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Tax free super for terminal patients THE Australian Government is to exempt people with a terminal illness who access their superannuation under the age of 60 from the tax on their lump sum benefit.Individuals under the age of 55 who access a lump sum superannuation benefit from a taxed superannuation fund are currently subject to a maximum tax rate of 20 per cent (plus the Medicare levy). This tax is generally withheld by the superannuation fund when it makes the lump sum payment. While the actual tax payable may be lower as it depends on the individual's marginal tax rates, any refund they may be entitled to would not be determined until the end of the financial year. "The Government has decided to change this area of tax legislation because we believe we need to remove as many of the stresses as possible for people in this terrible situation," Australia's Minister for Revenue and Assistant Treasurer, Peter Dutton said on announcing the changes. "I have been able to look closely at the case of a young woman named Christina Fiddimore in particular, and the awful circumstances she and her family are experiencing." "In this particular case, the Government will provide the support Christina and her family needs," Mr Dutton said. Until the legislation passes into law, the Government has asked the Commissioner of Taxation to consider changing the rate at which superannuation funds are required to withhold from payments to people in these situations. Amendments to the legislation have effect for payments received after last month's announcement. Further details will be determined in consultation with the superannuation industry, the medical profession and support groups. |
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