When a staff member leaves your employ, there are often a number of administrative tasks that need to be sorted out, including super.

Convenience

One of the great things about our membership is that your employees can remain with Health Super, even when they leave your employ. It might be worthwhile letting your employees know that - it's one less thing they need to think about.

Employment termination payments

If you make a final payment to an employee, this payment may qualify as an 'employment termination payment' (ETP). There are a number of requirements for this type of payment so we've tried to provide some basic information from the ATO to help you.

An ETP is a lump sum payment that you may make to an employee when they stop working for you.

It may be made up of two components – a tax free component and a taxable component. The taxable component of the ETP will be taxed at different rates depending on your employee’s age and, in the case of redundancy and early retirement scheme payments, length of employment. The tax treatment also differs in the case of ETPs received before 1 July 2012, as a result of an entitlement in a workplace agreement existing before 10 May 2006 (called transitional termination payments).

When do I pay an ETP?

A payment is an ETP if it is paid in consequence of termination of employment, usually within 12 months after the termination. A termination can occur when:

• you or your employee requests it
• a mutual agreement has been made (this may include retirement)
• your employee becomes permanently disabled, or your employee dies.

You may have an obligation to make an ETP under an award or workplace agreement. However, you are not always required to pay employees an ETP. You may choose to make a payment:

• in addition to or above the amount set out in an award or agreement, or 
• when you are not obliged to do so.

Once you have determined their entitlements you will then need to calculate what if any part of the payment is an ETP. If the ETP is a transitional termination payment, you must also provide your employee with certain information which gives them the choice of receiving the transitional termination payment in case or as a transfer to a complying super fund or annuity.

For more information, you can visit the ATO website or call 13 10 20.

Defined Benefit

If you are an employer under the Defined Benefit (DB) scheme, there are a number of administrative tasks that need to be completed so that your employee’s DB benefit can be calculated and managed.

Call your account manager as a first step and they can help you establish what needs to be done.