S27E ITAA 1936 describes the requirements of an "approved early retirement scheme". The following conditions generally must be met for an AERS:

• The scheme must apply to all employees or to employees in a particular category, ie age or trade skill.

• The purpose of the scheme must be to rationalise or reorganise the business by replacement of employees with new technologies or with employees of other skills or age.

• The scheme must be approved by the commissioner as an approved early retirement scheme before its implementation.

An AERS gets a tax free component just like a bona fide redundancy, and the formula for calculating it is just the same (2006/2007 tax year):

    Tax free amount = $6,783 + ($3,392 * years of service)

Just like a bona fide redundency this tax-free amount is not an ETP, and can't be rolled over to a super fund. If you are eligible to contribute to super you can put this money into super as a personal contribution.