VIC Is Retrenchment Package Considered as an ETP?

[Sina]

I have been working for a small business (with under 15 staff) for over 5 years now. My company decided to pay me a retrenchment package of 10weeks in Aug-16. As the smaller size of it, the company is not required to pay me but it is willing to do that.

Just wondering if the payment is qualified as an ETP (Employment Termination Payment)? So that the tax on the payment will be calculated accordingly.

Thanks for your help.

 

[Sophea]

An ETP is a payment given to an employee, as a result of the termination of the employee’s job. It must generally be made within 12 months of termination.

Therefore if it was paid within 12 months of your termination and it would not have been paid to you but for the termination I think it would most likely be classed as an ETP. However I don't think it would have a tax free component as a normal redundancy package would as it may not be a "genuine redundancy" since it wasn't compulsory - not 100% sure on that.