Changes were recommended to the Income Tax Assessment Amendment Regulations which related to the deductible portion of premiums for TPD insurance, and were passed on 5 October 2011.
These changes limit the deductible portion of TPD insurance premiums and give superannuation funds the option of using a simpler method to determine this portion, without having to engage an actuary.
Key changes from the draft Regulations include:
1. Clarification that deductibility is not affected if terminal illness is included into the insurance policy;
2. The inclusion of domestic (home) duties definition; and
3. The tightening of the definitions of TPD own occupation and TPD any occupation.
Importantly, there were no changes to the specified deductible portions of eligible TPD definitions, as follows:
Specified Deductible Proportion %
|TPD Any Occupation*||
|TPD Own Occupation*||
|TPD Own Occupation bundled with Death (Life Cover)*||
|*(Including with one or more of the following inclusions: ADL, cognitive loss, loss of limbs and domestic (home) duties)|
(Article courtesy of AIA Insurance, 19 April 2012)