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Invalidity retirement for CSS and PSS members over age limits

We’re not required to issue an invalidity retirement certificate (IRC) to members who are medically retiring over certain age limits:

  • CSS members 65 and over 
  • PSS members 60 and over

If you’re medically retiring your employee over these ages, you don’t need to ask us for an IRC. Invalidity retirement over these ages result in different benefit options being available, compared to the typical invalidity retirement process. 

Once your employee over the above age limits has been medically retired, they’ll need to complete the Age retirement benefit application form (which has the benefit options which are available in their situation) and submit it along with their cessation certificate and medical reports to Your payroll team will also need to complete a departmental report.

Why we need medical reports

If your employee is under 65 and can provide us with evidence that they meet the ATO requirements for invalidity benefits, we may be able to apply alternative tax treatment to any lump sum benefit. We’ll need their cessation certificate and at least two medical reports certified by legally qualified medical practitioners to apply this tax treatment.

What your cessation certificate needs to include

Your employee’s cessation certificate should include: 

  • their name
  • the date their employment was terminated
  • the legislative provision their employment was terminated under 
    • e.g. subsection 29(3)(d) of the Public Service Act 1999 for APS employees
  • the signature of the person authorising the termination.

The medical reports should address whether your employee is totally and permanently incapacitated and should explain their condition(s). There’s no need for an independent medical report –reports can be from legally qualified medical practitioners treating your employee (e.g. a specialist and general practitioner). 

Employees with a terminal medical condition

If your employee has a terminal medical condition with a life expectancy of less than 24 months, any lump sum benefit can be paid tax free if we’re provided with evidence from two registered medical practitioners who have certified, jointly or separately, that your employee suffers from an illness or injury that is likely to result in their death within 24 months of the date of certification. 

At least one of the registered medical practitioners must be a specialist practicing in an area related to your employee’s illness or injury, and both of the medical reports must be within their certification period. The certification period is 24 months from the date of certification. 

Any super balance remaining after the certification period ends can be accessed by your employee at any time, but may not be tax-free. Benefits that accrue after the certification period aren’t eligible for tax free payments under the previous assessment and may require new evidence.

For more information, check out the ATO’s website.


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