New super break for terminally ill

Australians with a terminal illness will be able to access their superannuation before they turn 60 without paying tax on their lump sum benefit under a new change in the national law.

Federal Revenue Minister and Assistant Treasurer, Peter Dutton, said that the law would be changed because it put too much financial and emotional pressure on people suffering from a terminal illness.

At present people under the age of 55 who accessed a lump sum superannuation benefit from a taxed superannuation fund were subject to a maximum tax rate of 20% plus the Medicare levy. This tax was generally withheld by the superannuation fund when it made the lump sum payment.

Minister Dutton said that “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”.