Taxation of Superannuation Benefits
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Tax treatment of Lump Sum Benefits (excluding lump sum death benefits)

Member’s Age at payment date

Tax Component

Tax Treatment*

Under preservation age

Tax-Free

Tax Free

Taxable - taxed element

22%*

Preservation age to age 59

Tax-Free

Tax Free

Taxable - taxed element

Nil up to low rate cap amount

17%* above low rate cap amount

Age 60 and over

Tax-free

Tax free

Taxable – taxed element

Tax free

* Includes a Medicare levy of 2%.

Low rate cap amount

Income Year

Cap Amount

 
                                       2016-17


$195,000 
 
                                       2015-16


$195,000

 2014-15


$185,000 

2013-14

$180,000

2012-13

$175,000

2011-12

$165,000

2010-11

$160,000

2009-10

$150,000

Tax treatment of Pension Benefits (excluding Death Benefit Pensions)

Member’s Age at payment date

Tax Component

Tax Treatment

Under preservation age

Tax-Free

Tax Free

Taxable - taxed element

Taxed at marginal tax rates* with no tax offset

Tax offset of 15% available if paid as disability pension

Preservation age to age 59

Tax-Free

Tax Free

Taxable - taxed element

Taxed at marginal tax rate* less 15% tax offset

Age 60 and over

Tax-free

Tax free

Taxable – taxed element

Tax free

Tax treatment of Lump Sum Death Benefits

Beneficiary Type

Tax Component

Tax Treatment

Dependant for tax purposes

Tax-Free

Tax Free

Taxable - taxed and untaxed

Tax free

Non-tax Dependant

Tax-Free

Tax Free

Taxable - taxed element

17%*

Taxable – untaxed element

32%*

* Includes a Medicare levy of 2%.

Tax treatment of Death Benefits Pensions

From 1 July 2007 only dependants for tax purposes will be able to commence or continue a pension on death.

 Dependants for tax purposes include:

  • a current spouse (including de facto spouse and a same sex partner)
  • a child under 18 or under the age of 25 and financially dependent (the pension can continue to be paid after this age if the child is permanently disabled)
  • any person who was financially dependent or in an interdependency relationship with the deceased at the date of the member’s death

The tax treatment for these beneficiaries will depend upon the age of the deceased (at death) or the age of the recipient (at the date of payment), as follows:

Age of deceased/recipient

Tax Component

Tax Treatment

If either aged 60 or over

Tax-Free

Tax Free

Taxable - taxed element

Tax Free

If both under age 60

Tax-Free

Tax Free

Taxable - taxed element

Taxed at marginal tax rate* less 15% offset

*The income will be tax-free once the recipient reaches age 60.



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