What is Superannuation?
Superannuation, or “Super,” is Australia’s pension fund system. It was introduced in 1992 and is paid by employers into an investment fund.
Who is entitled to Superannuation?
All workers over the age of 18 or even minors who work more than 30 hours per week are entitled.
Super is a long-term investment that grows over time.
The more you contribute during your working life, the more you will have for retirement.
Super starts when you begin working, and your employer begins contributing a percentage of your salary—currently 11.5%—into your super fund.
The employer pays the super in addition to your salary.
You can make voluntary contributions up to a maximum limit.
In general, you can choose in which fund to invest your super and how.
You must keep track of your super by checking that your employer is paying the correct amount and ensuring that it is invested efficiently, as the chosen fund invests and manages this money until your retirement.
Unless under very limited circumstances, you cannot withdraw money from your super or begin drawing income until you reach retirement age.
Penalties and fees apply for accessing super illegally.
In this regard, the ATO (Australian Taxation Office) plays an important role, working with super funds, employers, and other government agencies to manage the key elements of the Australian pension system. Specifically, the ATO:
- Provides super fund members with information and tools to track their super and rights.
- Monitors the use of tax concessions on pension funds to ensure a high level of compliance.
- Supports employers in meeting their superannuation obligations.
- Regulates and supports self-managed super funds to ensure they are legally managed for retirement savings.
Early Access to Super:
In very limited circumstances, you can access your super early:
- For medical, compassionate, hardship, or incapacity reasons.
- Under the First Home Super Saver Scheme, to withdraw voluntary contributions made to your super.
- If you are a temporary resident leaving Australia.
- If your super balance is less than $200 and your employment has ended, or if you have a “lost super” account with a balance less than $200.
More about Temporary Residents Leaving Australia:
If you worked in Australia on a temporary visa, you may have accumulated superannuation contributions made by your employer according to the applicable laws.
You may be entitled to receive (after tax) this amount (and any interest accrued and other contributions) as a final payment from the Australian superannuation fund (DASP – Departing Australia Superannuation Payment) after leaving.
You can apply for the DASP if you meet all the following criteria:
- You have earned superannuation contributions during your work in Australia on a temporary resident visa issued under the Migration Act 1958 (excluding subclasses 405 and 410).
- Your visa is no longer valid (expired or cancelled).
- You have left Australia and are not holding any other active Australian visa.
- You are not an Australian or New Zealand citizen, or a permanent resident of Australia.
Although you cannot apply for the DASP until you have left Australia, we strongly recommend gathering all necessary information and starting your application before departure. It may be difficult to initiate the process after you leave.
How to Track Superannuation Contributions?
If you have worked for more than one employer, you may have multiple superannuation accounts, possibly with different super funds.
If you are unsure about which super fund your contributions have been paid into, you can search:
- By using the DASP online application system after meeting the eligibility requirements and providing your TFN.
- By using ATO online services or the ATO app (after creating an account on myGov and linking it to the ATO).
Employers are required to pay superannuation contributions quarterly, so you should check with your employer to ensure all contributions have been paid before submitting your application.
If you haven’t applied for the DASP, your super fund will transfer the accrued amount to the ATO as unclaimed super contributions if:
- Six months or more have passed since you left Australia.
- Your visa is no longer valid.
You may be able to request ATO-held super (the amount of super held by the ATO) as DASP.
Super Contribution Amounts of $5,000 or More:
If your super contributions amount to $5,000 or more, your super fund will require certified copies of your identification documents.
For super contributions of $5,000 or more, paper applications to super funds may require a Certification of Immigration Status from the Department of Home Affairs, which incurs a fee for issuance. It will be sent to you by email and to the super funds you nominate.
Super Contributions Below $5,000:
For super amounts below $5,000, you can prove that you left Australia and your visa expired without completing the Certification of Immigration Status.
Check with your super fund to see what is required. However, if you are unable to provide such proof, the super fund may request a Certification of Immigration Status from Home Affairs before proceeding with your application.
If you held a Working Holiday Maker (WHM) visa and didn’t apply for a Certification of Immigration Status from Home Affairs, you’ll need to provide your visa information in your paper application.
This information will be compared with Home Affairs data, and your application might take longer to process if the details do not match.
How and When DASP is Paid:
Your DASP will generally be paid within 28 days of receiving the complete application. It may take longer if you submit an incomplete application or are required to submit additional supporting documents.
There are three payment options:
- Electronic funds transfer (EFT) to an Australian bank account.
- Cheque in Australian dollars.
- International money transfer (IMT) – only for super fund applications.
Not all super funds offer IMT.
Fees and charges may apply (including currency conversion), so check with your fund to see which payment options are available.
EFT is usually the most efficient payment method, and we recommend keeping your Australian bank account open to receive the DASP payment.
Check with your Australian bank to see if they can arrange the transfer to an account in your home country.
How DASP is Taxed:
When paid, a final tax is withheld from the DASP.
The payment may consist of two components, one taxable and the other tax-exempt.
Different tax rates apply to Working Holiday Maker (WHM) visa holders.
The payer of the DASP must provide a summary of the DASP payment within 14 days of making the payment.
The summary will indicate the amount of tax withheld from the DASP and the amount paid.
How Tax Rates are Calculated:
The DASP tax rate will be determined by each super fund individually, as each fund makes a separate payment.
Each super fund will assess your application and determine the tax rate based on the information it holds about your contributions.
Do Not Include DASP in Your Tax Return:
DASP is not considered taxable income for Australian tax purposes.
A final tax is withheld from the DASP when it is paid, and this amount should not be included in your tax return either.
Source: www.ATO.gov.au
