An eligible termination payment (ETP) is a lump sum superannuation benefit or similar payment. Most lump sum payments from super funds or approved deposit funds with be ETPs. ETPs can be rolled over within the superannuation system and can be used to buy certain pension and annuity products.
An ETP can also be a termination payment from an employer, examples being a golden handshake on retirement or bona-fide redundancy payout, approved early retirement scheme or ex-gratia payment.
These are ETPs:
- Lump sum payment from a super fund or Retirement Savings Account (RSA)
- A rollover payment from an approved deposit fund or a deferred annuity
- Some payments resulting from the commutation of a pension or qualifying annuity
- Payment of the residual capital value of a super pension or qualifying annuity
- Payment on termination of employment such as a golden handshake
- Unused sick leave or payment in lieu of notice
- Bona fide redundancy and approved early retirement payments in excess of $5,295 plus $2,648 for each year of completed service (numbers indexed and will change annually, these are 2001/2002 numbers)
- Compensation for wrongful dismissal
- An invalidity payment
- An amount taken to be an ETP from the disposal of small business assets
- Payments taken from Superannuation Holding Account Reserve (SHAR) and the ATO under the Superannuation Guarantee (Administration) Act.
The following are not ETPs and can't be rolled over. On the other hand they are not included in your reasonable benefits limit.
- Bona fide redundancy or approved early retirement payments within the limits above. These are tax free and don't count to your reasonable benefits limit
- Unused annual leave, long service leave or leave loading
- Personal injury compensation
- A payment made as an advance or loan
- Payments made under a legally enforceable contract in restraint of trade.
These other benefits can always be contributed to superannuation as an ordinary payment, but they are can't be rolled over over because a rollover is a special transfer from one complying superannuation entity to another, non-ETP money can't be rolled over as it isn't already in super. You can spend it, or invest it, it is up to you.