Superannuation updating

What is super

Super is a long-term investment designed to to help you for your retirement. For most working Australians, it’s compulsory for your employer to make contributions to your super on your behalf - these are called Superannuation Guarantee (SG) contributions. It’s also a tax-effective way to save for retirement.

How to choose

You can generally choose which super fund you would like your SG contributions paid into. Check with your employer or visit ATO website for more information

How to contribute

There are different types of super contributions, including employer contributions, personal contributions and government co-contributions (also called ‘super co-contributions’) Different types of contributions are taxed in different ways. There are caps on the amount you can contribute in a financial year. If you go over these caps you may have to pay extra tax

Contributions from your employer

Under current Superannuation Guarantee (SG) legislation, employers in Australia are generally required to contribute an amount to their employees’ super that’s equal to at least 10.5% of their wages or salary

SG contributions are usually taxed within the Fund at a rate of 15% as they’re paid into your super account

Contributions from yourself

You can contribute more money to your super in several ways. The different types
of contributions generally fall into two categories: before-tax or after-tax

	Before-tax contributions (also called concessional contributions)	After-tax contributions (also callednon-concessional contributions)
What are they	Super contributions that have been made before your income tax has been calculated (up to the contribution cap of $27,500 a year), or, after-tax contributions for which you claim a tax deduction	Super contributions taken from your ‘take-home’ pay after income-tax has already been deducted (Up to the contributions cap of $110,000 a year, are tax-free)
When they’re taxed	Generally taxed at 15% when they’re received by your super fund	Generally not taxed when they’re received by your super fund
Examples	• Salary sacrifice contributions • Personal deductible contributions • Employer SG contributions	• Personal after-tax contributions • Spouse contributions

Government co-contributions

Government co-contributions (also known as ‘super co-contributions’) are designed to help people on lower incomes boost their super savings. To qualify, you need to make a personal
after-tax contribution to your super before the end of the financial year

Then, providing you meet the other eligibility requirements, the government will contribute an additional 0.50 to your super for every dollar of after-tax contribution you’ve made up to a maximum co-contribution amount of $500

Spouse contributions

Your spouse may be able to make an after-tax contribution into your super account on your behalf, subject to eligibility requirements. Any spouse contributions made into your account count towards the non-concessional (after-tax) contribution cap.

Spouse contributions made on behalf of a low-income spouse may be eligible for a tax offset of up to $540. This is why spouse contributions are sometimes used by couples as a way to help reduce the tax they pay

First Home Super Saver Scheme

The First Home Super Saver Scheme (FHSS Scheme) is a government scheme intended to help first home buyers save money for their first home within their super fund. You can make personal deductible (before tax) and personal after-tax contributions into your super fund to save for your first home. You can then apply to release these personal contributions, along with associated earnings, to help you purchase your first home. You can apply to have a maximum of 15,000 of your personal after-tax contributions from any one financial year included in your eligible contributions to be released under the FHSS Scheme, up to a total of $50,000 contributions across all years. You’ll also receive the earnings on those contributions.

Accessing your super

When you can access your super

• You retire permanently from the workforce on or after reaching your preservation age
• You reach your preservation age and start a transition to retirement income stream
• You leave paid employment on or after reaching age 60
• You reach age 65 (even if you’re still working).

1 July 1964 or later the preservation age is 60

If you leave Australia

If you’ve worked in Australia as a temporary resident, you may be able to claim your super under the government’s departing Australia superannuation payment scheme once you depart Australia. Your temporary visa must have expired (or have been cancelled), and you must have left Australia permanently (taxed at 35%).