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Total and permanent disability self insurers |
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 In May 2011 legislation was introduced to extend the current transitional relief for the deductibility of TPD insurance premiums to funds that self insure their liability to provide disability benefits. As the legislation has now received royal assent, taxpayers should review their assessments back to the 2004-05 income year.
On 26 May 2011 legislation was introduced into parliament to extend the current transitional relief for the deductibility of total and permanent disability (TPD) insurance premiums to funds that self-insure their liability to provide disability benefits. The transitional relief will provide self-insured funds with greater scope to deduct the notional cost of insurance cover regarded as TPD insurance for the income years 2004-05 to 2010-11.
The following act received royal assent on 27 June 2011:
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As the legislation has now received royal assent taxpayers should review their assessments back to the 2004-05 income year as follows:
- Those taxpayers who claimed deductions that accord with the changes do not need to do anything more.
- Those taxpayers who under-claimed deductions can seek amendments and if a reduction in liability results, interest on overpayment will be paid.
- Those taxpayers who over-claimed deductions will need to seek amendments. No tax shortfall penalties will be applied where deductions were claimed in accordance with the announcement and any interest accrued will be remitted to the base interest rate up to the date of enactment of the law change. In addition, any interest in excess of the base rate accruing after the date of enactment will be remitted where taxpayers actively seek to amend assessments within a reasonable timeframe after enactment.
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