The most important thing you need to know about your super is that once you have reached age 60, a lump sum benefit is tax free (if paid from a taxed source like Health Super). That makes super one of the most tax-effective methods of saving for retirement and your future.

Generally, most super is taxed during the accumulation (savings) phase at a flat rate of 15% at three points: on taxable contributions (entry into super), on investment returns (whilst in super) and on payment of benefits (exit from super).

1. Tax on contributions

The following tax rates may change, depending on Government limits on contributions and whether the fund holds your Tax File Number (TFN).

Tax and limits on contributions

The Government has set limits on the amount you can contribute to your super each year at a reduced tax rate. If your contributions exceed this limit, you may have to pay extra tax on the excess contributions.

2. Tax on investment returns

While your super is in the Fund, Health Super 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).

Health Super manages all the tax requirements relating to super contributions and super investment earnings. Any taxes are taken into account when investing super contributions and reporting investment returns to members.

3. Tax on benefits (other than death benefits)

The tax treatment of benefits paid as a lump sum (from a taxed source) is summarised in the following table:

As well as your age, the tax on your super benefit can also depend on:

• if you choose to receive your benefit as a lump sum or as a pension
• if your benefit is received for retirement, death or disability
• whether your benefit is paid to yourself, one of your dependents or non-dependents
• whether or not you joined Health Super prior to 1983
• whether the fund holds your TFN.

For more information on tax and super visit the ATO website.

Need help?

Health Super Financial Planning can provide you with access to a qualified financial planner at a reduced rate. To start your retirement planning and to consider your future years call Health Super Financial Planning on 1300 780 223.

Health Super Financial Services Pty Ltd (trading as Health Super Financial Planning) ABN 37 096 452 318, AFSL No. 240019 is a wholly owned subsidiary of Health Super Pty Ltd (the Trustee of Health Super). Health Super Pty Ltd pays Health Super Financial Planning (HSFP) half of the annual 1% account keeping fee charged for Health Super’s Pension products. Health Super Pty Ltd also pays a variable monthly amount to HSFP to conduct member seminars. Health Super is not a representative of HSFP and receives no commission when making a referral to this service.