Generally you can only access your superannuation when you retire at the minimum age set by law. This is called preservation.
However, individuals are not required to take their super as a lump sum, pension or combination when they retire. Instead, benefits can remain within the superannuation system indefinitely. This change applies retrospectively from 10 May 2006.
The Superannuation Guarantee
In Australia, it is compulsory for employers to contribute to the superannuation savings of their full-time, part-time and casual employees who meet the conditions set out below. These compulsory employer payments are called Superannuation Guarantee (SG) contributions.
An annual limit of $50,000 p.a. at a concessional tax rate of 15%, applies to SG and other employer contributions. Contributions above $50,000 are taxed at 46.5%. Members aged 50 years or over are entitled to a higher limit of $100,000 p.a. at the concessional tax rate until 1 July 2012, when the limit will revert to $50,000 p.a. regardless of age.
Employees who receive SG contributions must:
- Be under 70 and over 18 years of age,
- Work more than 30 hours per week if you are under 18 years of age, and
- Earn $450 or more in a month.
If you are paid under an Award, it may require your employer to contribute superannuation at the level stated in the Award no matter what you earn or what age you are.
How much are Superannuation Guarantee contributions worth?
For most employees, SG contributions are currently set at the equivalent of 9% of ordinary-time earnings and must be paid into a complying superannuation fund.
This money is not taken out of an employee's wage or salary – it is paid in addition to their wage or salary.
Other contributions to your superannuation
You can also contribute to your superannuation as:
From 1 July 2007, an annual limit of $50,000 p.a. at a concessional tax rate of 15%, applies to before-tax contributions (SG and salary sacrifice amounts) made to super. Contributions above $50,000 are taxed at 46.5%.
Members aged 50 years or over from 1 July 2007 are entitled to a higher limit of $100,000 p.a. at the concessional tax rate until 1 July 2012, when the limit will revert to $50,000 p.a. regardless of age.