Many older workers may not realise that if they are made redundant and are over 65 the tax free employer payment that applies for each year of service is not tax free to them. All monies received as part of a redundancy are taxed. This is discrimanatory. Before the GFC federal government policy was to encourage workers to continue past 65. The other sting in the tail is that if you are made redundant and apply for the age pension you are not eleigible for the age pension bonus that has a maximum payout of $30,000 if you work until age 70 without claiming the age pension. So, you are made redundant, pay tax on all monies received, apply for the pension, get another job and work till you are 70 but cannot apply for the pension bonus as you have already made a claim even if you did not actually receive any pension because you managed to find another job.
I sent letters outling this situation to Lindsay Tanner and Ken henry but have not received a response. More letters are needed before Ken Henry completes his review of the tax system.
