Contributions

[Note: In the 2009 Federal Budget the Government announced significant changes to the superannuation contributions regime, particularly in respect of non-concessional contributions - effectively halving their value. Further announcements are also expected later this year regarding changes to preservation ages. See page on the 2009 Federal Budget for more details - we will update this page when full details are available]

Individuals can make personal contributions from after tax dollars or via a salary sacrifice arrangement with their employer.  Personal contributions are permitted up to age 65 irrespective of whether the individual is working or not.  Between the ages of 65 and 75 contributions are allowed if the person works at least 40 hours in a period of no more than 30 consecutive days in the tax year.  The contribution rules are:

Transitional rules for those aged 50 and over during the transitional period:

After tax, or concessional contributions, are limited to $150,000 per person per financial year - any unused limit cannot be carried forward.  Individuals under the age of 65 (on 1 July), can use averaging provisions to contribute up to $450,000 (ie. three times the annual limit) in a single year. If triggered however, contributions are limited to
$450,000 across that year and the following two years (with no indexation in the following two years).

Expatriates planning on making substantial contributions to their superannuation in the next few years should discuss their position with advisors – the combined impact of the new taxation rules and caps is to place an even higher emphasis on forward planning in order to most effectively use superannuation allowances

Benefits as lump sum, pension or combinations.

Pensions are accessible in various types of draw down arrangements. Once a person has reached their preservation age, they are be able to access their  superannuation through an income stream without having to retire permanently from the workforce.  The preservation ages are:

Once a person retires or reaches age 65 they have the option to commute and access the benefit as a lump sum.

From 1 July 2007 the payment rules became:

• Preservation rules not changed.
• Compulsory withdrawals abolished, but if not in pension format – subject to 15% tax on assessable income.
• Minimum standards for pensions:

• subject to a minimum annual amount
• no residual capital values
• on death only transferred to one of their dependants or cashed as a lump sum.
• Pension meeting existing rules and commenced before 1 July, 2007 regarded as meeting the new requirements.

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