New Commonwealth Government rules, effective 1 July 2007, have changed the treatment of payments made on termination of employment. One change is to stop Employment Termination Payments (ETPs), including a voluntary redundancy payment, being rolled over into a superannuation fund. Transitional rules allow ETPs made between 1 July 2007 and 30 June 2012 to be rolled over to a superannuation fund if the employee was entitled, as at 9 May 2006, to the payment specified under:  a written contract, an Australian or foreign law, or a workplace agreement under the Workplace Relations Act 1996 Redundancy payments made to most NSW public sector employees are made in accordance with Premier's Memorandum 97-27.  The Department of Premier and Cabinet is currently seeking a tax ruling for these payments to be transitional ETPs. In the interim, employers may defer making a voluntary redundancy payment until the outcome of the tax ruling is known, provided that employees agree in writing to the deferral. The written agreement must include the employee's acknowledgement that there will be no additional payments for any foregone interest during the deferral period. Under the new rules, ETPs must be paid within 12 months of the termination. Where an ETP is deferred, both the taxable and any tax exempt components of the ETP must be deferred. Any part of a redundancy payment that is for unused leave, or is the tax free amount of a bona fide redundancy payment ($7,020 plus $3,511 per year of service in 2007/08) is not an ETP and should not be deferred. A further Circular will be issued when the tax ruling has been made. A S SmithActing Director General Issued : Workforce Policy and Advice ( Public Employment Office)Contact: Robyn Parnell, Senior AdviserEMail:  [email protected] no: 9228 4152   or 9228 3929  Facsimile:    92283622 File no: PSM/08528-01Date:  13 July 2007This circular has not superseded any other Memorandum/Circular