What is money paid to a former spouse called?

Alimony
Alimony, also called spousal support or spousal maintenance, is the payment of money by one spouse to the other after separation or divorce. Its purpose is to help the lower-earning spouse cover expenses and maintain the same standard of living after divorce.

What is lump sum spousal support?

Lump sum alimony refers to a spouse fulfilling his or her entire alimony obligation at once, with a single lump sum payment. It is an alternative to paying a spouse monthly for spousal support. In most cases, lump sum alimony will be an option if the paying spouse would prefer to do it this way.

When did lump sum benefits come into effect?

The new tax dispensation which applies to any retirement fund lump sum benefit (RLB) came into effect from 1 October 2007 while the new tax dispensation applying to retirement fund lump sum withdrawal benefits (RLWB) is effective from 1 March 2009.

When does a lump sum pension become income?

A lump sum benefit does not include any amount deemed to be income accrued to a person in terms of section 7(11) of the Act, namely a deduction from the minimum individual reserve in terms of section 37D of the Pension Funds Act, No. 24 of 1956 (PFA).

When do lump sum benefits accrue on death?

It is proposed that lump sum benefits derived in consequence of the commutation of an annuity (or part thereof) be included. Lump sum benefits payable on the death of a person are generally deemed to accrue to that person immediately prior to his death. Paragraph 5 sets out the allowable deductions, namely –

Why are lump sum benefits taxed the same as RLB?

The reason is that any lump sum benefit received on retrenchment will be subject to the same tax dispensation as a RLB, i.e. the R300,000 exemption will apply. The same tax dispensation applies to employer provided severance packages as a result of age, illness, accident, injury or mental incapacity.