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General

The Superannuation Guarantee (SG) is the official term used to describe the mandatory superannuation payments made by employers. Under Australian law, employers are required to contribute a minimum of 11% of your salary into your super fund. SG contributions are designed to help build your super and generate an income for when you retire.

Yes, super payments are not required for employees that are under 18 and working less than 30 hours per week.

Other exceptions include

  • Non-resident employees you pay for work they do outside Australia
  • Foreign executives with certain visas or entry permits 
  • Employees paid under the Community Development Employment Program
  • Employees temporarily working in Australia who are covered by a bilateral super agreement. 

The preservation age is the minimum age at which you can access your superannuation benefit. If you were born before 1 July 1960, your preservation age is 55; this gradually increases to 60 if you were born after 30 June 1964.

You may be able to access your super benefit early due to the following circumstances 

  1. A terminal medical condition 
  2. Financial hardship
  3. Compassionate grounds
  4. Permanent incapacity

All early release applications are subject to approval by your super fund and may require additional evidence.

See also: Can temporary residents in Australia access their super?

Terminal medical condition

You may be able to claim your super early if you have been diagnosed with a terminal illness or injury that, in the opinion of a specialist medical practitioner, is likely to lead to your death within 24 months from the date of diagnosis.

Please contact us when applying as withdrawing your full super balance may impact your insurance benefits.

Severe financial hardship

If you are in severe financial hardship it may be possible to access up to $10,000 of your super (although this cap is  removed if you are over your preservation age). To claim, you must satisfy one of the following:

1.   You’re under preservation age, unable to afford immediate and reasonable family living expenses and have been receiving Commonwealth income support payments continuously for at least 26 weeks.
2.   You’ve reached preservation age, you’re unemployed (or working less than 10 hours a week) on the date you submit your application and; you have been receiving Commonwealth income support payments for a total of at least 39 weeks.

The minimum amount that can be paid to you is $1,000 and the maximum is $10,000 (minus any taxes). You can only make one withdrawal on the grounds of financial hardship in any 12-month period. If you hold a temporary resident visa, you are not able to apply for financial hardship. 

Compassionate grounds

You may be able to apply for early access to your superannuation benefit if you need help to pay for:

  • Medical or dental treatment for yourself or a dependent, or pay for transport to the treatment
  • Overdue mortgage payments to prevent the sale of your home
  • Funeral expenses for you or your dependants
  • Palliative care costs for you or your dependants with a terminal medical condition
  • Home or car modifications to better accommodate you or your dependant’s severe disability

If you wish to make an application for the early release of your benefit on compassionate grounds, you will need to apply to the Australian Tax Office. Please contact our Helpline to discuss the process on 1800 682 626.  

Permanent incapacity

In the event that you become seriously ill or are permanently incapacitated, you may be able to claim your super balance early.  In order to receive any benefit you must show that, due to serious illness or injury, you are no longer able to work in any (or your own) occupation, and not be able to return to work.

Yes, you can access your superannuation benefit once you have left Australia permanently. You are eligible under the Departing Australia Superannuation Payment (DASP) condition of release if:
1.   You entered Australia on any eligible temporary visa and
2.   You have left Australia on a permanent basis and your visa has expired/been cancelled
3.   You are not an Australian or New Zealand citizen
4.   You do not hold a 405 or 410 retirement visa

You can make an online DASP application or download a paper form via the Australian Tax Office (ATO) website

Growing your super

You can see how your super balance compares to other people in your age bracket by visiting our Move the Dial page. If you’d like to boost your balance you have a variety of options, including

  • Salary sacrifice – You can make additional contributions to your super from your (pre-tax) salary. This not only boosts the amount, it can save you tax. 
  • Spouse contributions - This is an after-tax contribution that can help boost your spouse’s balance,  and may provide you with a tax offset in return. 
  • Voluntary after tax contributions - Contributions made from your take-home pay or savings. If you make personal (after-tax) contributions you may also qualify for the Government co-contribution. 

Consolidating your super into one account can be beneficial if you’ve had more than one job and, as a result, have more than one super account. Consolidating your super means you can

  • Keep track of your super and your account activity from one convenient place
  • Cut down on extra fees and costs from other funds
  • Potentially discover lost super

Before moving any super, it is a good idea to check with your current fund/s about any insurance you may have with them before transferring your balance/s. 

The Government Co-contribution is a scheme put in place to help low income earners boost their retirement savings. If you meet certain criteria and make after-tax contributions to your super, you could receive an annual top up from the government, e.g. for every $1 in additional contributions you make (up to $1,000), the Government will chip in $0.50, up to $500. 

If you are eligible, your co-contribution will be calculated and automatically placed into your super by the Australian Tax Office (ATO). 

Salary sacrifice is when you ask your employer to direct some of your pre-tax salary into your superannuation account. This is in addition to the mandatory Superannuation Guarantee (SG) contributions already made into your super account. Salary sacrifice contributions are taxed at the lower rate of 15% rather than the marginal tax rate. 

There are limits on how much you can put into your super via salary sacrifice each year. Under the concessional (pre-tax) contributions cap, you can contribute up to $27,500 including your 11% Superannuation Guarantee (SG) contributions.  

If you would like to start making salary sacrifice contributions, you should contact your employer’s Human Resources or payroll office. Please note that these caps are subject to change in the future.

 

Contribution splitting is when you split up to 85% of your annual pre-tax contributions from your account to your spouse’s account (or vice versa). Your contributions can only be split once a year and are free of charge between Equip accounts. 

Employer contributions are eligible for splitting. This includes
-   Superannuation Guarantee payment
-   Salary sacrifice contributions
-   Other employer funded contributions 

If you are considering contribution splitting, we recommend speaking to a financial planner.

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