For instance, there’s a special exemption that may allow you to contribute all (or part) of your payment into your superannuation where you can commence a tax free, fully accessible income stream without the risk of breaking the rules.
It’s also important to note that if your payment combines personal injury compensation with other compensation, for medical expenses or property damage for instance, only the amount relating to personal injury is exempt from the super contribution cap.
Timing is crucial
You need to make the contribution within 90 days of whichever of the following events occurs last:
You also need to advise your super fund you are claiming the exemption before or at the time of the contribution.
Tax free access?
If you can make a Personal Injury Payment into superannuation, you might also qualify to release your super based upon Total and Permanent Disability rules.
This may then permit you to commence a retirement phase pension which has tax-free earnings.
If established correctly it can also provide you with a tax-free income and access to lump sum withdrawals.
Making the Most of an Unfortunate Situation
Ensuring you are eligible to take advantage of these rules before you act is paramount. The details in these rules can make a big difference and if not fully understood the resulting outcomes may place you in a worse position.
Our Director of Wealth, Kurt Purkiss, has over a decade of experience in dealing with these cases.
If you would like to explore your options call (02) 4969 6600 to book in for a complimentary chat.
Level 1, 56 Hudson Street
Hamilton NSW 2303
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Office (02) 4969 6600
Fax (02) 4969 6655
info@lambourne.com.au
Level 25, Aurora Place
88 Phillip Street, SYDNEY NSW 2000
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Office (02) 8313 7071
Fax (02) 4969 6655
info@lambourne.com.au
Level 1, 56 Hudson Street Hamilton NSW 2303 PO Box 1050 Hamilton NSW 2303
Office (02) 4969 6600
Fax (02) 4969 6655
info@lambourne.com.au
