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What Superannuation Means in Australia

Part of the Tax for Australians For Dummies Cheat Sheet

Superannuation is a scheme to help you fund your retirement. Monies invested can’t be accessed until you satisfy a condition of release, such as when you retire. Some of the Australian superannuation rules are covered here:

  • Super Government Co-Contribution Scheme. To qualify for this government freebie:

    • Your assessable income must be less than $33,516, for a maximum benefit of $500 for 2013–14 tax year.

    • If your assessable income is more than $48,516, you can’t qualify.

  • Concessional contributions are tax deductible:

    • For the 2013–14 tax year the maximum concessional contributions that qualify for a tax deduction depend on whether you’re under or over 60 years of age.

    • If you’re under 60, concessional contributions up to $25,000 are tax deductible, and if you’re over 60, concessional contributions up to $35,000 are tax deductible.

    • (Note: From 1 July 2012 if you earn more than $300,000 and you make a concessional contribution, the rate of tax payable on this contribution increases from 15 per cent to 30 per cent.)

  • Non-concessional contributions don’t qualify for a tax deduction:

    • If you’re under 65 years, you can contribute a maximum of $150,000 a year or $450,000 over three years.

    • If you’re 65–74 years, you can contribute a maximum of $150,000 and you must satisfy an employment test.

  • Pensions from most super funds are taxed as follows:

    • If you’re 55–59 years and receive a superannuation pension, your pension is taxed at your marginal rates plus the Medicare levy, minus 15 per cent tax offset.

    • If you’re 60 years and above and receive a superannuation pension, your pension is tax free.

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Tax for Australians For Dummies Cheat Sheet

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