These days we all invest in Superannuation. Since the
introduction of the Superannuation employer guarantee scheme in
1992, employers must withhold from salary earners' pay-packets
a prescribed percentage (currently 9.5% per centum) of their gross
employment remuneration and remit that money to either:
an industry superannuation fund established for the particular
benefit of members of specific industries;
a retail superannuation fund operated by large insurance
companies or financial institutions with investment businesses e.g.
Colonial First State, AMP, National Mutual Bank; or
the employee's Self Managed Superannuation Fund
Subject to defined limits, every employee may salary sacrifice
their before tax wages as a "concessional" contribution
or pay their after tax money as a "non-concessional"
contribution into their superannuation fund. A concessional
contribution may be claimed as a deduction in the member's tax
return in the fiscal year it is made but a non-concessional
contribution cannot be claimed as a deduction. If the concessional
payment is made by the employee's employer by way of salary
sacrifice, the maximum tax on that concessional payment is
effectively 15% which is paid by the superannuation fund, not the
employee. Subject to age restrictions, the non-concessional
contribution for the 2015/16 year is limited to $180,000 or
$540,000 if paid in one year in respect of 3 years and the employee
is under age 65 –
see the ATO Fact Sheet NAT 74548 on the ATO's website for
details regarding the prescribed restrictions on concessional and
non-concessional contributions to superannuation funds.
Once money is in a superannuation fund, it is beyond the
ownership and control of the employee. For this reason when making
a Will a person should give separate consideration to how to treat
their superannuation but in a way which will not prejudice the
people to whom they would normally provide for under their Will. It
is essential to remember that a person's benefits in a super
fund pass in accordance with the terms of the super fund trust deed
and will not pass under a person's will unless the trustee pays
those benefits into that person's estate in accordance with the
terms of the super fund trust deed.
The Superannuation Industry (Supervision) Act 1993
(SIS Act) and its regulations set out rules which
must be observed by the trustee of a superannuation fund,
especially at the time those funds are being distributed after the
death of a member – see the ATO website for details in this
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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