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Redundancy. Presented by QSuper. Important information.

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redundancy

Redundancy

Presented by QSuper

important information
Important information

This information has been prepared for general purposes only, without taking into account your objectives, situation, or needs, and should not be relied on a as legal or taxation advice, nor does it take the place of such advice so it may not be appropriate for your circumstances.

You should read the product disclosure statement (PDS) and consider your circumstances before you make an investment decision. You can download a PDS from our website, or call us and we’ll send you one. Before acting on any of the information, you may wish to consider obtaining personal financial advice.

This presentation is issued by the Fund Administrator, QSuper Limited (ABN 50 125 248 286, AFSL 334546), on behalf of the QSuper Board of Trustees (ABN 32 125 059 006). The QSuper Board of Trustees is the issuer of interests in the QSuper Fund (ABN 60 905 115 063). Where the term ‘QSuper’ is used in this document, it represents the QSuper Board of Trustees, the QSuper Fund, and QSuper Limited, unless expressly indicated otherwise.

today
Today

What to consider

Payments

Hypothetical case

study

payments
Payments
  • Accrued leave
  • Severance payment
  • Possible incentive payment

Employer Redundancy Package

QSuper Benefit

Can you access this or will you leave it in your QSuper account?

1 accrued leave
1. Accrued leave
  • Recreational leave
  • Long service leave
  • Both paid as lump sums (Likely to be taxed)

Tax on unused leave entitlements

1. Plus Medicare levy of 1.5%

2 severance payment
2. Severance payment
  • A severance payment of two weeks' pay year of service
  • The minimum payment is four weeks' pay
  • The maximum payment is 52 weeks' pay
3 incentive payment
3. Incentive payment
  • In addition to the severance payment, an incentive payment may be offered once only to encourage employees to exit the department on or by a specified date.
  • The payment will be $6,500 or 12 weeks' pay at the employee's substantive level, whichever is the greater.
  • Incentive payments may apply to early retirements and redundancies, but do not apply to retrenchments
  • Conditions apply – see your HR representative for more information
severance payment incentive payment
Severance payment & Incentive payment

Tax Treatment

  • Genuine Redundancy Payment

Tax-free portion (under age 65)

    • $8,806 + $4,404 for each completed year of service
    • Over this amount is an employment termination payment (ETP)
  • Employment termination payment

Tax depends on:

- age

- the amount of the payment

- your taxable income

- whether any part of the payment relates to a period before 1 July 1983

qsuper benefit
QSuper benefit
  • Membership can continue (leave your funds)
  • Accumulation account – grows through investment
  • Defined Benefit account – what happens?
    • Official Employment Termination Certificate from employer
  • Non-Queensland Government employers can pay into your QSuper Accumulation account
  • Insurance – what happens?
  • Access to your super?
qsuper benefit obtain a quote
QSuper benefit (obtain a quote)
  • ‘Cash’ value
    • Can access
    • May be subject to tax - rates vary
  • Preserved amount
    • ‘Condition of release’
    • May be subject to tax - rates vary

Total benefit

what are the considerations
What are the considerations?

Getting established

Pre-retirement

Starting out

  • Opportunity for new challenge
  • Financial position
  • Job security
  • Financial and family commitments
  • Work or retire?
  • Top up retirement savings
must meet living expenses
Must meet living expenses

Human Services (formerly Centrelink)

Newstart Age Pension

Investments

Income

Partner

Work

Superannuation

must review retirement and insurance plans
Must review retirement and insurance plans
  • Super contributions stop (and may be lower in future)
  • QSuper insurance ceases – continuation may be possible
  • Long term impact of withdrawing super?
ann and john s situation
Ann and John’s situation
  • Situation (both)
    • Income $70,000
    • 40 weeks severance, four weeks annual leave and ten weeks long service leave
    • 20 years of service
  • Ann (age 48)
    • Commitments – mortgage and dependent children
  • John (age 58)
    • May work, may retire
employer estimate for ann and john
Employer estimate for Ann and John

Assumptions: Income based on $70,000 and 20 years service.

1. Marginal tax at 31.5%, leave loading not included.

2. Genuine redundancy or ATO approved voluntary early retirement,

2012/2013 tax free amount of $8,806 + $4,404 for each completed year

of service. In this example that equals up to $96,886 tax-free

ann s issues
Ann’s issues
  • Work/ Career
    • How soon can she find work?
  • Finances
    • Meet living expenses including mortgage and family
    • Impact on family benefits and tax offsets
    • Limited access to super and higher tax
    • Financial security – insurances and retirement funding
  • Benefits
    • Lump sum for income, debt and family
john s issues
John’s issues
  • Career
    • Work - part-time / full-time elsewhere?
    • Fully retired – all super available
  • Finances
    • Meet living expenses - less commitments
    • Income - work, lump sum or super
    • Super - may contribute lump sum after tax
  • Benefits
    • Kick-start retirement, greater flexibility
the future
The future…….
  • The rest of your life
    • Lifestyle, career, where to next?
  • Financial
    • Savings, debt, finance the next phase?

Your decision

help and advice is readily available
Help and advice is readily available
  • General super information
  • Call our award winning Contact Centre on 1300 360 750
  • Get information, and use tools and calculators on our websiteqsuper.qld.gov.au
  • Come to other seminars