One of the requirements for a taxpayer to be entitled to the tax concession for a genuine redundancy payment is an age requirement. This means that if the taxpayer is dismissed after the earlier of the day he or she turned 65 or, if his or her employment would have terminated when he or she reached a particular age or completed a particular period of service, the day he or she reached the age or complete the period of service (as the case may be), then the payment is not a genuine redundancy payment.  

In a recent case before the AAT, the taxpayer was 67 and but for that age it appears the payment may have been a genuine redundancy payment.  

The taxpayer (self-represented) argued that the Commissioner had acted in breach of the Commonwealth Age Discrimination Act, 2004 in disallowing the genuine redundancy payment on the basis of his age.  

The problem for the taxpayer was that section 40 of the Age Discrimination Act, 2004 provides that anything done by a person in direct compliance with a taxation law is not unlawful. The Commissioner therefore had acted in direct compliance of a taxation law in holding that the payment to the taxpayer was not a genuine redundancy payment and it was not unlawful for him to do so.  

The taxpayer therefore lost.  

One cannot help feel some sympathy for the taxpayer because the provisions of the tax law imposing an age requirement are discriminatory. Other taxpayers employed by the same employer who were under 65 obtained the benefit of the genuine redundancy concession but not this taxpayer merely because of his age.

However it does need to be borne in mind that for certain taxpayers what may well otherwise be a genuine redundancy payment will not be for those taxpayers due to their age.