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Taxation
Taxation rules are quite complex and can vary according to individual circumstances. It is important for you to seek advice at the time you become entitled to a benefit. When you are paid a lump sum, you will receive a cheque, a statement giving all the relevant details and, an ETP Payment Summary which details the tax deducted from your benefit. This paperwork should be retained for your personal taxation return.
Tax File Number
To ensure that your benefit will be taxed at concessional rates, you need to provide your Tax File Number (TFN) to the Trustee when you apply for membership. It is optional to advise of your TFN, but if it is not provided you will be taxed at a higher rate than the concessional tax rate.
Superannuation Contributions Surcharge
For the 2004 / 2005 financial year, a superannuation surcharge will apply on all employer contributions (including salary sacrifice contributions) where employer contributions plus adjusted
taxable income exceeds $99,710. The additional tax will be nil for members with a total taxable income plus employer contributions of $99,710 or less, and increases up to a maximum of 12.5% for members with a taxable income plus employer contributions of $121,075 or more. The dollar limits are indexed annually by the change in Average Weekly Ordinary Time Earnings (AWOTE). Any Superannuation Contributions Surcharge levied by the Australian Taxation Office is debited to the member account balance.
Legislation
has been passed by the Government to abolish
Superannuation Contribution Surcharge from
1 July 2005.
Reasonable Benefit Limits
The Reasonable Benefit Limit (RBL), is the limit set by the Federal Government on the amount of your benefit that can be taxed at the concessional rate available to superannuation benefits. If your benefit exceeds the RBL, the excess can be received but it will be subject to tax at higher rates. The Federal Government's preservation regulations are designed to ensure that some or all of a person's superannuation benefits are kept for use in retirement. This means that part or all of your benefits may not be paid in cash until you either:
Reach age 65;
or
Retire permanently from the work force at or after your preservation age (see Preservation); or
Leave employment at or after age 60;
or
Become totally and permanently disabled;
or
Die;
or
The Trustee is satisfied that special circumstances exist and approves the early release of your benefit, (eg in cases of severe financial hardship).
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