8: Not a genuine redundancy