The following information on taxation issues is a brief summary and does not take into account your personal circumstances. You may wish to contact the Australian Tax Office (ATO) Superannuation Help Line on 13 10 20 for more detailed information, particularly if you are considering withdrawing money from AvSuper
Provision of your Tax File Number (TFN)
It is not an offence not to quote your TFN to AvSuper. However, giving your TFN to us will have the following advantages (which may not otherwise apply):
- we will be able to accept all types of contributions to your account/s
- your contributions won’t be taxed at higher rates
- other than the tax that may ordinarily apply, no additional tax will be deducted when you start drawing down your superannuation benefits; and
- it will be much easier to trace different superannuation accounts in your name so that you receive all your superannuation benefits when you retire.
If your employer is paying contributions to us and you have given them your TFN, they must supply it to us within 14 days. You can give us your TFN by completing our TFN notification form or by calling us on1800 805 088.
Under the Superannuation Industry (Supervision) Act 1993, AvSuper is authorised to collect your TFN, which will only be used for lawful purposes.
These purposes may change in the future as a result of legislative change. The AvSuper Trustee may disclose your TFN to another superannuation provider when your benefits are being transferred, unless you request in writing that your TFN not be disclosed to any other superannuation provider.
Tax on contributions made to AvSuper
15% contribution tax is generally deducted from employer contributions including salary sacrifice contributions. This contribution tax is also deducted from any contributions made by self employed members for which they intend to claim a tax deduction.
Note that an additional 15% tax will apply to contributions made by people with an annual salary over $300,000 (changing to $250,000 from 1 July 2017).
No tax is deducted from non-concessional (post-tax) contributions.
Additional tax may be payable on all contributions if you do not supply your TFN to us or you exceed the prescribed contribution limits.
Tax on rollovers into AvSuper
If you roll money over to AvSuper, there is no tax payable at the time of the rollover, unless the amount transferred contains an untaxed element. Generally an untaxed element would only be included in the rollover amount if it is a termination payment direct from an employer or a payment from certain government superannuation funds such as the CSS or PSS.
An untaxed element will generally be taxed at 15% when received by AvSuper.
Tax on investment earnings
AvSuper’s investment earnings are generally taxed at a maximum rate of 15% before the earnings are credited to your account. However, investment earnings on money being used to fund income streams are not taxed.
Tax on super withdrawals
If you are aged 60 and above you will not pay any tax on superannuation savings paid to you by AvSuper as a taxed fund.
If you are aged between Preservation Age and 60, you may have to pay tax when you draw on your superannuation. Your super may be made up of two components – a tax-free component and a taxable component. The tax-free component of your savings is generally:
- contributions made from post-tax income after 30 June 1983, and
- the amount accrued prior to 1 July 1983, as calculated at 1 July 2007
The remainder of your savings will be a taxable component. Any money paid to you from your superannuation will be taken proportionally from your tax-free and taxable components.
Tax on lump sum payments
There is no tax payable on the tax-free component.
The tax payable on any taxable component of a lump sum superannuation payment is outlined in the table below:
|Less than Preservation Age||20% plus Medicare levy on entire amount|
|Preservation Age but less than 60||NIL up to a threshold^, 15% plus Medicare levy for any excess amount|
|60 and older||NIL where the savings have already been subject to tax|
|Death||NIL on a Death Benefit paid to a death benefit dependant*
15% on a Death Benefit paid to a non-death benefit dependant*
^ Please refer to the Australian Tax Office for the current threshold.
* A death benefit dependant is defined in the in the Income Tax Assessment Act 1997 and includes your spouse or former spouse, child aged less than 18, any other person with whom you had interdependency relationship immediately before your death or any other person who was dependent on you immediately before your death.
Tax deduction if you are self employed
If you are under 75 and self employed or earning less than 10% of your assessable income from employment you may be able to claim a full deduction for contributions you make to your super account. The deductible amount is, however, subject to the same limits as apply to concessional contributions.
Read our Claiming a tax deduction for personal contributions fact sheet for more information about eligibility and the application process for this dedcution.
Tax offset for spouse contributions
A tax offset may be claimed by your spouse for contributions s/he makes to your account, depending on the level of your income.
The maximum tax offset of $540 per annum is calculated as 18% of eligible spouse contributions up to a maximum of $3,000 per annum, i.e. 18% x $3,000 = $540. It may be claimed if:
- your income is less than $10,800
- the contributions are made from post-tax income
- you meet the eligible spouse criteria.
A partial offset may be payable if your income is over $10,800 but not greater than $13,800 per annum.
From 1 July 2017, the income thresholds will increase to $37,000 for the full offset and up to $40,000 for a partial offset.
Tax concessions for retirement income streams
If you are 60 or older, your retirement income stream is only taxed if it is paid from an untaxed super fund. If you are aged under 60 but have reached Preservation Age, the tax-free component of your income stream payments is not subject to tax, while the taxable component of your regular income stream payments is subject to income tax at your marginal rate.
If you are between Preservation Age and age 60 you can claim a tax offset of 15% on the taxed part of your income stream.
This charge was abolished in 2005 but a surcharge debt may still apply to defined benefit members.