Australian Government Directory of Services for Older People 2012-2013
Superannuation
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Superannuation, or ‘super’, is a specially designed long-term investment method for building retirement savings. While there are other ways of saving for retirement, super is different because it has a compulsory element, is taxed at reduced rates and is not usually available until you retire.
At a glance
The super system has changed in recent years. Below are some key considerations to help you make the most of your retirement savings.- Super benefits are tax-free if paid from a taxed source and you are aged 60 or over.
- Make sure your super fund has your Tax File Number. If it doesn’t, you may be charged a higher tax on contributions and your fund may not accept some types of contributions.
- You can keep your savings in super indefinitely - there are no compulsory cashing out rules.
- If you choose to take an income stream (or pension) from your fund, you must withdraw a minimum amount each year based on your age and your account balance.
- Employment termination payments cannot be rolled over into super.
- Transition to retirement income stream payments in a year must be less than 10 per cent of your super account balance (at the beginning of the financial year).
- You cannot take a lump sum payment under transition to retirement.
- Changes to the government pension asset test taper rate effective from 20 September 2007 mean you could be eligible for Australian Government pensions such as the Age Pension.
Accessing superannuation
Rules have been established to ensure that super is kept for retirement and not for other purposes. Generally, you must meet a condition of release before your super fund can pay you a benefit. Your fund can only pay benefits if the fund’s rules allow it. Reaching preservation age and retiring from the workforce, or reaching age 65, are the most common examples of conditions of release.Even if you have met a condition of release, it is not compulsory to access your super benefits. Super benefits do not have to be cashed unless you die.
Super benefits can be taken as a lump sum or in the form of an income stream (pension). If you choose to take an income stream from your fund, you must withdraw a minimum amount each year based on your age and your account balance.
If you are 55 and over, you have the option of easing into retirement under the ‘transition to retirement’ measures. You can reduce your working hours - without reducing your income - by topping up your reduced income with a regular income stream from your superannuation savings.
These transition to retirement measures only allow you to access superannuation benefits as a non-commutable income stream, not a lump sum. This means you must take your superannuation benefits as income stream payments until you formally retire. Transition to retirement income stream payments in a year must be less than 10 per cent of your super account balance (at the beginning of the financial year).
It is not compulsory for superannuation funds to offer non-commutable income streams. You will need to ask your fund whether they offer these income streams. You may also need to seek financial advice.
For more information on accessing your benefits and conditions of release, contact the Australian Taxation Office.
Phone: 13 10 20 (ATO Super enquiries)
13 36 77 (TTY)
Website: Australian Taxation Office at www.ato.gov.au/super
ComSuper (Commonwealth Superannuation Administration)
ComSuper is an Australian Government agency responsible for administering the major superannuation schemes available to Australian Government employees and Australian Defence Force members.ComSuper provides superannuation administration services under authority from the Commonwealth Superannuation Corporation (CSC) for the Commonwealth Superannuation Scheme (CSS), Public Sector Superannuation (PSS) scheme, 1922 and Papua New Guinea (PNG) schemes, Military Superannuation and Benefits (MilitarySuper) scheme and the Defence Force Retirement and Death Benefits (DFRDB) scheme.
These schemes are amongst the largest and most complex occupational superannuation schemes in Australia. They have a combined membership of over 680,000 contributors, pensioners and preserved benefit members. Details of scheme membership and other statistical information can be obtained from the respective schemes’ annual reports and the Commissioner for Superannuation’s annual report to parliament.
ComSuper provides superannuation administration services including:
- collecting member contributions and maintenance of member accounts
- paying lump sum and pension benefits
- member communications
- accounting services
- dispute resolution
- secretariat support functions.
Superannuation policy for Australian Defence Force members is the responsibility of the Superannuation Section in the Department of Defence.
On behalf of CSC, ComSuper publishes a series of forms, fact sheets and books. These are available online on the schemes’ websites. You can find links to these publications and websites on the ComSuper website, ComSuper at www.comsuper.gov.au
The various schemes’ websites also provide a range of online services to help members manage their superannuation. These include:
- using the i-Estimator to project a potential final benefit
- changing contact details
- viewing and printing annual member statements
- changing an access number.
1300 001 777 (CSS and PSS pensioners)
1300 000 377 (PSS members)
1300 001 677 (DFRDB members)
1300 001 877 (DFRDB pensioners)
1300 006 727 (MilitarySuper members)
1300 001 877 (MilitarySuper pensioners)
1300 000 177 (1922 and PNG scheme members)
(02) 6272 9000 (ComSuper switchboard)
(02) 6272 9827 (TTY)
Email: Members at CSS
Pensions at CSS
Members at PSS
Pensions at PSS
Members at DFRDB
Pensions at DFRDB
Members at MilitarySuper
Pensions at MilitarySuper
Enquiries at ComSuper
Website: Australian Taxation Office at www.ato.gov.au/super
Postal: ComSuper
GPO Box 2252
Canberra ACT 2601
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Contributing to super
Generally, the super laws tell your super fund what contributions they can and cannot accept from you (or someone on your behalf).Whether a super fund can accept contributions for you will depend on the type of contributions, your age and whether you have quoted your Tax File Number (TFN) to the fund.
There are age-based rules for the types of contributions your fund is allowed to accept. For example, if you are aged under 65, your super fund can accept all contributions made for a member under 65. However, if the contributions are for someone aged 65 to 75 inclusive, there are rules about what types of contributions a fund is allowed to accept.
You need to give your fund trustee your TFN for super purposes, or it will not be able to accept member contributions.
Phone: 13 10 20 (ATO Super enquiries)
13 36 77 (TTY)
Website: Australian Taxation Office at www.ato.gov.au/super
Contribution caps
Caps apply to contributions made to your super in a financial year. Any contributions over a contributions cap are subject to extra tax called excess contributions tax. This tax is paid by the individual.
Whether you are liable for excess contributions tax will depend upon the amount of contributions made, your age and whether the contributions are:
Concessional - which broadly covers super guarantee, insurance premiums paid to a super fund for you, salary sacrificed amounts and any amount allowed as a personal super deduction in your income tax return. The concessional contributions cap for 2010, 2011 and 2012 is $25,000 for people aged less than 50. For people aged 50 or more, the contributions cap for 2010, 2011 and 2012 is $50,000. Concessional contributions over the cap are taxed at 31.5 per cent in addition to the 15 per cent already taxed in the fund.
Non-concessional - which are generally personal contributions made to a super fund from after-tax income, and other contributions that are not subject to tax in the super fund. They also include excess concessional contributions. The non-concessional contributions cap is $150,000 per year. People aged less than 65 can bring forward two years of non-concessional contributions. These people can contribute up to $450,000 over a three-year period without exceeding the non-concessional contributions cap. Excess non-concessional contributions are taxed at 46.5 per cent.
Phone: 13 10 20 (ATO Super enquiries)
13 36 77 (TTY)
Website: Australian Taxation Office at www.ato.gov.au/superseeker
Finding lost super using SuperSeeker
Super can become ‘lost’ if you’ve ever changed your name, address or job; or have not had any contributions paid into your account for five years or more.
To find lost super, follow the prompts on SuperSeeker to complete the transfer request. You can send this request electronically to your fund, or you can print the pre-filled transfer form and post it to your fund. If you find any lost super it is up to you to initiate the transfer of accounts - and your fund may ask you for more information or proof of identity before it transfers the account.
If the balance of your lost super account is less than $200, you may be able to withdraw it tax-free, regardless of your age.
Phone: 13 10 20 (ATO Super enquiries)
13 36 77 (TTY)
Website: Australian Taxation Office at www.ato.gov.au/superseeker
Check for unclaimed super
Unclaimed super is different from lost super. This is money that the super fund pays to the ATO or a state or territory authority in certain situations when they are unable to contact you.
You may have unclaimed super if your super fund can’t contact you and:
- you are aged 65 or older
- an agreement or court order requires a member to split their super interest with you (as the non-member spouse)
- you are the beneficiary of a deceased member’s super benefit
- you are a former temporary resident whose visa has expired, and have not lived in Australia for more than six months
- you have a lost member account:
- with a balance of less than $200 (small lost member account) or
- that is inactive and unidentifiable (insoluble lost member account).
13 36 77 (TTY)
13 10 20 (ATO Super enquiries)
Website: Australian Taxation Office at www.ato.gov.au/superseeker
Help with superannuation
The Superannuation Complaints Tribunal is an independent dispute resolution body which deals with a diverse range of superannuation-related complaints and offers a free, user-friendly alternative to the court system.
The Tribunal deals with complaints relating to decisions and conduct of trustees, insurers and other decision-makers regarding regulated superannuation funds, approved deposit funds, annuities, life policy funds and Retirement Savings Accounts.
The Tribunal cannot deal with your complaint until you have complained to your fund.
Phone: 1300 884 114 (Inquiries and Complaints)
Website: Superannuation Complaints Tribunal at www.sct.gov.au
Super co-contributions
The super co-contribution is a helping hand from the Australian Government to assist eligible individuals to save for their retirement.
If you are eligible and make personal super contributions to a complying super fund or Retirement Savings Account, the Government will match your contribution dollar for dollar with a co-contribution up to a maximum.
Are you eligible for the super co-contribution?
You will be eligible for the super co-contribution if all of the following apply:
- you made personal superannuation contributions by 30 June of a particular financial year, to a complying superannuation fund or retirement savings account and don’t claim a deduction for all of it
- your total income (assessable income, reportable fringe benefits and reportable employer super contributions) less any business deductions is below the higher income threshold
- ten per cent or more of your total income (assessable income, reportable fringe benefits and reportable employer super contributions) is from eligible employment, running a business or a combination of both
- you do not hold an eligible temporary resident visa at any time during the year, unless you are a New Zealand citizen or holder of a prescribed visa
- you lodged an income tax return for a financial year you made personal superannuation contributions
- you were less than 71 years old at the end of the financial year.
If you made eligible personal super contributions in a particular financial year, and you lodge an income tax return and meet the other eligibility requirements, the ATO will calculate and pay you a super co-contribution.
1. If your total income (assessable income, reportable fringe benefits and reportable employer super contributions) less any business deductions is between the higher and lower income thresholds, your entitlement will be subject to a sliding scale. Your co-contribution will reduce, phasing out at the higher income threshold.
Check the ATO website for information about income thresholds and the value of the co-contribution.
Phone: 13 10 20 (Australian Taxation Office Super enquiries)
13 36 77 (TTY)
Website: Australian Taxation Office at www.ato.gov.au/boostmysuper
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Super tips in your 50s
If you plan to retire in the next 10 to 15 years, you may need to focus more on your super.Consider making extra contributions and reviewing your investment strategy. Be aware that if you make contributions greater than the super contributions caps, you will have to pay extra tax.
Super tips in your 60s
From age 65, most people have unrestricted access to their super. However, your investment options remain very important to ensure you have enough money to last throughout your retirement years.If you are over 65, you may have unclaimed super that has been paid to us or to a state or territory authority. You can check this by visiting Australian Tax Office at www.ato.gov.au/superseeker or speaking with your state or territory authority.
Super tips in your 70s
You can make contributions to your super until you turn 75, as long as you work at least 40 hours on 30 consecutive days in the financial year.Your employer can claim a tax deduction for before-tax contributions until you turn 75. You should also check your listed beneficiaries with your super fund.
Website: Australian Taxation Office at www.ato.gov.au/super
Self-managed super funds
Self-managed super funds (SMSFs) work like any other super fund, but the responsibility of managing it rests solely with the trustee or trustees (you).Establishing and operating an SMSF is a major financial decision. After all, with this type of fund you’re both a member and a trustee. This means you have control over and responsibility for the fund’s operation, including its investment decisions.
Complying SMSFs receive tax concessions like any other super fund. Concessional contributions made to SMSFs are taxed at 15 per cent.
There is a range of advisers and professionals who can help you. You should discuss your personal circumstances with a qualified professional before deciding whether an SMSF is right for you.
For more information on self-managed super funds visit the ATO’s SMSF website or refer to the Thinking about self-managed super booklet (NAT 72579; also available for download via the website).
Phone: 13 28 65 (ATO personal self-help)
13 36 77 (TTY)
13 10 20 (ATO Super enquiries)
Website: Australian Taxation Office at www.ato.gov.au/smsf
Splitting super contributions
Concessional contributions made by you, or on your behalf, can be split between you and your spouse.This is a voluntary service, so you will need to contact your super fund to ask whether they offer super contributions splitting.
To be eligible to split your super contributions, your spouse must not have reached their preservation age; or if they have, they must be aged between their relevant preservation age and age 65, but not retired from the workforce.
The maximum amount that can be split for a financial year is 85 per cent of the amount of concessional contributions made to your super fund in that financial year.
If you split your contributions with your spouse, the full amount of the original contributions counts towards your concessional contributions cap.
Taxation of super benefits
Super benefits (lump sums and income streams) paid from a taxed super fund to people aged 60 or more are tax-free. Super benefits from taxed super funds paid to people aged 60 or more are not included as assessable income.If you are over your preservation age (currently 55), but under 60, any super benefits you receive from a taxed super fund are included as assessable income. However, you are entitled to a 15 per cent tax offset on the taxable component of any super income stream payments you receive. Lump sums received from a taxed super fund are tax-free up to the low rate cap amount. The low rate cap amount for the 2012–13 income year is $175,000. Any amount over the low rate cap is taxed at 15 per cent.
Super income streams paid from untaxed sources such as some public sector funds are included in your assessable income regardless of your age. If you are 60 or more, you are entitled to a 10 per cent tax offset on the untaxed element of any super income stream payments you receive.
Super lump sums paid from an untaxed super fund are also included in your assessable income. If you are aged 60 or more, the taxable component will generally be taxed at a rate of 15 per cent up to the untaxed plan cap amount ($1.255 million for the 2012–13 income year). If you are over your preservation age but under age 60, lump sums from an untaxed super fund will be taxed at 15 per cent up to the low rate cap amount. The low rate cap for the 2012–13 income year is $175,000. Amounts above the low rate cap amount up to the untaxed plan cap limit are taxed at 30 per cent. Amounts above the untaxed plan cap are taxed at 45 per cent.
All death benefit super lump sums are tax-free if paid to a dependant of the deceased. A dependant includes a spouse (whether of the same sex or of a different sex) the deceased person’s child and any other person who had an interdependency relationship with the deceased.
A child will qualify as a dependant if they:
- are under 18 years old
- are 18 or over but less than 25, and financially dependent on the member
- are 18 or over and have a disability.
Super lump sums are also tax-free when paid to a person with a terminal medical condition, regardless of their age. This applies where two medical practitioners certify that there is a reasonable expectation of death within 12 months.
Tax offsets for spouse contributions
Taxpayers may be able to claim an 18 per cent tax offset for super contributions of up to $3000 made on behalf of their low income or non-working spouse.The maximum tax offset allowable is $540.
You may be entitled to this tax offset if:
- he or she was your spouse when you made the contributions
- you did not and cannot claim a tax deduction for the contributions
- both you and your spouse were Australian residents when the contributions were made
- at the time of making the contributions, you and your spouse were not living separately and apart on a permanent basis
- the sum of your spouse’s assessable income, reportable fringe benefits and reportable employer super contributions for the financial year was less than $13,800
- your spouse is under age 70 at the time the contribution is made. If your spouse is aged from 65 to 69 at the time of the contribution, he or she must have been gainfully employed on at least a part-time basis
- the contribution is made to a complying super fund for the income year of the fund in which you make the contribution.
Phone: 13 10 20 (Australian Taxation Office Super Infoline)
Website: Australian Taxation Office at www.ato.gov.au/super
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Transferring your super to one account
If you have more than one super account, you may want to consider combining them into one super fund so you pay only one set of fees. It also means you can keep track of your money more easily.Ask your super fund if there are any fees or charges for, or benefits affected by, transferring your money to another fund before you make the decision to do so. The ATO also recommends that you speak with a qualified financial adviser before making any decisions about your super.
You can choose to transfer (roll over) your super at any time, with some limited exceptions. If you do so, your old super fund has 30 days to make the transfer. The 30-day period starts once you’ve provided all the required information to your fund.
The Request to transfer whole balance of super benefits between funds form (NAT 71223) allows you to request a transfer of your whole super balance from one fund to another, including a self-managed super fund.
Phone: 13 10 20 (Australian Taxation Office Super Infoline)
Website: Australian Taxation Office at www.ato.gov.au/super