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Disabilty super payout???

Discussion in 'Superannuation, SMSF & Personal Insurance' started by ramble, 18th Dec, 2012.

  1. ramble

    ramble New Member

    Joined:
    18th Dec, 2012
    Posts:
    2
    Location:
    sydney
    Hi,
    Hope someone will be able to answer this question.
    15 years ago i was injured at work and have been unable to work since. I made a claim agiants my workers comp, they admitted liabilty and agreed to pay my wage untill retiement age as i was totally unfit for work.
    As a result my soliciter aprroched my super fund and applied for a total disabilty/death payment which was payed to me about 13yrs ago.

    Now my question is with the new workcover laws my insurer is Forcing me to return to work fit or not. as i will be earning a wage will i have to pay back that super payout as i was deemed never being able to work again when i received it.

    someone please advise me as my soliciter has no clue now
     
  2. jeffery85

    jeffery85 Active Member

    Joined:
    20th Jul, 2012
    Posts:
    29
    Location:
    canberra
    I would grab your terms and conditions of your policy and read it with a fine tooth comb!!

    Was there a settlement contract ? If so surely your legal representative as part of this has a responsibility to communicate this to you. If so hit them up first.

    At times your wages are subsidized for at least the first year by the government usually so your position maybe customized for you and what you can do. so it could be argued that in fact you are not a fully productive employee and the role may not be available to you if the support was not supplied and there forth you are not fit for employment without the customization/support.

    I would argue its a well being strategy and research supports this.

    That's the approach I would argue it

    Cheers

    Jeffery
     
  3. Superman

    Superman Well-Known Member

    Joined:
    6th Nov, 2007
    Posts:
    343
    Location:
    Gold Coast, QLD
    You won't have to pay any super back.

    The super company was obviously satisfied all those years ago you met the definition of being totally and permanently disabled so they were correct in paying you.

    The fact your situation has changed in the future doesn't impact it.

    I second Jefferys comments also - and find another solicitor who knows the area well.
     
  4. Small small

    Small small New Member

    Joined:
    9th Jan, 2013
    Posts:
    1
    Location:
    Wodonga vic
    I am 38 and my tpd paperwork has been in for 13 months - so it should be getting close now. I have representation and I am happy with them so far. Just wondering if I would have to pay tax on my pay out? It's a very large payout so I'm hopping they don't take to much as I have only this money to get me to the end!!!
     
  5. Superman

    Superman Well-Known Member

    Joined:
    6th Nov, 2007
    Posts:
    343
    Location:
    Gold Coast, QLD
    Hi Small small

    13 months - shesh - hope they finalise it soon.

    The tax calculations get a little complicated - there is an amount which is tax free, and amounts in addition to that are potentially taxable.

    The additional / increased tax free component amount is worked out as:

    (Days to Retirement)
    _____________________________ multiplied by the benefit amount
    Service Days + Days to Retirement)

    Days to Retirement
    = Number of days between when you became totally and permanently disabled and your 65th birthday
    Service days = Days between your service period start date (this will be on your super fund statement) and when you became disabled


    For example, if you started work when you were 18, became disabled at 38, and the payment is $400k, then the increased tax free amount will be about $229,787 (57%).

    If a lump sum then the tax will be 20% + 1.5% Medicare levy on any 'taxable' component, and 0% on any tax free component. If a pension / income is paid (depends on your super fund - they will probably just pay a lump sum) then the income amount will be taxed at your marginal rate less a 15% offset - which is not too bad.

    However all of the above is still only part of the answer - it is essential you seek competent financial + tax advice BEFORE they pay you anything so you can set it up to give you the best outcome (i.e. least tax) - which could be a mix of a lump sum and a pension.

    I have attached some information for everyone's reference which may be helpful.

    SM
     

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