• Tax & superannuation

  • The government provides a number of tax concessions to encourage you to save for your retirement through super
     
     These concessions apply to:

    • Contributions into your super account
    • Investment earnings on your account
    • Any payments you receive from your account.
  • Tax on superannuation contributions

    • Nobody wants to have to pay more tax than is absolutely necessary, so it’s really important that you understand that there are tax implications for exceeding the caps or limits on contributions (personal and/or employer) into your super account.

      Concessional (before-tax) super contributions

      Concessional or before-tax contributions include employer super contributions (e.g. Superannuation Guarantee (SG)), salary sacrifice contributions, and self-employed contributions (for which you claim a tax deduction).

      Your age in 2014/15 Before-tax
      limit*
      Contributions
      tax paid
      Tax paid on contributions
      above the limit
      < 50 $30,000 pa  15%
      (30% if you earn
      $300,000 pa or more)
      At your marginal
      tax rate
      50 + $35,000 pa 15%
      (30% if you earn
      $300,000 pa or more)
      At your marginal
      tax rate
      • If you earn less than $300,000 pa, these contributions are taxed at 15% on the way into the Fund.
      • If you earn $300,000 pa or more (including concessional contributions to super, adjusted fringe benefits and some other items) your contributions will be taxed at 30%. If your income without super is less than $300,000 and concessional contributions raise it to over $300,000, the 30% tax rate only applies to the amount over $300,000.
      • If you earn under $37,000 pa and receive at least 10% of your income from employment or operating a business, you will effectively pay no tax on your SG contributions—the 15% tax will be refunded to your super account. This is called the low income super contribution (LISC) scheme. (Note that the LISC is payable for the 2012/13, 2013/14, 2014/15, 2015/16 and 2016/17 financial years only.)


      If you do make concessional contributions to super above the annual limit, the excess will be added to your assessable income and will be taxed at your marginal tax rate. You will receive an offset for the 15% contributions tax already paid.

      You will have the choice of withdrawing up to 85% of the excess contribution. As you will have already been taxed on this amount at your marginal tax rate, no further tax is payable on any withdrawal. 

      Note that contributions above the before-tax limit will also count toward your after-tax limit (see below).

      Non-concessional (after-tax) super contributions

      Non-concessional or after-tax contributions are generally made from your take-home pay on which you have already paid tax at your marginal tax rate. This means no contributions tax applies when deposited into your super account or if you take a cash super benefit when you retire, as long as they are within the contributions limit. 

      Your age in 2014/15 After-tax limit* Contributions tax Extra tax paid
      if above limit
      < 65 $180,000 pa or $540,000 averaged over 3 years Nil At your marginal
      tax rate
      65–74  $180,000 pa
      (You must meet a Work Test requiring you to work 40 hours in a 30-day consecutive period)
      Nil At your marginal
      tax rate
      75 + You can no longer contribute
      to super on an after-tax basis
      N/A N/A

      *Limit does not include the Government co-contribution.

      However, if you contribute to superannuation over the non-concessional cap, the excess contributions will generally be taxed at the top marginal rate.

      This will not occur if you choose to withdraw the excess contributions and 85% of the associated earnings (as approximated by the ATO). If you choose the withdrawal option, the associated earnings will be included in your assessable income and taxed at your marginal rate, less a tax offset of 15%.

      For more details, download our Contributions fact sheet (PDF).

  • Tax on investment earnings

    • Investment earnings are taxed at the maximum rate of 15%, with capital gains generally being taxed at a discounted rate of 10%. Tax can be reduced by offsets such as dividend imputation credits and tax deductions available to the Fund.

      If the Fund suffers net capital losses in any year, the losses will be carried forward until they can be offset against future capital gains. The future tax benefit is called a Deferred Tax Asset (DTA) and some or all of any DTA is included in unit prices.

  • Tax on lump sum benefit payments

    • Your super will be divided into taxable and tax-free components. You will generally only have a tax-free component if you made after-tax contributions to your super.

      When you take your super, there is no tax on the tax-free amount, but you will pay tax on the taxable component. The taxable amount depends on your age:

      • Generally, no tax will be charged if you are aged 60 or more.
      • If you are between age 55 and 60, there is generally no tax on the first $195,000 and the balance is generally taxed at 15% plus the Medicare levy.
      • If you are under age 55, the whole taxable component will usually be taxed at 20% plus the Medicare levy.
      • If you are a foreign national who is leaving Australia permanently, the taxable component will generally be taxed at 38%.


      A different tax treatment applies if your benefit contains an insured amount. In some cases, a higher rate of tax may apply.

  • Tax on death benefits

    • There is no tax on any tax-free component of your death benefit.

      The treatment of the taxable component depends on who receives the benefit. It does not matter if the money is paid directly to the recipient or via your Will.

      Lump sum death benefits paid to your spouse (including a same sex spouse), former spouse, child under age 18 (including a child of a same sex relationship), person with whom you have an interdependency relationship or financial dependants are tax-free.

      The taxable component of a lump sum death benefit paid to a non-dependant (for tax purposes) such as a non-dependant adult child will be effectively taxed at 15% plus Medicare levy.

      A higher rate of tax may apply if the benefit contains an insured amount.

      The Fund will increase the death benefit paid to a spouse, child or financial dependent by applying an anti-detriment payment which effectively compensates the recipient for any contributions tax that was previously deducted from the member’s account balance. The proceeds paid under the anti-detriment death benefit provisions will be subject to tax under the rules that apply to lump sum superannuation death benefits.

      When considering any estate planning strategies, please note that potential anti-detriment death benefits payable to an eligible beneficiary may be reduced or eliminated in situations where a superannuation recontribution strategy is adopted. A recontribution strategy involves a super fund member who is over age 55 withdrawing benefits tax-free and then recontributing them back to a super as non-concessional (after-tax) contributions.

      Contact us if you need more details about tax on death benefit payments.

  • Tax on insurance payments

    • Depending on your age, you may pay a higher rate of tax on any insured component of your benefit.

      There is no tax on benefits paid as a result of a terminal medical condition.

      Call us on 1300 658 776 if you need more information.

  • Providing your tax file number

    • If the Fund does not have a record of your tax file number (TFN), you may have to pay extra tax on your super and we may not be able to accept certain types of contributions. 

      If you provide us with your TFN within four years, we will be able to claim a refund for the extra tax paid.

      Once we receive the refund, we will then credit that amount to your super account, provided you are still a member of Australian Catholic Superannuation.

      To avoid paying more tax on your super than is absolutely necessary, simply login to your Members online account and update 'Your Personal Details', or download and complete a Tax file number nomination form (PDF) and return it to us as soon as possible.

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