Arabic version: تسمانيا ستغطي الالتزامات الضريبية لتعويضات إنهاء الخدمة

According to ABC News, the Tasmanian government says it will deal with any financial implications if the Australian Taxation Office seeks payments connected to incorrectly classified voluntary redundancy payouts for former state service employees.

The issue could stretch back more than a decade, potentially earlier than 2011, when Labor was in government under then-premier Lara Giddings. The government estimates the incorrect practice began during that period, which also involved significant job cuts, including voluntary redundancies.

Voluntary redundancy payments had been classified as “genuine redundancies”, which are tax-free up to a limit and then concessionally taxed. The ATO says genuine redundancies are not voluntary. The government has conceded the payments should instead have been treated as employment termination payments, which are generally concessionally taxed up to a certain limit.

The changed classification means affected workers should have paid more tax on their redundancy payments. The government self-reported the matter to the ATO after discovering the problem, following a report by the Community and Public Sector Union that a voluntary disclosure had been made.

The state has resolved the tax treatment for the current redundancy round, covering the tax for employees who have already received payouts so they obtain what they expected. A government spokesperson said no past employee would be affected and that the employer would handle any financial consequences. The Department of Premier and Cabinet says former employees need take no action at this stage.