Frequently Asked Questions
You need to check the relevant legislation in your State and Territory, as the rules are different in each jurisdiction.
-
What is superannuation?
- Superannuation is a scheme under which a person can save money for their retirement.
- It is compulsory to have a super account under certain circumstances.
- If you are employed your employer will usually be obliged to make contributions to your super fund.
>> Read more & related FAQ's
-
Who can open a superannuation account?
- Any person aged 16 and over can open a superannuation account.
- You have a choice of superannuation fund. Once you are in employment you can nominate your chosen fund and your employer will make payments into your superannuation account throughout the year.
>> Read more & related FAQ's
-
Who is an employer for superannuation purposes?
- An employer is someone who employs a person on a full-time, part-time or casual basis.
- This can be under either a written or a verbal employment contract.
- Under the law an employer may be an authority, organisation, corporation, person or other entity.
>> Read more & related FAQ's
-
What is a superannuation guarantee?
- In Australia an employer must pay a minimum set amount of their employee’s salary and any contributions listed under an Industrial Award into a super fund on behalf of their employee.
- This is called the Superannuation Guarantee and the amount (in 2015) is currently 9.5%.
- The minimum amounts are set by legislation.
>> Read more & related FAQ's
-
Who is eligible for the superannuation guarantee?
- To be eligible for the Superannuation Guarantee Scheme the employee:
- must be over 18 years of age; or
- if under 18 years of age must work more than 30 hours a week; and
- must earn at least $450 (before tax) per month.
>> Read more & related FAQ's
-
What is a default super fund?
- If you do not or cannot choose a super fund your employer will pay contributions into a default super fund.
- Usually the default super fund is named under an industrial award agreement. From 1 January 2014 the default super fund is a MySuper account.
- Employees cannot request their employer to change their super fund more than once in a year.
>> Read more & related FAQ's
-
What is a concessional contribution?
- A concessional contribution is a before tax contribution made to a super fund and is included in the fund’s assessable income. Such contributions are taxed at 15%. Examples of concessional contributions include:
- employer contributions;
- salary sacrifice; and
- personal contributions from a self employed person allowed as an income tax deduction.
- An annual limit on concessional contributions applies and any contribution that exceeds the limit is taxed at the marginal tax rate. This can be up to 49%.
- If you have any other questions about your contributions you can use our free and anonymous service.
>> Read more & related FAQ's
-
What is the concessional contribution cap for 2014-2015 financial year?
- The concessional contribution cap or limit for the 2014-2015 financial year is $30,000 for people less than 49 years of age.
- For persons aged 49 years or over the concessional cap is $35,000.
- Any contributions that exceed the limit will be taxed at the marginal tax rate.
- This rate is likely to change in each new financial year.
>> Read more & related FAQ's
-
What is a non-concessional contribution?
- A non-concessional contribution is an after tax contribution that you can personally make to your super fund and will not be included in a fund’s assessable income. Therefore a tax deduction cannot be claimed for such contributions. Examples of non-concessional contributions include:
- personal contributions;
- profits earned from selling an asset;
- contributions made by a spouse; and
- for persons under 18 years of age contributions made by another person other than the employer.
- There are annual limits for non-concessional contributions and any excess contributions are taxed at the marginal tax rate.
>> Read more & related FAQ's
-
What is the non-concessional contribution cap for 2014-2015 financial year?
- The non-concessional contribution cap or limit for the 2014-2015 financial year is $180,000 for people less than 49 years of age.
- You must have your Tax File Number noted with your super fund to make non-concessional contributions.
- Non-concessional contributions that are within the limit are not taxed in your super fund. Any excess contribution is taxed at up to 47-49% tax rate.
>> Read more & related FAQ's
-
What is salary sacrifice?
- You may choose to ‘sacrifice’ a portion of your future gross salary (before tax) into your super fund through an arrangement made with your employer.
- Depending on how much you earn this may be an efficient way to increase the amount of money in your super fund.
- Contributions to the super fund are only taxed at 15% whereas the marginal rate of income tax can be up to 47-49%.
>> Read more & related FAQ's
-
What is a self-contribution?
- Self-contributions are contributions a person makes to their super fund from their net income (after tax).
- Under superannuation terminology self-contributions are non-concessional contributions and are not included in the assessable income of the fund.
>> Read more & related FAQ's
-
What is a co-contribution?
- The government offers a ‘super co-contribution scheme’ under which a low-income earner (less than $48,516 for 2013-14 financial year) may receive a maximum of $500 as co-payment from the government into their super fund. Eligibility requirements apply.
>> Read more & related FAQ's
-
When can a person access benefits under their super fund?
- A super fund is set up to provide for retirement benefits can only be accessed under strict conditions.
- Usually you can access the benefits:
- when you reach your preservation age;
- when you reach the retirement age of 65; or
- under the transition to retirement rules.
- You may be eligible to access your benefits prior to retirement under very limited circumstances such as severe financial hardship or disability.
- Our Phone a Lawyer service may be able to put you in touch with a lawyer for a preliminary consultation if you think you may need legal advice.
>> Read more & related FAQ's
-
What is a Self-Managed Super Fund (SMSF)?
- A SMSF is a type of super fund where the members of the fund have greater control over the money in their fund and have a wider choice of investments options available. SMSFs are often used for investment in property. The members of a SMSF are often members of a family.
- A SMSF must be set up for the sole purpose of providing benefits to members on retirement. Contrary to common belief money under the SMSF cannot be accessed early by its members.
- Each member of the fund is also the beneficiary, trustee and director of the trustee company.
- The Australian Tax Office strictly regulates SMSFs and non-compliance can lead to imposition of severe pecuniary penalties.
- SMSF have lower annual fees and better tax advantages than other funds.
- Setting up and running a SMSF is a very complicated task and it is imperative to get legal and financial advice when considering if a SMSF is suitable for you.
- You can use our LegalPlan™ membership to ask lawyers for tenders or a Fixed Fee Quote in relation to your Self-Managed Super Fund establishment needs.
>> Read more & related FAQ's
View more Information on Superannuation