Superannuation is a method of building up a nest egg for retirement, funded by your employer and/or by you. Superannuation either reduces or replaces a pension paid to you by the Commonwealth Government through Centrelink.
Superannuation Guarantee Scheme
The Hawke Government brought in the Superannuation Guarantee Scheme in 1992. Since then your employer has been required to pay a set percentage of your salary into a superannuation fund. The minimum amount of wages attracting the super guarantee is $ 450 gross per month.
For 2002 - 2003 onwards the rate is 9%.
The Federal Government recently announced that the rate would be increased as per the following dates:
From 1 July 2013 the rate increases to 9.25 %.
From 1 July 2014 the rate increases to 9.5 %
In the 2014 Federal Budget, this rate was frozen for two years
From 1 July 2017 the rate increases to 10.0 %
From 1 July 2018 the rate increases to 10.5 %
From 1 July 2019 the rate increases to 11.0 %
From 1 July 2020 the rate increases to 11.5 %
And then from 1 July 2021, the rate will be 12.0 %
In the 2006 Federal Budget, changes were announced to take effect from July 1, 2007. Persons aged 60 and over will not be subject to tax on their pension or lump sum payments. However, the 2013 Federal Budget announced that a Super Fund in pension mode, with earnings greater than $ 100,000 will be taxed at 15 %. For workers earning more than $ 300,000, they will be taxed 30 % on all their contributions to superannuation.
From 1 July 2011, a flat $ 25,000 per person will be allowed, with $ 150,000 for Undeducted Contributions per year.
From 1 July 2013, if you’re over 59, you’ll be allowed to contribute $ 35,000.
From 1 July 2014, the $ 35,000 limit extends to those over age 49.
For death benefits, from 1 July 2013, payments made to dependent beneficiaries will have the first $180,000 paid tax free, the remainder taxed is at 16.5 %. Non-dependent beneficiaries will have the first $180,000 taxed at 16.5 % and the remainder at 31.5 %.
For the 2012-2013 year, bona fide redundancies have a tax-free component of the first $8,806, with $4,404 for each complete year of service.