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Changes to tax for members with a terminal illness
The government has introduced new tax arrangements which will benefit members with a terminal illness. The arrangements will allow the ATO to vary the rate of withholding tax for some terminally ill members who receive a lump sum.
PSS members who are leaving work because they are terminally ill may be eligible for this tax concession. In order to be considered for the concession, members should include medical documents which show they meet the ATO definition of being terminally ill when forwarding their application for superannuation benefits.
This ATO arrangement does not alter the PSS provisions for members who have a terminal medical condition to be eligible to choose the terminal lump sum option. They must have an invalidity retirement certificate.
The difference between the ATO and PSS definitions of being terminally ill means that terminally ill PSS members may be entitled to choose the option of a terminal lump sum payment, but may not be eligible for the ATO terminally ill tax free lump sum.
For further information call 1300 000 377.