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Superannuation can be an excellent way to save for your retirement, because it attracts special Government benefits and tax concessions. That makes superannuation one of the most tax-effective investment vehicles.To work out how your superannuation payout will be taxed on retiring, you need to know:
Superannuation paid from a taxed source (like Health Super) as a lump sum or pension is generally tax free when paid to people aged 60 or over.
If you take your superannuation as a pension, then any investment returns on the assets that support the pension are also tax free. This can assist in making your superannuation savings last longer.
Superannuation is taxed at a rate of 15% at three points: on contributions (entry into superannuation), on investment returns (whilst in superannuation) and on payment of benefits (exit from superannuation).
| Types of contributions | Tax rate |
| After–tax contributions to your account or a spouse account | 0% |
|---|---|
| Employer contributions (including contributions from your before-tax salary) | 15% |
| Before-tax contributions, which have already received a tax deduction | 15% |
The government has set limits on the amount you can contribute to your superannuation each year at a reduced tax rate. If your contributions exceed this limit, you may have to pay extra tax on the excess contributions.
While your superannuation is in Health Super, we must pay tax on investment returns. The current rate of tax is 15% per year (but it may be less after rebates and credits are taken into account).
Any taxes are taken into account when investing superannuation contributions and reporting investment returns to members.
The tax treatment of benefits paid as a lump sum (from a taxed source) is summarised in the following table:
| Age | Lump sum |
| Age 60+ | Tax free |
|---|---|
| Between preservation age & age 60 | Exempt component is tax free First $165,000* of taxable component is tax free Taxable component above $165,000* is taxed at 15% plus Medicare levy. |
| Less than preservation age | Exempt component is tax free Taxable component is taxed at 20% (plus Medicare levy). |
* Threshold applies 2011/2012 and is subject to change
As well as your age, the tax on your superannuation benefit can also depend on:
For more information on tax and superannuation refer to our Fact Sheet: Tax or visit the ATO website.
There is no tax payable when you roll over money from one Australian superannuation fund to another unless the amount rolled over contains an untaxed element e.g. a payment from certain public sector superannuation funds for Government employees.
Health Super Financial Planning can provide you with access to a qualified financial planner at a reduced rate. If you need help with your retirement planning and to consider your retirement years call Health Super Financial Planning on 1300 780 223.
Health Super Financial Services Pty Ltd ABN 37 096 452 318, AFSL 240019 trading as Health Super Financial Planning (HSFP) is wholly owned by the FSS Trustee Corporation ABN 11 118 202 672 AFSL 293340 Trustee of the First State Superannuation Scheme ABN 53 226 460 365.
The Trustee pays HSFP half of the annual 1% account-keeping fee collected on all Health Super Account Based Pensions. The Trustee also pays a variable monthly amount (calculated on a cost recovery basis) to HSFP to conduct member seminar programs. The Trustee is not a representative of HSFP and receives no commissions when making referrals to this service. To obtain further information about the services provided by HSFP, contact HSFP direct by telephoning 1300 780 223. Alternatively, visit HSFP’s website at hsfp.com.au