Taxation

The tax information provided in this section is a brief summary and is based on taxation laws that were current as at 1 July 2009. You should obtain more detailed information on the taxation of super by calling the ATO Super helpline on 13 10 20, or you can seek advice from a qualified taxation advisor before making any decisions.

Non-concessional contributions
No tax is paid by the Fund on the contributions you make into the fund, that are within the non-concessional contributions cap, from income on which you have already paid tax (post-tax contributions).

Concessional contributions
A tax of 15% is paid by the Fund on concessional contributions that are within the concessional contributions cap. Concessional contributions include:

• the contributions your Employer makes for you
• any contributions paid from income on which tax has not been paid (eg salary sacrifice contributions) and
• any contributions you yourself paid for which you received a tax deduction, for example if you are self employed (these are called deductible contributions).

Contribution caps
The amount of concessional (employer, pre-tax and self-employed) and non-concessional (post-tax) contributions that will benefit from concessional tax treatment is capped. Contributions in excess of these caps will be taxed at the top marginal tax rate. This tax will be imposed on the individual, who will be able to withdraw from their super fund an amount equal to their tax liability. Superannuation funds are prohibited from accepting contributions in excess of the maximum allowable non-concessional contributions, paid in one lump sum, at any time during a financial year.

The following table details the relevant contribution caps, transitional arrangements, applicable tax rates and exemptions applying from 1 July 2009.

Concessional contributions (Employer, pre-tax & self-employed) Non-concessional contributions (Member post-tax) Annual contributions cap $25,000* The cap applies per person, not per contributing employer. Contributions above the concessional contributions cap will count towards the non-concessional contributions cap. $150,000 The Government co-contribution is not included in the cap. This cap is three times the concessional contributions cap and increases as that cap is indexed. Transitional and other arrangements $50,000 The cap is increased to $50,000 annually for those aged 50 years or over on the last day of a financial year from 1 July 2009 to 30 June 2012. For example, if you turn 50 on 1 January 2011 you will be able to make $50,000 of contributions in the 2010/11 and 2011/12 financial years. From 1 July 2012 the maximum concessional contributions per annum will return to the indexed $25,000 amount. $450,000 If you are under age 65 at any time in a financial year you will be able to make up to $450,000 of contributions in one financial year. However, contributions in excess of the cap in one financial year will reduce the non-concessional contributions for the next two financial years. Contributions tax (levied to the Fund) 15% Nil Additional tax on amounts in excess of the contributions cap (levied to the individual) 31.5% (When combined with the contributions tax paid by the Fund, the total tax payable will amount to 46.5%.) 46.5% Exemptions from the cap N/A Proceeds from the disposal of eligible small business assets up to a lifetime limit of $1.1 million (indexed); and Proceeds from a settlement for an injury resulting in permanent disablement.

The Federal Government has abolished the superannuation contributions surcharge. This means that no surcharge is payable on contributions or termination payments relating to financial years starting on or after 1 July 2005. However, surcharge assessments will still be issued by the ATO for contributions received for previous financial years.

The surcharge is deducted from members’ accounts on receipt of ATO assessments where applicable. If you leave ACSRF with an outstanding surcharge assessment, the assessed amount will be deducted from your new fund, or in the case of retirees, you will be provided with the assessment notice by the ATO.

Please ensure that your financial adviser takes this item into consideration.

It is in your interest to give your super fund your TFN when you join.

We are required to tell you the following things before you provide us with your TFN. Your TFN is confidential and you should know the following things before you decide to provide it.

• We can collect your TFN under the Superannuation Industry (Supervision) Act 1993.
• If you do provide your TFN to us, we will use it only for legal purposes. This includes finding or identifying your superannuation benefits where other information is insufficient and providing information to the Commissioner of Taxation. These purposes may change in future.
• It is not an offence if you choose not to quote your TFN. But if you don’t tell us your TFN, either now or later, you may pay more tax on contributions and your benefits. It may also be more difficult to locate or amalgamate your superannuation benefits in the future to pay you any benefits you are entitled to. These consequences may change in future.
• If you provide your TFN to us, we may provide it to the trustee of another super fund or to an RSA provider where that RSA provider or trustee is to receive your transferred benefits in the future. We won’t pass your TFN to such a trustee or RSA provider if you tell us in writing that you don’t want us to do that. We may also give it to the Commissioner of Taxation. Otherwise, your TFN will be treated as confidential.

If you do not have a TFN, contact the ATO on 13 10 20.

If you were an existing member at 1 July 2007 and have not quoted a TFN to ACSRF, we are required to withhold an extra 31.5% tax from your concessional contributions once they have exceeded $1,000. This is in addition to the 15% contributions tax already paid, so. the total tax will amount to 46.5%. If you joined after 1 July 2007, the $1,000 threshold does not apply—the extra tax will be withheld from all concessional contributions if you have not quoted a TFN.

Any no-TFN tax payable will be deducted from your account on 30 June each year or on exiting the Fund, whichever is earlier, and remitted to the ATO.

The additional tax will be refunded where a valid TFN is provided to the Fund within a four-year period from the start of the financial year in which the tax is payable and we are entitled to a tax offset. Interest on the additional tax may also be payable by the ATO in some circumstances.

In order to avoid these additional taxes being withheld from your contributions, please ensure that you have quoted your TFN to the Fund. Download a copy of ACSRF's Tax file number nomination form, or call your local ACSRF office on 1300 658 776 for a copy to be posted to you.

We are not permitted to accept your non-concessional contributions if you have not quoted your TFN to ACSRF.

Rejected contributions will be banked into the Fund’s trust account. We will attempt then to contact you for the purposes of obtaining your TFN declaration. Should we be successful in obtaining your TFN, we will transfer the contribution to your superannuation account with the Fund. Should we fail to obtain your TFN within one month from the date the contribution was banked into the trust account, we will refund the total amount to you.

In order to avoid your non-concessional contributions being rejected, please ensure that you have quoted your TFN to the Fund. Download a copy of ACSRF's Tax file number nomination form, or call your local ACSRF office on 1300 658 776 for a copy to be posted to you.

There is no tax paid if you transfer money from one complying superannuation fund to another, unless the amount transferred contains an untaxed component (this is a termination payment direct from an employer, or a payment from certain superannuation funds for government employees).

An untaxed component attracts the 15% contributions tax.

Investment earnings are taxed at the maximum rate of 15%, with capital gains generally being taxed at an effective discounted rate of 10%.

This amount can be reduced by the offsets available through dividend imputation credits and tax deductions available to the Fund.

The amount of tax paid when you withdraw a benefit from ACSRF will depend on your own circumstances, including your age, and the benefit components. The key points are as follows:

• The payment of superannuation benefits, whether in the form of a lump sum or an income stream, to persons aged 60 and over is tax-free. These benefits will not need to be included in your income tax return.
• Simplified taxation arrangements apply to the payment of superannuation benefits to persons under age 60. These are set out in the table below.
• Reasonable benefits limits have been abolished.
• If you use your benefit to receive a regular income from a super fund, special tax concessions apply (refer to the ACSRF Allocated Pension Plan PDS).
• If you are a foreign national who is leaving Australia permanently, higher tax rates may apply to your benefit. Contact the ATO for details.

The components of benefit payments are required to be withdrawn in the same proportion as your tax-free and taxable components. The relevant proportions will be calculated at the date your lump sum benefit is paid or your superannuation income stream commences.

Component Age under 55 Age 55 to 59 Age 60 and over Tax-free component Tax-free Tax-free Tax-free Taxable component Taxed at 20% The first $150,000* is tax-free and the balance taxed at a maximum of 15%. Tax-free

• Lump sum death benefits paid to a person who is a dependant are tax-free. A dependant for these purposes is a spouse (including de facto or same sex spouse) or former spouse, a child (including as defined in family law) less than 18, a person with whom the deceased had an interdependency relationship just before he or she died, or any other person who was financially dependent on the deceased just before he or she died.
• Lump sum death benefits paid to non-dependants are taxed in the following way:
  • the tax-free component is not subject to tax
  • tax on the taxed element of the taxable component does not exceed 15% tax, plus Medicare levy, and
  • tax on the untaxed element of the taxable component does not exceed 30% tax, plus Medicare levy.

A tax offset ensures that the rate of income tax on the taxable component does not exceed the rates described above.

In making a death benefit payment to a dependant, the ACSRF Trustee will increase the death benefit paid by applying the anti-detriment provisions. An anti-detriment payment effectively compensates dependants for the contributions tax paid.

A dependant for the purpose of anti-detriment payments does not include a person in an interdependency relationship.

A tax rebate of up to $540 is available if you make contributions on behalf of your spouse and your spouse earns less than $13,800 per annum.

If you are self-employed or substantially self-employed (less than 10% of your assessable income, reportable employer superannation contri-butions and reportable fringe benefits are attributable to employment as an employee), you will be able to claim a full deduction for personal contributions to superannuation until age 75, subject to contribution limits. For 2009/10 the maximum allowable deduction is $25,000 (or $50,000 if you qualify under the transitional rules).

Self-employed contributions to superannuation will be treated in the same way as employer contributions except that, if you wish to claim a tax deduction, you will need to notify the Fund that you made self-employed contributions in the approved form at the time you lodge your income tax return or at the end of the financial year after the contributions were made, whichever is the earlier, and we must have given you an acknowledgement of receipt of the notice. If you withdraw some or all of your benefit, you must notify the Fund of your intention to claim a tax deduction before you make the withdrawal. Superannuation contributions will be eligible for a tax deduction provided they are made before the day that is 28 days after the end of the month in which you turn 75.

Self-employed after-tax contributions qualify for the Government Co-contribution Scheme, provided you satisfy the eligibility criteria for the co-contribution.

The income calculation for co-contribution purposes will be your assessable income (including any reportable fringe benefits, if applicable) less deductions you are entitled to as a result of carrying on a business.

If you are self-employed and require further information, contact your local ACSRF office.

Government co-contributions of $1.00 are provided for every dollar of certain non-concessional personal contributions made by low and middle income earners who receive employer support or are self-employed. The maximum $1,000 government co-contribution will be available if your income is up to the lower income threshold ($31,920 for 2009/10 and indexed for later years) and you make a $1,000 personal contribution. The amount of the co-contribution will phase out at five cents for each dollar of income above the lower income threshold, up to a maximum income of the higher income threshold ($61,920 for 2009/10).

The higher income threshold will increase as the lower income threshold is indexed so that it remains $30,000 higher.

To be eligible for the co-contribution, you must:

• make eligible personal contributions to a complying superannuation fund or retirement savings account (RSA)
• have total income (assessable income, reportable employer superannuation contributions, plus reportable fringe benefits) of less than the higher income threshold
• earn 10% or more of your total income from eligible employment or carrying on a business or a mixture of both
• not hold an eligible temporary resident visa at any time during the year
• lodge an income tax return for the year of income and
• be less than 71 years old at the end of the year of income.

You do not need to apply for the co-contribution as the ATO will assess if you are entitled to receive this incentive, using information obtained from your super fund and from your income tax return.

Contact your local ACSRF office or the ATO for further details.

No GST is payable on contributions, on benefits paid, rolled over or transferred or on the return credited to a member’s account.