Temporary residents

On 1 April 2009, the access to super rules for temporary residents changed.

This means that temporary residents who are departing Australia may still access their super via a Departing Australia Superannuation Payment (DASP), but the rate of withholding tax will increase by 5% (unless an application for a DASP was lodged prior to 1 April 2009). Therefore, the ‘taxed component’ of super benefits for temporary residents will be taxed at the new rate of 35% and the ‘untaxed component’ at the new rate of 45%.

If a temporary resident does not apply for their superannuation benefit within six months of leaving Australia, their super fund can be required to send their account balance to the ATO. Any money sent to the ATO can be claimed at a later date, subject to the payment of DASP tax. Because these changes effectively remove the tax concessions applying to superannuation, temporary residents who are salary sacrificing into super should consult a financial planner.

If ACSRF transfers your benefit to the ATO, we will notify you of the transfer and provide you with an exit statement if we have your contact details. However, if we do not have your contact details, we will rely upon the relief permitted by the Australian Securities and Investments Commission and will not send you notice of the transfer or an exit statement, either at the time of or after the transfer. You will be able to obtain information about your superannuation by contacting ACSRF or the ATO.

The rules have changed even more for temporary residents who are not departing Australia. Unless they satisfied a condition of release (such as retirement, severe financial hardship, compassionate grounds or having an account balance of less than $200) prior to 1 April 2009, they will only be able to access their superannuation benefits (including to start an allocated pension) in the event of death, terminal illness or incapacity.

New Zealand residents are not affected by the temporary residents legislation as they are able to retire in Australia, however, they must still satisfy an Australian superannuation condition of release to access their super benefits. Similarly, if a New Zealander returns to their homeland, they will not be able to access any super accrued in Australia via a DASP, but will have to wait until they satisfy a normal condition of release eg retirement after reaching preservation age.

Holders of “Investor Retirement” or “Retirement” visas are also unaffected by these changes to legislation for temporary residents.