Government changes to Australian superannuation

From 1 July 2007 the Government reforms of the Australian superannuation take effect. The changes will affect retirement incomes, taxation of super, super contributions by individuals and employers, and when and how you can access your superannuation.

The big picture

• If you are 60-plus you will pay no tax on your super payout if you are in a taxed super fund (workers)

• If you are self-employed you will be able to claim all of your super contributions as a tax deduction

• If you are more than 60 years old and want to work part-time you can take part of your super as regular income, tax-free, and use it to top up your take-home pay
• Combining multiple super accounts into one fund will be simplified

The main changes

• You will not have to pay tax on your superannuation whether you take it as a lump sum or as regular income. Your superannuation income does not have to be declared on your tax return.

• The rate of tax for people with untaxed super will be reduced for people in the new super plan, if taken after the age of 60.

• Under the old system, once you reached 65 and were no longer working you had to start drawing on your super. The new system allows you to leave your super alone, continue earning an income and making contributions to it until the age of 75.

• Under the current rules, people miss out on a Government pension because of the value of their savings or assets. From 20 September 2007, this will change so that more people are eligible for a Government pension, and many currently on a pension can expect an increase in benefits.

• Under the old plan, self-employed people could only claim a deduction for part their super contributions. Now the self-employed can claim all of their contributions and the Government’s Super Co-Contribution will be available to the self-employed.

• You only have to fill in one form (instead of multiple) when seeking lost super.

To make sure you are paying the lowest rate of tax on your super contributions check that your employer has provided your tax file number to your super fund. This also helps make it easier to track lost funds later on if your situation changes. For more information about the superannuation changes call the helpline on 13 10 20 or go to www.australia.gov.au/bettersuper.