Superannuation funds will be able to streamline the way they claim tax deductions for the cost of total and permanent disability (TPD) insurance provided to members following the passage of legislation by the Senate yesterday.
The legislation, contained in the Tax Laws Amendment (2011 Measures No. 4) Bill 2011, will allow the percentage of certain TPD insurance premiums that can be claimed as deductions by superannuation funds to be specified in regulations. These changes will apply from the 2011-12 income year.
The cost of TPD insurance provided through superannuation is deductible to the extent the policies provide cover that is consistent with the definition of 'disability superannuation benefit' in the Income Tax Assessment Act 1997. Where broader insurance cover is provided, superannuation funds must obtain an actuary's certificate to determine the deductible portion of the premium (unless that portion is specified in the insurance policy).
"These changes will give many superannuation funds the option of using a simpler method to determine the deductible portion of TPD insurance premiums without having to engage an actuary," the Assistant Treasurer, Mr Bill Shorten said.
To support these legislative amendments, Mr Shorten today announced the release of a consultation paper containing the deductible percentages for TPD insurance premiums, and descriptions of insurance policies, which would be prescribed in the regulations.
The consultation paper is available at the following link www.treasury.gov.au.
Comments on the paper are sought by 1 July 2011 and can be sent to the following address:
Benefits and Regulation Unit
Personal and Retirement Income Division
PARKES ACT 2600
Email: [email protected]
16 June 2011