What this ruling covers
The Australian Taxation Office has issued Class Ruling CR 2026/48. The ruling sets out the income tax rules that apply to payments made by ACIRT Pty Limited - the trustee of the Australian Construction Industry Redundancy Trust - to construction workers when their employment ends.
The ruling applies from 1 July 2025 to 30 June 2029.
Background on ACIRT
ACIRT was established on 10 October 1994. Its trust deed was last amended on 29 August 2024. ACIRT only pays benefits under its Trust Deed - entitlements outside the Trust Deed are not paid by ACIRT.
Two categories of members
The ruling covers two types of ACIRT members:
- ETP Members
- Genuine Redundancy Account (GRA) Members
How payments are taxed
Most payments from ACIRT are taxed as Employment Termination Payments (ETPs).
An exception applies for GRA Members. Where a GRA Member is under pension age and is genuinely made redundant, the portion of their payment that falls under the cap calculated using the formula in subsection 83-170(3) of the Income Tax Assessment Act 1997 is not taxed as an ETP. That portion is instead taxed as a genuine redundancy payment, which carries more favourable tax treatment. The portion of the payment that exceeds the cap is taxed as an ETP.
Employer contributions under the Award
Participating employers in the building and construction industry are required to make weekly contributions to ACIRT under clause 41.4 of the Building and Construction General On-site Award 2020, or under relevant enterprise bargaining agreements.
The Award provides no direct redundancy entitlement to employees where the employer contributes to a redundancy fund such as ACIRT. Entitlements are determined solely by the ACIRT Trust Deed.
Key actions
- Employers covered by the Building and Construction General On-site Award 2020 who contribute to ACIRT are required to ensure weekly contributions are being made correctly - the ruling confirms these contributions offset legislative redundancy obligations.
- When processing a termination for a construction worker who is a GRA Member under pension age due to genuine redundancy, the ruling requires identifying whether the payment falls under or over the cap in subsection 83-170(3) of the Income Tax Assessment Act 1997, as the tax treatment differs for each portion.
- Because ACIRT only pays benefits under its Trust Deed, any award or enterprise bargaining agreement entitlements outside the Trust Deed remain the employer's obligation to check and fulfil.
- The full ruling is available at https://www.ato.gov.au/law/view/document?docid=CLR/CR202648/NAT/ATO/00001 to confirm how it applies to specific workers and their member classification.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.