Problem
In May 2023, after 12 years' service with his employer, Mark, aged 49, receives a genuine redundancy and leave payment as follows:
Tax-free amount - $800,000
Balance of redundancy (ETP) - $110,000
Accrued long service leave - $30,000
Accrued annual leave - $10,000
In addition, Mark's taxable salary for the 2022/23 financial year is $500,000 and he has used up his concessional contribution cap ($52,500 employer super guarantee and $15,000 salary sacrifice).
Mark's employer has advised him of the amount of tax he will pay on his redundancy and leave payments but he has come to you as his financial advisor for some final checks and advice with regards to his financial future post-redundancy.
1. Discuss any other tax implications that Mark's redundancy may have outside the tax being paid on his redundancy and leave payments.
2. As his financial advisor, what other issues would you raise with Mark?