Taxation on Benefits Paid to You
Benefits (other than death benefits)
Tax will be payable on a lump sum benefit, paid to you depending largely on your age. In general, lump sum benefits (and pensions) paid to persons age 60 or over are tax free (if paid from a taxed source). Tax is payable on lump sum benefits paid to persons under age 60, as outlined in the following table:
|
Age \ Status |
Component and tax treatment |
|---|---|
|
Age 60 or over |
Tax free |
|
Preservation age (generally age 55) to age 59 |
Tax free component* is tax free. Taxable component**
|
| Less than preservation age |
Tax free component* is tax free. Taxable Component** taxed at 20%(plus medicare levy). |
|
* The tax free component consists of amounts such as the accumulation of non-concessional contributions, pre 1983 components and invalidity components. If you would like more information about these components contact the Fund Administrator on 1300 366 657. ** The taxable component is the benefit less the taxfree component and consists of amounts such as the accumulation of concessional contributions and the post 1983 component. If you would like more information about these components contact the Fund Administrator on 1300 366 657. *** The $160,000 benefit limit is indexed in line with average weekly earnings each year and increased in $5,000 increments. |
If your benefit includes an untaxed element, higher tax may be applicable. Special tax treatment may apply to benefits paid to terminally ill persons and Departing Australia Superannuation payments.
When any benefit is paid from an interest in the Fund, it must comprise both tax-free and taxable components, in the same proportions as the total interest. You cannot nominate to withdraw specific components of your interest. If the Fund does not have your TFN at the time a benfit is paid, higher tax applies.
Tax is not generally payable when transferring benefits to another superannuation fund or product (eg. pension).