1. Section 83-175 of the ITAA outlines the taxation regime in relation to redundancy payments. Relevantly for this application, it provides as follows:

83-175(1) A genuine redundancy payment is so much of a payment received by an employee who is dismissed from employment because the employee's position is genuinely redundant as exceeds the amount that could reasonably be expected to be received by the employee in consequence of the voluntary termination of his or her employment at the time of the dismissal.

1. If a taxpayer receives a genuine redundancy payment, they do not have to pay income tax on the payment so far as it does not exceed a certain amount calculated pursuant to the ITAA.

1. A genuine redundancy payment must be made in consequence of a termination of employment, the employee must be dismissed from employment, the dismissal must be caused by the redundancy of the employee's position and the payment must be made genuinely because of a redundancy.

1. It was agreed between parties, and accepted by the Tribunal, that the applicant was dismissed from employment as a result of his position being genuinely redundant at Firesafe and that the payment received by the applicant from Reddifund was in consequence of the termination of his employment. The dispute between parties lies in whether the amount of that payment exceeds the amount that could reasonably be expected to be received by the applicant in consequence of the voluntary termination of his employment at the time of the dismissal.

1. The applicant submits the payment made to him by Reddifund upon the termination of his employment from Firesafe in 2024 is a genuine redundancy payment and as such should be taxed accordingly. He was dismissed by his workplace as a result of his position being made redundant by his employer. The payment he received from Reddifund was made as a consequence of being genuinely redundant. The applicant referred to Taxation Ruling 2009/2 which outlines genuine redundancy payments exist to compensate for involuntary loss of employment, distinguishes between voluntary resignations or retirements and provides fair financial support to affected employees.
2. The applicant signed a statutory declaration in May 2024, confirming he had no offers of work at the time he made that declaration and therefore his position was genuinely redundant, leading to the payment. The applicant disagrees that the Reddifund entitlement is equivalent in both circumstances of voluntary resignation and genuine redundancy as to find they are equivalent would nullify the operation of any statutory test in relation to a genuine redundancy payment or indeed the intention of the fund itself.
3. It was submitted the relevant time to assess the amount that could reasonably be expected to be received by the applicant from Reddifund in consequence of a voluntary termination was the date of his dismissal, such date being 21 June 2024. At that time, he had received job offers. However, to receive a payment from Reddifund upon voluntarily resignation, a person must certify they have no further employment offers. Because the applicant had received such offers, he contends he would have been ineligible for a payment upon voluntary termination of his employment and would thus receive an amount of nil. Therefore, the payment he received as a consequence of the genuine redundancy exceeded the nil amount expected for voluntary termination of employment. The assertion that the applicant would have been able to access his funds at any time is speculative, noting such funds were specifically designed to safeguard against any question regarding genuine redundancies.
4. The applicant claims he was misinformed by the respondent and Reddifund in relation to whether this payment would be treated as a genuine redundancy. By not applying the tax free threshold to his payment, the applicant has suffered further detrimental consequences in relation to superannuation requirements, payment of the Medicare levy and a debt regarding childcare subsidy rebates due to inflated income for the 2023/2024 financial year.
5. He contends to find the payment not to be a genuine redundancy payment is inconsistent to how other taxpayers in similar circumstances are treated, namely those who contributed to other industry funds such as the Protect Fund. These other redundancy funds allow members to receive the tax free threshold on genuine redundancy payments, creating inconsistencies and unfairness between taxpayers in similar situations. He relied upon Protect Class Ruling 2025/16[2] and Incolink Class Ruling 2010/40[3] as evidence of the respondent's inconsistent approach. That class ruling applies to workers who receive severance payments from the Protect Severance scheme which are treated as genuine redundancy payments. The applicant considers the same findings of that ruling should be applied to his circumstances.
6. The applicant also considered the class ruling in relation to Reddifund[4] was outdated and not intended to determine the validity of a genuine redundancy payment. As the applicant never made a voluntary election to have Firesafe contribute to Reddifund, but rather was required to join upon entry into the industry and continue in that fund as his employment continued over time, it was outside his control as to where employer contributions were made and thus inequitable that his payments receive unfavourable taxation treatment.
7. The applicant referred to the Plumbing and Fire Sprinklers Award 2020, which specifies a redundant employee will receive severance/redundancy pay of 8 weeks for those with 4 years or more of continuous service, to be offset against contributions already made to a redundancy fund. He argued under this award an employee who voluntarily left would receive no pay, but one made redundant would receive 8 weeks' worth of severance pay. Under this scheme the amount he would receive from a redundancy exceeds the amount he would receive if he left his employment voluntarily and thus meets the criteria under the ITAA to apply the tax free threshold to such payment.

1. The respondent accepts the payment received by the applicant from Reddifund was in consequence of termination of his employment and that he was made genuinely redundant. However, the respondent does not accept the payment received was a genuine redundancy payment in accordance with the ITAA.
2. This position is based on the definition of 'redundant' in the Reddifund Deed which encompasses circumstances including voluntary redundancy and voluntary resignation, provided the employer has ceased to provide labour and has not been offered re-employment or rights to continue work with another participating employer. In these circumstances an employee is defined as redundant whether they were made redundant by their employer or voluntarily resigned and is therefore entitled to receive the full balance of their Reddifund member account.
3. The respondent notes the Firesafe EBA refers back to the Plumbing and Fire Sprinklers Award of 2020, which defines redundancy as '...a situation where an employee ceases to be employed by an employer other than for reasons of misconduct or refusal of duty...'. The respondent contends this means an employer who voluntarily resigns is considered redundant and thus able to receive monies from their Reddifund account.
4. The Commissioner contends that a genuine redundancy payment paid by Reddifund is equivalent to the amount payable upon voluntary resignation. Therefore, any payment received by the applicant does not exceed what he would have received had he resigned voluntarily and thus does not qualify as a genuine redundancy payment under section 83-175(1) of the ITAA.
5. In relation to the argument made by the applicant regarding a requirement to apply the circumstances as at the date of dismissal being the last day he worked at Firesafe on 21 June 2024, the respondent considered there were two pre-conditions to funds being released, namely that the applicant had ceased to provide labour and that he had no offer of employment. The release by the fund of the payment to the applicant was made based on the information provided as at the date of the statutory declaration on 29 May 2024, and therefore the factual circumstances as at that time are the relevant facts to consider when assessing why the payment was made and whether it is a genuine redundancy payment pursuant to the ITAA.

1. It is agreed by parties and accepted by the Tribunal that the payment received by the applicant meets all the other relevant requirements to be considered a genuine redundancy payment. The remaining question in determining whether the payment received by the applicant qualifies as a genuine redundancy payment pursuant to the ITAA, is whether the Tribunal is satisfied that the payment received exceeds the amount that could reasonably be expected to be received by him in consequence of the voluntary termination of his employment at the time of the dismissal.
2. The questions then for the Tribunal to consider is whether the applicant, if he had resigned voluntarily rather than been made redundant by Firesafe, would have reasonably expected to receive any payment from Reddifund at the time of the dismissal and if so, did the payment received upon being made redundant exceed the amount expected to be received in consequence of a voluntary termination.
3. To reiterate, the Plumbing and Fire Sprinklers Award 2020 and the EBA under which the applicant was employed provided for payments where an employee ceases to be employed, outlines calculations of redundancy or severance pay and require the payment of contributions by employees to redundancy funds. The Tribunal acknowledges if the applicant did not belong to Reddifund, he would be entitled to a redundancy payment under Part 8 of the relevant Award, however because the terms of the EBA required the employer Firesafe to contribute to a redundancy fund, any contributions paid from this account to the applicant will offset any calculation of redundancy payments pursuant to the Award.
4. The Reddifund Regulations at cl 4.1 outline when a person qualifies for a payment from the fund. Before any payment is made, a participating employee needs to satisfy the Trustee of the fund that they have ceased to provide their labour without being offered reemployment or other rights to provide their labour by their former employer or another participating employer.
5. A participating employee is defined as one who provides their labour to a participating employer in work covered by a Commonwealth or State Building Trades Award or another nominated industrial award associated with the building and construction industry, or as an employee of a participating organisation representing nominated unions or employer associations who are parties to the Deed. There is no dispute that the applicant and Firesafe met the definitions of participating employee and participating employer respectively.
6. The Reddifund Deed and Regulations contemplate payments of contributions in circumstances other than a genuine redundancy. Clause 4.1 provides for payments to an employee where they have died leaving a credit balance in their account. Clause 4.4 provides for a payment where an employee has worked for twelve months on a building project in clerical, managerial, administrative or supervisory roles when contributions were during a period where the employee provided labour in work that was not clerical or similar in nature. This payment is based on a finding that the employee has ceased providing non-clerical or like labour under a relevant building industry award.
7. The Tribunal finds, noting the Deed allows for payments in various situations where an employee has ceased employment, and in accordance with the definition provided for in the regulations, that an employee can be paid the balance in their fund account when the Trust is satisfied the employee is no longer working for a participating employer and has not been offered re-employment or other rights to provide their labour. A payment therefore can be made upon consequence of an employee's position being made redundant by the employer, or by the employee's own voluntary termination of employment, as long as the employee does not have an offer of re-employment or to provide labour to another participating employer.
8. Although there are a plethora of cases regarding the meaning of genuine redundancy, there are very few examples of the Courts considering the issue that is raised in these proceedings, in an effort to assist in determining whether the applicant could reasonably expect to receive an amount in consequence of the voluntary termination of his employment at the time of his dismissal. Senior Member Pascoe in the decision of Long and Commissioner of Taxation [2007] AATA 1269 (Long) briefly considered this question in relation to s 27F(a) of the Income Tax Assessment Act 1936 although in different circumstances to the present application. SM Pascoe noted the issue to be considered was:

...what notional or hypothetical eligible termination payment might be reasonably expected if there had been a voluntary retirement. Such a hypothesis must assume a voluntary retirement in circumstances where ongoing employment was available...

...Whether the employer may have made such a payment is not the question. The question must be whether the employee could reasonably expect that payment. [5]

1. Long dealt with employees who held dual roles within a company, the nature of a relationship not at arm's length for the purpose of determining whether a payment was a genuine redundancy payment and considered the former Act. SM Pascoe in that case considered the issue assuming circumstances where ongoing employment was available.
2. Taxation Ruling 2009/2 states, in relation to a calculation of the 'voluntary termination element' of a payment that:

Subsection 83-175(1) identifies the amount attributable to redundancy by deducting the amount that could reasonably be expected to be received by the employee if he or she had voluntarily terminated employment at the time of being dismissed....

Apart from this hypothetical change in circumstances to a voluntary termination instead of a dismissal caused by redundancy, all other circumstances surrounding the termination are assumed to be the same.

1. Class Ruling 2010/29 provides the respondent's view in relation to the taxation treatment of payments made to employees from Reddifund. This class ruling related to the WACIRF that subsequently became Reddifund. That ruling outlines contributions are paid to members if they meet a number of conditions in the Regulations, including:

19. Under subregulation 4.1 of the Fund Regulations, when the Trustee is satisfied a Participating Employee Member is no longer working for a Participating Employer, and has not been offered re-employment or other rights to provide his or her labour, that Participating Employee Member will be considered to be 'redundant' and the Trustee will pay them the balance in their account in the fund.

Such payments were considered to be in consequence of termination of employment and thus constitute an employment termination payment.

1. The Tribunal accepts the following facts in relation to the applicant's circumstances:

(a) The applicant was made redundant, being notified of this on 24 May 2024; > > (b) The applicant advised Reddifund on 29 May 2024 that he had been made redundant and had no other employment or offers to work in the same industry; > > (c) The applicant received at least one offer of employment with a participating employer on or after 12 June 2024, which he did not advise to Reddifund; and > > (d) The applicant was paid the balance of his Reddifund account on 25 June 2024.

2. The Tribunal considers the actual circumstances as at the time the payment was made should be taken into account when determining whether the payment made can be considered a genuine redundancy payment, rather than adopting the assumption posed in Long. Although a hypothetical change in circumstances from a dismissal to a voluntary termination must be considered, the Tribunal considers all other circumstances surrounding the termination should be assumed to be the same. This is especially so in light of the terms of the Deed under which the payment is made, as offers of employment are a crucial factor in the determination of whether any payment from the fund should be made. Thus, it is not appropriate in the circumstances of the current case to make the assumption made in Long that ongoing employment is available.
3. However, it is the view of this Tribunal that Long is of assistance for the current proceedings, in that it is agreed the question to be answered is not whether Reddifund may have made such a payment to the applicant, but whether the applicant could reasonably expect payment upon voluntary termination of employment.
4. The applicant was paid his entitlements from the fund on 25 June 2025 as the Trustee was satisfied he was no longer working for a Participating Employer and had not been offered re-employment or other rights to provide his labour and as such he met the definition of redundant. These were the circumstances of which the applicant advised Reddifund, and the circumstances upon which he was entitled to the payment.
5. If these circumstances were otherwise equal, namely that he advised Reddifund that he was no longer working for a participating employer due to his voluntary termination of employment and had not been offered re-employment or other rights to provide his labour, it is reasonable to expect Reddifund would have made the same payment from the applicant's account balance to the applicant as to what he received because his position was made redundant.
6. The applicant submits the above situation was not factually correct at the time of the dismissal. He had received an offer of employment from a participating employer in June 2024 before his last day of work with Firesafe on 21 June 2024. The applicant urged the Tribunal to consider the facts as they stood at the time of the dismissal, being as at 21 June 2024 when he did have another offer of employment. He submitted in this circumstance he would not have been eligible for a payment upon voluntary termination as the offer of further employment would have disentitled him to any payment under the terms of the Deed. As such, the applicant claims he could not have reasonably expected to receive a payment from Reddifund if he had voluntarily terminated his employment. Therefore the payment he did receive was in excess of what he could reasonably be expected to have received as a consequence of a voluntary termination of employment.
7. The difficulty with this submission is that the applicant did not advise Reddifund of this offer of employment. Had he done so, according to the Deed, he would not have been entitled to any payment from the fund, either as a consequence of a genuine redundancy or a voluntary resignation because of the job offers available to him. Reddifund based their decision to pay the applicant on the statutory declaration made in May 2024 that he had no further offers of employment.
8. The respondent urged the Tribunal to ask the question '...why was the payment made to the applicant...'. The respondent submitted the answer to this question was that the applicant swore in a statutory declaration he had been made redundant by his employer, that he was currently unemployed and had no offer of re-employment pending in the building industry. On the basis of this information, regardless of how he ceased to be employed, whether by redundancy or through voluntary resignation, he would have expected to receive the payment from Reddifund in the amount that he did.
9. At the time the payment was made to him on 25 June 2024, the applicant had not taken up employment. He had not sought to advise Reddifund of the employment offers he had received. Given this set of circumstances, if the only change made is to whether he voluntarily resigned or was genuinely made redundant, the Tribunal finds it is reasonable to expect the fund would have made a payment to him in the event of a voluntary termination of his employment as they had no knowledge of any other set of facts upon which to base their payment on.
10. He did not receive an offer of employment until after he presented his factual background to Reddifund upon which they made their payment. It would be an artificial exercise to not have expected a payment from Reddifund in the circumstance that they knew he had other offers of employment, as this is not what occurred in reality. Reddifund were not made aware of those other offers that would have changed the applicant's eligibility for any payment from the fund, including an eligibility upon a genuine redundancy.
11. Given the above reasons, the Tribunal finds the applicant could reasonably have expected to receive the same amount in payment from Reddifund in consequence of a voluntary termination of his employment as that which he received due to his position becoming genuinely redundant. The Tribunal is therefore not satisfied the payment made to the applicant by Reddifund is a genuine redundancy payment as it does not exceed the amount that could reasonably be expected to be received by the employee in consequence of the voluntary termination of his employment at the time of the dismissal.
12. The applicant raised a number of other submissions as to why he considered the objection decision was wrong. He claimed he had been misinformed by the respondent when he called them for advice in January 2024. The Tribunal makes no finding as to whether he was provided incorrect advice as a result of his telephone contact with officers from the Australian Taxation Office, but notes that any such advice would not lead to a different set of facts as outlined above and the analysis applied therein by the Tribunal. He also claimed he received poor advice from Reddifund, although the information provided in evidence by the applicant outlines Reddifund advised the applicant any payment would be considered an ETP.
13. The applicant also referred to other class rulings in relation to the Protect Severance Scheme and Incolink Funds, highlighting the inconsistent treatment of members of those funds as opposed to himself as a member of Reddifund. The applicant is correct in noting that payments received from the Protect Severance scheme can be considered genuine redundancy payments pursuant to the ITAA and therefore taxed favourably. However, the ruling is based on terms different to those in the Reddifund Deed and an assumption the deed governing that particular scheme does not entitle workers to payments upon the voluntary termination of their employment (other than those entitlements in lieu of notice periods or accrued unpaid benefits). The nature of this Protect fund is therefore set up in a way that is different to Reddifund and accordingly is treated differently as a result.
14. The Incolink class ruling does not support the applicant's contention that employees belonging to other industry funds are being treated more favourably than himself, as the ruling makes clear that most payments under the Incolink fund will not be considered genuine redundancies for the reason that such payments do not exceed the amount that could reasonably be expected to be received from the fund in consequence of a voluntary termination of employment at the time of dismissal.

1. The applicant has not discharged his burden of proving the 2024 assessment was excessive or otherwise incorrect. As the Tribunal has found the payment received by the applicant from Reddifund does not qualify as a genuine redundancy payment, the decision under review is affirmed.

[1] Taxation Administration Act 1953 (Cth) s 14ZZK ('TAA').

[2] Class Ruling 2025/16 - The Trustee for Protect Severance Scheme No 2 - workers in receipt of severance payments.

[3] Class Ruling 2010/40 - Income tax: payments from Redundancy Payment Central Fund No 2 and Redundancy Payment Approved Worker Entitlement Fund 2 (Incolink).

[4] Class Ruling 2010/29 - Income tax: employment termination payment: WA Construction Industry Redundancy (No 2) Fund.