Senator the Hon Nick Sherry, Minister for Superannuation and
Corporate Law, today released a consultation paper on payment
of temporary residents' superannuation to the
Under the measure, future superannuation contributions and
existing balances of temporary residents will be paid to the
This measure was announced by the previous government with a
start date of 1 July 2008.
However, the Rudd Government will now defer the start date
to the date of Royal Assent (expected before the end of 2008)
to allow consultation on administrative issues.
Temporary residents are currently able to claim their
superannuation after permanently departing Australia by
applying for a Departing Australia Superannuation Payment
(DASP) from their superannuation fund.
The DASP is the value of their superannuation minus tax
30 per cent for the taxed element of a benefit; and
40 per cent for an untaxed element.
Outline of new measures
From the date of Royal Assent, all superannuation
contributions and superannuation balances held for former and
current temporary residents (both existing balances and those
accruing in the future) will be paid to the Australian
Employers will still be required to pay superannuation
guarantee (SG) contributions for temporary residents.
Employers will have the option of sending employer
contributions to a superannuation fund to meet their SG
obligations (as they do currently) or directly to the
Australian Taxation Office (ATO).
On an annual basis the Federal Government, through the ATO
and the Department of Immigration and Citizenship will data
match using contribution information and temporary resident
information to identify superannuation funds that hold balances
for temporary residents.
The ATO will notify the funds and the funds will then be
required to pay balances to the ATO within a specified time
Temporary residents who permanently depart Australia will be
able to claim back superannuation that had been paid to the ATO
by making a claim to the ATO within five years of permanent
departure (subject to existing withholding tax
Amounts not claimed within five years will be
Interest will not be paid on amounts held by the ATO.
Where a temporary resident becomes a permanent resident of
Australia, the amount of their superannuation paid to the
Australian Taxation Office will be able to be reclaimed with
interest (generally by being paid back into a superannuation
Employers will still be required to make superannuation
contributions for their temporary resident employees under the
SG legislation and will still be able to meet this obligation
by making contributions to superannuation funds. However,
consideration is also being given to providing employers with
the option of making employer contributions for temporary
residents direct to the ATO.
It is proposed that the measure apply in respect of all
future, current and previous temporary residents, other than
New Zealanders and those who have become permanent
Comment is sought on whether it is necessary to provide this
additional option for employers to pay contributions to the
ATO, or if it will be sufficient and simpler to only provide
for ongoing contributions to superannuation funds (which will
later pay those amounts to the ATO).
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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