“The team have been receiving more and more adviser queries around deductibility, so we’ve prepared some information and examples to support you.”

 

Ben has been advocating for advisers to consider reviewing their fee models with a view to building in an upfront 'insurance engagement fee' as compensation to the practice for the work involved in preparing and submitting an insurance application.  He notes that TD2024/7 - the Tax Determination that outlines the legislative basis out of which upfront plan fees are partially deductible is retrospective, and has application for upfront insurance engagement/plan fees.

 

This sample fee invoice template, and worked examples are designed to assist advisers reviewing their model. It recommends to reconcile any changes you make with your licensee policies and guidelines for completeness.

Ben also asks ‘Do you simply gross up the sum insured on a Super-owned TPD policy by 22%? 

 

If so, he believes it may result in over-insurance and unnecessary erosion on super balances.

 

The reason being it ignores the TPD Tax Free uplift calculation that trustees are required by law to undertake before paying the lump sum proceeds to the client or indeed rolling the capital over to another super fund.

 

To review these figures, you can use the TECE Team’s Super Life/TPD Tax calculator and Tax Guide which has been updated for 2025/26.

The AIA TECE (Technical and Education Centre of Excellence) team brings expertise in insurance, tax, superannuation, and regulatory frameworks. They’re available to help advisers navigate advice challenges and questions which may arise.

If you have questions or need tailored technical support, contact the team directly at tece@aia.com.