Understanding financial advice
Financial life goals
Tools and resources
Products and services
Investing with IOOF
Your retirement goals
Find out what your peers are asking – based on real-life questions submitted to TechConnect.
By Mark Gleeson, Senior Technical Services Manager
Q: I thought certain termination payments could still be rolled into super, is that correct?
A: Employment termination payments cannot be rolled over into super.
Prior to 1 July 2012, certain transitional termination payments could be directed into super. Under current rules, employees must receive the net amount and cannot direct or roll the amount into super.
However, you may wish to consider a contribution strategy to invest the net proceeds into super. For example, you may wish to explore non-concessional contributions, personal deductible contributions, spouse contributions etc.
Your client (or spouse) must be eligible to contribute to super, that is, they must be under age 67 or satisfy the work test or work test exemption from age 67 (and generally be under age 75). A personal deductible contribution strategy may be useful to manage tax on termination payments. If your client qualifies for catch-up concessional contributions, the amount of the deduction could be significant.
Click here to read about additional questions your clients may ask you relating to redundancy.
If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.
DisclaimerThe information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.