Save
Busy. Please wait.
Log in with Clever
or

show password
Forgot Password?

Don't have an account?  Sign up 
Sign up using Clever
or

Username is available taken
show password


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account.
Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.


Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
focusNode
Didn't know it?
click below
 
Knew it?
click below
Don't know
Remaining cards (0)
Know
0:00
share
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

ETPs

Eligible Termination Payments

QuestionAnswer
What is the tax rate for a genuine redundancy payment received after 16 August 1983? 30% up to $205,000 (2018/2019) and 45% thereafter (plus 2% Medicare in both cases)
What does ETP stand for? Eligible Termination Payment
Is a payment for long service leave owing an ETP? No
Is an employment termination payment necessarily an ETP? No, some payments on termination of employment are not formally ETPs
Is the threshold (the ETP Cap Amount) at which the top marginal rate kicks in for an ETP fixed or indexed? Indexed annually to Average Weekly Ordinary Time Earnings, rounded down to the nearest $5,000
What are the common elements of employment termination payments relevant to this course? Genuine redundancy payments, annual leave and long service leave entitlements, payments for sick leave
What are the two main types of ETP? Life benefit termination payment; and death benefit termination payment
If an employer holds a life insurance policy over an employee, with the intention that the proceeds be paid to the employee's estate or beneficiaries in the event of their death, can the proceeds be treated as an ETP? Yes, under certain circumstances
When will a death benefit be treated as an ETP in the hands of the recipient? If the recipient is a "death benefits dependant" with respect to the deceased
How is a death benefit ETP taxed if it is paid to the trustee of an estate rather than to the ultimate beneficiary? In exactly the same way as if it had been paid directly to the ultimate beneficiary
Who can be a death benefits dependant? Spouse, former spouse, minor child of the deceased, adult dependeant, any other person who had a interdependency relationship before they died
What is the tax rate applied to the first $205,000 of the taxable portion of a death benefit termination payment made to a dependant of the deceased? 0%
How much Medicare levy would be payable on the taxable portion of a death benefit termination payment to a dependant of the deceased of $305,000? $2,000 (2% of $100,000)
What is the tax rate applied to the first $205,000 of the taxable portion of a death benefit termination payment made to a non-dependant of the deceased? 30% plus 2% Medicare levy
If a death benefit termination payment of $305,000 is received by a dependant of the deceased, how much is included in assessable income? $305,000. The concessional tax rates are achieved through the use of tax offsets, not through exclusion of amounts from assessable income
Is a payment for unused sick leave considered an ETP? Yes
Is an employee share scheme payment considered an ETP? No
Is a pension payment considered an ETP? No
Is a payment for unused annual leave considered an ETP? No
Is a non-genuine redundancy payment considered an ETP? Yes
Who must approve an early retirement scheme, in writing, before its implementation? The ATO
What is the formula to calculate the tax-free component of a genuine redundancy payment? Base Limit + (Years of Service * Service Amount).
What is the Base Limit as of 2018-2019 for the formula to calculate the tax-free component of a genuine redundancy payment? $10,399
What is the Service Amount as of 2018-2019 for the formula to calculate the tax-free component of a genuine redundancy payment? $5,200
Is the tax-free component of a genuine redundancy payment considered an ETP? No
Is the tax-free component of a genuine redundancy payment included in assessable income? No
How will the Base Limit in the formula to calculate the tax-free component of a genuine redundancy payment change in future years? The base limit and the amount per year of service are indexed annually by Full-Time Adult Average Weekly Ordinary Time Earnings
How will the Service Amount in the formula to calculate the tax-free component of a genuine redundancy payment change in future years? The base limit and the amount per year of service are indexed annually by Full-Time Adult Average Weekly Ordinary Time Earnings
What is the tax-free component of a genuine redundancy payment paid to an employee over the age of 65? A payment to an employee over the age of 65 cannot be a genuine redundancy payment under the ETP provisions
After taking out the tax-free component for a genuine redundancy payment, what are the other two categories of tax-free components for a life benefit termination payment? Invalidity Segment and Pre-July 1983 Segment
Created by: frankhall
Popular Law sets

 

 



Voices

Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
Retries:
restart all cards