concessional component

one of the specially treated components of a lump sum eligible termination payment (ETP) benefit. Until 30 June 1994, the concessional component consisted of bona fide redundancy payments, invalidity payments and payments made to retirees under approved early retirement schemes. From l July 1994, approved early retirement and redundancy payments are not part of an ETP, and invalidity payments form a new separate component. Concessional components are not now able to be paid from a superannuation fund, although they may still be paid directly by employers. Concessional components paid before 1 July 1994 and rolled over will remain until they are finally paid out as benefits.

From 1 July 2007 the concessional component forms part of the non-taxable crystallised segment of the member’s benefit.

See also crystallisation