Superannuation funds will be allowed to claim a percentage of certain total and permanent disability (TPD) premiums as tax deductions.

The actual percentage of deductions will be determined after consultation with the financial services industry.

The Federal Government is introducing an amendment to the tax laws to allow the deduction to be claimed from the next financial year.

Assistant Treasurer Bill Shorten says the changes will make it easier for superannuation funds to claim the deduction.

“The provision of insurance through superannuation has ensured many Australians now have insurance cover in the event of a total and permanent disability,” he said.

“These changes will give many superannuation funds the option of using a simpler method to determine the deductible portion of TPD insurance premiums without having to engage an actuary.”

The TPD policy must meet the disability superannuation benefit description in the Income Tax Assessment Act 1997.

If wider insurance cover is provided, the funds will be required to obtain an actuary’s certificate to determine the deductable proportion of the premium unless specified in the policy.

Last year the Government introduced transitional provisions to cover these deductions and these will now expire on June 30.

“The Government has responded to industry’s concerns about the difficulties it will face in complying with the law once the current transitional relief expires,” Mr Shorten said.