Questions & Answers

Answers to frequently asked questions about Self Managed Superannuation Funds (SMSF) and pension plans

What is total superannuation balance?

What is total superannuation balance?

Total superannuation balance is the total value of member’s super interests on a given date.

Total superannuation balance is the sum of the following:

Accumulation interest
(+) transfer balance account (or modified transfer balance account)
(+) rollover in transit
(–) structured settlement contributions

 

What are the contribution rules?

What are the contribution rules?

Contribution rules (from 1 July 2007)

Contribution typeMember age under 65Member age 65-69Member age 70-74Member age 75 +
Undeducted contributionsGreen tickGreen tick

Must be gainfully employed at least on part-time basis 3
Must be gainfully employed at least on part-time basis 3X
Eligible for co-contributionsGreen tickGreen tickOnly if less than age 71 at end of financial year of contributionX
Deductible contributionsGreen tick

If less than age 18, must have some income from eligible employment1 or income from the carrying on of a business2, but this income must make up less than 10% of assessable income.5,6
Green tick

Must be gainfully employed at least on part-time basis3,6
Green tick

Must be gainfully employed at least on part-time basis3,6

X
Employer contributionsGreen tickGreen tickGreen tickX
Superannuation guaranteeGreen tickGreen tickGreen tick4Green tick4
Mandated employer contributions (e.g. under award)Green tickGreen tickGreen tickGreen tick
Salary sacrificeGreen tickGreen tickGreen tickX

Please note that a rollover is not a contribution; rollovers can generally be undertaken at any age. Thus, while member contributions cannot be made after age 75, a CGT Exempt component (via the small business CGT Retirement Exemption) can be created and rolled over after age 75).

NOTES:

  1. Eligible employment means: the holding of any office or appointment; or the performance of any functions or duties; or the engaging in of any work; or the doing of any acts or things that results in the person being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (assuming that subsection 12 (11) of that Act had not been enacted).
  2. Business refers to any profession, trade, employment, vocation or calling, but does not include occupation as an employee.
  3. Gainfully employed at least on a part-time basis refers to someone who is gainfully employed for at least 40 hours in a period of not more than 30 consecutive days in that financial year. This employment period must be satisfied before the date of the contribution.
  4. From 1 July 2013, employees over 70 will be entitled to super guarantee payments from their employer.
  5. This deduction cannot create a tax loss, i.e. the person must have derived income from employment or business (excluding passive income) and the deduction cannot exceed that income.
  6. Effective 1 July 2017, the 10% condition is removed for the 2017-2018 and future financial years.
What are concessional contributions caps?

What are concessional contributions caps?

YearContribution cap
for ages below 50 years
Contribution cap
for ages 50 years and above
2006-2007n/an/a
2007-2008$50,000$100,000
2008-2009$50,000$100,000
2009-2010$25,000$50,000
2010-2011$25,000$50,000
2011-2012$25,000$50,000
2012-2013$25,000$25,000 ▲
2013-2014$25,000$25,000
2014-2015$30,000 ^$35,000
2015-2016$30,000#$35,000
2016-2017$30,000*$35,000
2017-2018$25,000$25,000
2018-2019$25,000**$25,000**

▲ If age 59 years or over on 30 June 2013, concessional contributions cap is $35,000.
^  If age 49 years or over on 30 June 2014, concessional cap is $35,000.
#  If age 49 years or over on 30 June 2015, concessional cap is $35,000.
*  If age 49 years or over on 30 June 2016, concessional cap is $35,000.
** From 1 July 2018 members can accrue any unused concessional contribution cap for a maximum of 5 years. However member can only make additional concessional contribution for any unused amount from 2019-2020 financial year, provided their total superannuation balance at the end of 30 June of the previous financial year is less than $500,000.

What are non-concessional contributions caps?

What are non-concessional contributions caps?

YearContribution cap
2006-2007$1,000,000
2007-2008$150,000
2008-2009$150,000
2009-2010$150,000
2010-2011$150,000
2011-2012$150,000
2012-2013$150,000
2013-2014$150,000
2014-2015$180,000
2015-2016$180,000
2016-2017$180,000
2017-2018$100,000#
2018-2019$100,000#

# Individual with a total superannuation balance of > $1.6 million as at 30 June of the previous financial year will no longer be eligible to make non-concessional contributions and government co-contributions. Refer to contributions table below if the individual triggers bring forward contribution from 1 July 2017.

What is bring forward contribution cap?

What is bring forward contribution cap?

From 1 July 2017, the bring forward contribution cap amount and period is dependent on member’s total superannuation balance at 30 June of the previous financial year.

Total superannuation balance on 30 June of the previous financial yearNon-concessional contribution cap for the first yearBring forward period
< $1.4M$300,0003 years*
$1.4M to below $1.5M$200,0002 years*
$1.5M to below $1.6M$100,000None available but the member can contribute up to the general non-concessional cap
$1.6M or overNilN/A

* If member has triggered the bring forward rule and has not used up all the bring forward cap, member can contribute the remaining of the bring forward cap in subsequent years provided their total superannuation balance at 30 June of the previous financial year is below the general transfer balance cap.

What is the Superannuation Guarantee Maximum Contribution base per quarter?

What is the Superannuation Guarantee Maximum Contribution base per quarter?

YearContribution cap per quarter
2006-2007$35,240
2007-2008$36,470
2008-2009$38,180
2009-2010$40,170
2010-2011$42,220
2011-2012$43,820
2012-2013$45,750
2013-2014$48,040
2014-2015$49,430
2015-2016$50,810
2016-2017$51,620
2017-2018$52,760
2018-2019$54,030
What is transfer balance cap?

What is transfer balance cap?

From 1 July 2017, transfer balance cap applies as the maximum amount each member can transfer into retirement phase. Individual’s transfer balance cap is linked to general transfer balance cap.

YearGeneral Transfer Balance Cap
2018-2019$1,600,000*
2017-2018$1,600,000*

*Member’s transfer balance cap is equal to the general transfer balance cap.

What is the preservation age?

What is the preservation age?

Date of birthPreservation age
Before 1 July 196055
1 July 1960 - 30 June 196156
1 July 1961 - 30 June 196257
1 July 1962 - 30 June 196358
1 July 1963 - 30 June 196459
From 1 July 196460
What is ‘basic conditions of release’?

What is ‘basic conditions of release’?

Retirement
  • Preservation age to age 60 – must be permanently retired
  • Age 60-64 – ceased employment after attaining age 60
Attaining age 65
Other
  • Terminal medical condition
  • Permanent incapacity
  • Temporary incapacity
  • Death
  • Compassionate grounds
  • Severe financial hardship
  • Temporary resident departing Australia permanently
Conditions of release (other than Transition to Retirement Income Streams (TRIS))

Preservation ageCondition of releaseBenefits
55 to 60 years + Permanently retired= Benefits can be accessed
60 to 65 years + Permanently retired or not = Benefits can be accessed
Over 65 yearsNo other condition or restriction to comply
What is minimum annual pension?

What is minimum annual pension?

Age group2007-20082008-2009
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
Under 654%4% (2% *)4% (3% **)4%
65 - 745%5% (2.5% *)5% (3.75% **)5%
75 - 796%6% (3% *)6% (4.5% **)6%
80 - 847%7% (3.5% *)7% (5.25% **)7%
85 - 899%9% (4.5% *)9% (6.75% **)9%
90 - 9411%11% (5.5% *)11% (8.25% **)11%
95+14%14% (7% *)14% (10.5% **)14%

NOTES:
No maximum limit applies for account-based pensions (other than balance of account), 10% max limit applies to Transition to Retirement Pensions.
* For 2008/09, 2009/10 and 2010/11 financial years the minimum limits has been reduced by 50%.
** For 2011/12 and 2012/13 financial years the minimum limit has been reduced by 25%.

What tax is payable on pension payments from taxed fund?

What tax is payable on pension payments from taxed fund?

Age groupTax payable
60 and overNot assessable, not exempt income*
Below preservation age- Taxed at marginal rates with no tax offset
- Tax offset of 15% is available if a disability super benefit
Over preservation age and under 60Taxed at marginal rates with 15% tax offset
Over 60All benefits tax-free

IMPORTANT NOTE:
Superannuation benefit payment from untaxed funds (i.e.: GESB) in pension and/or lump sum form are subject to different tax rates and may NOT be completely tax-free to individuals over age 60.
* From 1 July 2017, if members are receiving capped defined benefit income streams (including lifetime pensions/ annuities, life expectancy pensions/ annuities existing prior to 1 July 2017 and market-linked pensions/annuities existing prior to 1 July 2017) and the annual pension payment is more than the defined benefit income cap, 50% of the excess amount is taxed at members’ marginal rate.

YearDefined benefit income cap
2017-2018$100,000
2018-2019$100,000
What are low-rate cap amounts for SMSF lump sum withdrawals?

What are low-rate cap amounts for SMSF lump sum withdrawals?

YearAmount
2007-2008$140,000
2008-2009$145,000
2009-2010$150,000
2010-2011$160,000
2011-2012$165,000
2012-2013$175,000
2013-2014$180,000
2014-2015$185,000
2015-2016$195,000
2016-2017$195,000
2017-2018$200,000
2018-2019$205,000
What are tax rates on lump sum superannuation benefit payments from taxed funds?

What are tax rates on lump sum superannuation benefit payments from taxed funds?

Age of taxpayer at date of payment(1)
Tax-free component
(2)
Taxable component
(Element taxed in the fund)
Below preservation age0%20% (excluding Medicare Levy)
Preservation age - 59
- up to low-rate cap
- amount over low-rate cap
0%

0%
15% (excluding Medicare Levy)
60 and over0%0%

(1) Tax Free Component includes total of Undeducted Contributions, Pre-July 1983 Component, CGT Exempt Component, Concessional Component and Post-June 1994 Invalidity Component crystallised as at 1 July 2007 plus subsequent non-concessional contributions.
(2) Taxed component equates to the value of the superannuation interest less the Tax-Free Component. The total entitlement of an individual in a SMSF is treated as one interest (excluding the balance attributable to an income stream that has begun to be paid from the SMSF).

IMPORTANT NOTE:
Superannuation benefit payment from untaxed funds (i.e.: GESB) in pension and/or lump sum form are subject to different tax rates and may NOT be completely tax-free to individuals over age 60.

What are the resident marginal tax rates?

What are the resident marginal tax rates?

Income 2006-2007Tax on this income
$0 - $6,000Nil
$6,001 - $25,00015c for each $1 over $6,000
$25,001 - $75,000$2,850 plus 30c for each $1 over $25,000
$75,001 - $150,000$17,850 plus 40c for each $1 over $75,000
$150,001 and over$47,850 plus 45c for each $1 over $150,000
Income 2007-2008Tax on this income
$0 - $6,000Nil
$6,001 - $30,00015c for each $1 over $6,000
$30,001 - $75,000$3,600 plus 30c for each $1 over $30,000
$75,001 - $150,000$17,100 plus 40c for each $1 over $75,000
$150,001 and over$47,100 plus 45c for each $1 over $150,000
Income 2008-2009Tax on this income
$0 - $6,000Nil
$6,001 - $34,00015c for each $1 over $6,000
$34,001 - $80,000$4,200 plus 30c for each $1 over $34,000
$80,001 - $180,000$18,000 plus 40c for each $1 over $80,000
$180,001 and over$58,000 plus 45c for each $1 over $180,000
Income 2009-2010Tax on this income
$0 - $6,000Nil
$6,001 - $35,00015c for each $1 over $6,000
$35,001 - $80,000$4,350 plus 30c for each $1 over $35,000
$80,001 - $180,000$17,850 plus 38c for each $1 over $80,000
$180,001 and over$55,850 plus 45c for each $1 over $180,000
Income 2010-2011Tax on this income
$0 - $6,000Nil
$6,001 - $37,00015c for each $1 over $6,000
$37,001 - $80,000$4,650 plus 30c for each $1 over $37,000
$80,001 - $180,000$17,550 plus 37c for each $1 over $80,000
$180,001 and over$54,550 plus 45c for each $1 over $180,000
Income 2011-2012Tax on this income
$0 - $6,000Nil
$6,001 - $37,00015c for each $1 over $6,000
$37,001 - $80,000$4,650 plus 30c for each $1 over $37,000
$80,001 - $180,000$17,550 plus 37c for each $1 over $80,000
$180,001 and over$54,550 plus 45c for each $1 over $180,000

The above rates do not include the flood levy.

Income 2012-2013Tax on this income
$0 - $18,200Nil
$18,201 - $37,00019c for each $1 over $18,200
$37,001 - $80,000$3,572 plus 32.5c for each $1 over $37,000
$80,001 - $180,000$17,547 plus 37c for each $1 over $80,000
$180,001 and over$54,547 plus 45c for each $1 over $180,000
Income 2013-2014Tax on this income
$0 - $18,200Nil
$18,201 - $37,00019c for each $1 over $18,200
$37,001 - $80,000$3,572 plus 32.5c for each $1 over $37,000
$80,001 - $180,000$17,547 plus 37c for each $1 over $80,000
$180,001 and over$54,547 plus 45c for each $1 over $180,000

The above rates do not include the Medical levy of 1.5%.

Income 2014-2015Tax on this income
$0 - $18,200Nil
$18,201 - $37,00019c for each $1 over $18,200
$37,001 - $80,000$3,572 plus 32.5c for each $1 over $37,000
$80,001 - $180,000$17,547 plus 37c for each $1 over $80,000
$180,001 and over$54,547 plus 47c** for each $1 over $180,000

** Including the Temporary Budget Repair Levy. The above rates do not include the Medical levy of 2%.

Income 2015-2016Tax on this income
$0 - $18,200Nil
$18,201 - $37,00019c for each $1 over $18,200
$37,001 - $80,000$3,572 plus 32.5c for each $1 over $37,000
$80,001 - $180,000$17,547 plus 37c for each $1 over $80,000
$180,001 and over$54,547 plus 47c** for each $1 over $180,000

**Including the Temporary Budget Repair Levy. The above rates do not include the Medical levy of 2%.

Income 2016-2017Tax on this income
$0 - $18,200Nil
$18,201 - $37,00019c for each $1 over $18,200
$37,001 - $87,000$3,572 plus 32.5c for each $1 over $37,000
$87,001 - $180,000$19,822 plus 37c for each $1 over $87,000
$180,001 and over$54,232 plus 47c** for each $1 over $180,000

**Including the Temporary Budget Repair Levy.
The 2% Temporary Budget Repair Levy will expire at the end of the 2017 income year, returning the effective top marginal tax rate to 45%.
The above rates do not include the medical levy of 2%.

Income 2017-2018Tax on this income
0 – $18,200Nil
$18,201 – $37,00019c for each $1 over $18,200
$37,001 – $87,000$3,572 plus 32.5c for each $1 over $37,000
$87,001 – $180,000$19,822 plus 37c for each $1 over $87,000
$180,001 and over$54,232 plus 45c for each $1 over $180,000

The above rates do not include the Medicare levy of 2%.
The temporary budget repair levy ceased applying from 1 July 2017.

Income 2018-2019Tax on this income
0 – $18,200Nil
$18,201 – $37,00019c for each $1 over $18,200
$37,001 – $90,000$3,572 plus 32.5c for each $1 over $37,000
$90,001 – $180,000$20,797 plus 37c for each $1 over $90,000
$180,001 and over$54,097 plus 45c for each $1 over $180,000

The above rates do not include the Medicare levy of 2%.