Compensation for insurance tax benefit error

AustralianSuper claims a tax deduction on the cost of insurance cover and passes the benefit on to members that have amounts deducted from their superannuation account for the cost of insurance premiums. The benefit of the tax deduction for insurance costs is provided back to members’ individual super accounts by reducing the contribution tax amount calculated as being applicable to and deducted from their account.

In these FAQs we refer to the benefit arising from the tax deduction as the “tax benefit”.

For certain AustralianSuper Select plans, employers paid costs for the default Death and Total and Permanent Disablement insurance cover provided to members with accounts in those plans. These members were also able to apply for additional cover. Where members applied for and received additional cover, the insurance premium costs would be deducted from their accounts.

We’ve found that during the period between 1 July 2017 and 13 June 2024, the tax benefit was not always applied to the accounts of certain AustralianSuper Select plan members in relation to insurance premium costs deducted from those accounts for additional Death and/or Total and Permanent Disablement (TPD) insurance cover that was provided with the membership.

The error didn’t arise in relation to insurance premiums which were paid for by those members’ employers.

The amount of Government Tax set out in some annual and/or exit statements issued to members that were provided with the additional Death and/or TPD insurance cover during the period 1 July 2017 to 30 June 2024 may have been overstated, because the tax benefit had not been applied.

For members that still have a current AustralianSuper account, the Government Tax stated in annual statements or exit statements issued for the financial year ending 30 June 2025 (for annual statements) or during that financial year (for exit statements) and onwards will include the tax benefit.

The error was corrected effective 13 June 2024.

AustralianSuper is now making compensation payments to return the affected accounts of the AustralianSuper Select plan members to the position the accounts would have been in, or as close as possible to that position had the error not occurred.

The compensation payment includes the tax benefit that should have been applied to the members’ accounts, as well as an amount for loss of earnings and additional interest.

We’re sorry for this error, please be assured we continue to review our processes and systems to prevent issues like this occurring in the future.

If you’ve received a correction letter for your information only, this is because the contribution tax transactions affected by the error were corrected in your account during the period you held the additional cover. The corrections to the contribution tax transactions represent the tax benefit that you were entitled to receive, returning your account to the position it would have been had the error not occurred. In addition to the contribution tax corrections, the appropriate earnings and interest were also applied to your account.

We’re writing to let you know about the error and to confirm that an adjustment was made to your account to apply the tax benefit.

As noted in the question above Why have I received, or why will I be receiving, a compensation payment?, AustralianSuper claims a tax deduction on the cost of insurance and passes the benefit onto members that are provided with insurance cover, where the costs for the insurance cover are deducted from members’ accounts (tax benefit). The benefit of the tax deduction for insurance costs is provided back to members’ individual super accounts by reducing the contribution tax amount calculated as applying to their account.

The amount of Government Tax and the Investment Returns amounts stated on annual statements issued to members during the period additional cover was held may have been incorrect. The amounts stated on annual statements won’t reflect the corrections because they were made to your account after the annual statements were issued.

For members that still have a current AustralianSuper account, the Government Tax stated in periodic statements issued from 30 June 2025 and onwards will include the tax benefit.

We’re sorry for this error and delay in letting you know. Please be assured we continue to review our processes and systems to prevent issues like this occurring in the future.

The calculation of the payment aims to restore your account to the financial position it would’ve been in, or as close as possible to that position, had the error not occurred. That is, the position your account would have been in had the tax benefit been applied to reduce the contribution tax applied to your account

Your compensation payment is comprised of:

1. Financial Loss Amount – is the benefit of the tax deduction that should have been applied to the members’ accounts,
2. Loss of Earnings, and
3. Additional Interest.

1. Financial Loss Amount, is the amount of tax benefit that was not applied to your account. It is determined by calculating the difference between the amount of contribution tax deducted from your account and the amount of contribution tax that should have been deducted had the tax benefit been correctly applied.

The correct amount of contribution tax you should have paid, is calculated using the formula:

Contribution Tax = (Concessional Contributions received - Insurance Premiums) x 15%

If the amount of contribution tax you paid was greater than it should have been, the difference is the Financial Loss Amount.

2. Loss of Earnings (or Foregone Returns) is to compensate you for investment earnings or returns you could have received on the Financial Loss Amount, if the error hadn’t occurred:

• If your AustralianSuper Select account that was affected by the error is active, we’ve calculated the investment earnings or returns using the best performing investment option that applied to your/the account during the period 1 July 2017 to 13 June 2024. We’ve applied this for each month during which the error affected your/the members’ account(s) until the date we calculated the compensation payment.
• If the AustralianSuper Select account that was affected by the error is closed (including because the member has died or left the Fund), we’ve calculated the investment earnings or returns the account could have received using the best performing investment option that applied to the member’s account during period 1 July 2017 to 13 June 2024 until the date the account closed. From the date the account was closed we’ve then applied returns using the RBA Cash Rate +6%, compounded daily, until the date we calculated your compensation payment.

3. Additional Interest (or Returns) has been included in your compensation payment you’ve received or will receive, using the RBA Cash Rate +6%, compounded daily for 14 days from the calculation date to allow sufficient time for us to process the compensation payments.

If the super account that was affected by the error is still open in AustralianSuper, we’ll pay the compensation payment to that account.

If the super account that was affected by the error is closed but you have another account open in AustralianSuper, we’ll pay the compensation payment to that open account.

If your AustralianSuper benefit was transferred to an account in another super fund, we’ll pay the remediation payment to the other super fund. If you’d like the compensation payment paid to a different account, you can let us know by completing the Get your remediation payment form that was enclosed with the letter we sent you.

By law, we can only pay your compensation payment to you directly (via your nominated bank account) if you’ve met a condition of release with a nil cashing restriction. These include:

• turning age 65 (even if you’re still working),
• ceasing employment on or after age 60, and
• reaching preservation age and permanently retiring.

You can obtain more information about the conditions of release on the Australian Taxation Office (ATO) website (ato.gov.au).

If you have met a condition of release with a nil cashing restriction and would like the compensation paid to you directly please complete and return the Get your remediation payment form that was enclosed with the letter we sent you within 45 days from the date on your letter.

If you’d like the compensation payment made to a different super account or your bank account please complete and return the Get your remediation payment form, to us within 45 days from the date on your letter, by:

• scanning the completed and signed form and uploading it via the webpage australiansuper.com/upload-document; or
• posting the completed and signed form using the enclosed Reply Paid envelope.

How to upload your form via the webpage australiansuper.com/upload-document

• Type the webpage address in your browser, it will take you to ‘Upload a document’
• Scroll down to ‘Are you a Member, Non-Member or Employer’
• Here you’ll see ‘+ Drag files here’ to upload your scanned form and a section to enter your personal details.

If the super account that was affected by the error is still open, you’ll see the compensation payment appear as an ‘Account Adjustment’ transaction on 26 August 2025 when viewing in your account in the Member Portal.

If the super account that was affected by the error is closed but you have another account open in AustralianSuper, we’ll pay the compensation payment to that open account, and you’ll see the payment appear as an ‘Account Adjustment’ transaction on 26 August 2025 when viewing your account in the Member Portal.

If your benefit was transferred to another super account and the account that was affected by the error is closed, we’ll direct the compensation payment to the super fund to which your AustralianSuper benefit was transferred, unless you advise us otherwise by completing and returning the Get your remediation payment form enclosed with the letter we sent you. You have 45 days from the date on your letter to return the completed form to us.

If you are currently 65 years or older and your benefit was paid into a bank account, we’ll pay your compensation payment into that bank account unless you advise us otherwise by completing and returning the Get your remediation payment form enclosed with the letter we sent you. You have 45 days from the date on your letter to return the completed form to us.

If you meet a condition of release with a nil cashing restriction and would like the compensation paid to you directly, please complete and return the Get your remediation payment form by 45 days from the date on your letter. We’ll send you a letter and statement when your compensation payment is processed and confirm where it has been paid to.

If you are a beneficiary to a deceased member’s account, we’ll send you a letter and statement when the compensation payment is processed and confirm where it has been paid to.

We review our processes and systems regularly to ensure our members receive the service they expect and deserve.

We’re sorry for this error and the time it has taken to address it and compensate you.

Please be assured we will continue to review and improve our processes and systems to prevent issues like this occurring in the future.

Will the compensation payment count towards my non-concessional contributions cap? If so, what happens and where do I find more information?

Yes, your Total Remediation payment amount (comprised of Financial Loss Amount, Loss of Earnings and Additional Interest) will count towards your non-concessional contributions cap for the financial year ending 30 June 2026.

The Australian Taxation Office (ATO) has established a streamlined process for members who exceed their non-concessional contributions cap after receiving this payment.

If you believe you may exceed the non-concessional contributions cap because of this payment, you may wish to lodge an Application – excess contributions determination (NAT 71333) with the ATO for their consideration, to have this payment disregarded for the purposes of your non-concessional contributions cap. This application form can be accessed via the ATO’s website by entering QC 20122 into the search facility. If you decide to apply to have your compensation payment amount disregarded for the purposes of your non-concessional contributions cap, you need to include the following information with your application:

• the amount of the remediation payment received because of this error which has counted towards your non-concessional contributions cap
• a request to have this payment amount disregarded so that it does not count towards your non-concessional contributions cap/s for the relevant financial year/s
• a copy of the letter we sent you regarding your compensation payment.

Further information about non-concessional contributions, the non-concessional contributions cap and requesting to have non-concessional contributions disregarded or reallocated can be found on the ATO’s website by entering QC 23223, QC 73087 and QC 73090 into the search facility.

You can keep track of your non-concessional contributions by logging onto your myGov account, navigating to ATO online services and then selecting Super, then Information, then non-concessional contributions.

No, your current investment option(s) will not be changed.

If you have an active AustralianSuper account, the compensation payment amount will be invested in accordance with your current investment choice for future contributions. The payment will appear as an Account Adjustment in the transaction history of your active account.

If you have an active AustralianSuper account, your compensation payment amount has already been paid to this account.

If the account affected by the error is now closed, and you no longer hold an active account with AustralianSuper, on or about 61 days from the date of our letter, the payment will be made to the super account that your benefit payment was previously transferred to, unless you let us know you’d like it paid to another account by completing the Get your remediation payment form that was enclosed with the letter we sent you. You have 45 days from the date of the letter we sent you to return the completed form to us.

If you are currently 65 years or older and your benefit was paid into a bank account, on or about 61 days from the date of our letter, we’ll pay your compensation payment into that bank account unless you advise us otherwise by completing and returning the Get your remediation payment form enclosed with the letter we sent you. You have 45 days from the date on your letter to return the completed form to us.

If you have an active AustralianSuper account, your compensation payment amount has already been paid to this account so you don’t have to do anything to receive it.

If the account affected by the error is now closed, and you no longer have an active AustralianSuper account, your payment amount will be paid to the super account your benefit payment was transferred to unless you let us know that you’d like it paid to another account by completing the Get your remediation payment form that was enclosed with the letter we sent you. You have 45 days from the date on the letter we sent you to return the completed Get your remediation payment form to us.

If you are currently 65 years or older and your AustralianSuper benefit was paid into a bank account, we’ll pay your compensation payment into that bank account unless you advise us otherwise by completing and returning the Get your remediation payment form enclosed with the letter we sent you. You have 45 days from the date on your letter to return the completed form to us.

If you meet a condition of release with a nil cashing restriction and would like the compensation paid to you directly, please complete and return the Get your remediation payment form by 45 days from the date on your letter.

If you don’t meet a condition of release, you’ll need to complete and return the Get your remediation payment form by 45 days from the date on your letter.

If we’re unable to contact you and don’t hear from you or we find that the account that we made your benefit payment to is closed, we’ll transfer the payment to the Australian Taxation Office (ATO) as a Trustee Voluntary Payment (TVP) if the conditions for TVP are satisfied. Once transferred, you can claim this amount by calling the ATO on 13 28 65.

When we receive your completed form, we’ll aim to process your compensation payment within five business days. Once that process is completed, we'll send you a confirmation letter.

No, you don’t need to resubmit your previous financial years’ tax returns as a result of this error.

No, the additional insurance cover provided with your AustralianSuper Select account between 1 July 2017 and 13 June 2024 has not been affected by the error. The default insurance cover provided with your AustralianSuper Select account during this period is also not affected by the error.

If you have a claim in progress or make a claim for the period during which you held insurance cover through AustralianSuper, there is no impact as a result of this error. You will need to meet the conditions of the insurance Policy to make a successful claim on your insurance cover.

If you still hold the additional insurance cover, there is no impact to it as a result of this error.

No, there is no impact to the premiums you paid or continue to pay for additional insurance cover as a result of the error.

I’ve received a letter about an additional death benefit payment. What do I need to do and who can I talk to?

If you’ve received a letter notifying you about an additional death benefit payment with a Get your additional payment form enclosed, please complete the form with the nominated bank account details following the instructions, and return the signed form to us via email or post:

• scan the completed and signed form and email to RemDeceasedEstates@australiansuper.com, or
• post the completed and signed form using the enclosed Reply Paid envelope.

When completing the form, you will also need to provide the necessary certified identity documents (listed in the form) to verify your identity.

When we receive your completed form and the required documents, we need to successfully verify your identity. We’ll aim to pay the additional death benefit payment amount to the nominated bank account within five business days of verifying your identity. Once that process is completed, we’ll send you a confirmation letter.

Will the payment count towards my non-concessional payments cap?

No, your additional death benefit payment amount will not count towards your non-concessional contributions cap. It counts towards the non-concessional contributions cap of the impacted Deceased member.

I’m receiving a payment as a beneficiary. Will I pay tax on the payment?

Resident beneficiary
The compensation payment amount forms part of the death benefit. When it is paid to a beneficiary that is not a dependant for tax purposes, any taxable component of the payment will be subject to tax. Where it is paid to a beneficiary that is a dependant for tax purposes, it will be tax-free.

Where the payment is subject to tax, beneficiaries will be sent a PAYG payment summary within 14 days of payment which will show the amount of total tax withheld.

Non-resident beneficiary
Where the payment amount is paid to you as a beneficiary, and you are a foreign resident for Australian tax purposes, the payment will receive the same tax treatment as for a resident beneficiary (see directly above). This is because the payment is considered Australian sourced income. The main difference is that as a non-resident beneficiary, you should be exempt from the Medicare levy. However, if you have not provided a tax file number (TFN) to us, the amount may be taxed at a higher rate on any taxable component.

If your country of tax residency has a double tax agreement with Australia, there may be no Australian tax imposed on the payment. Beneficiaries need to check the taxation laws of their country and whether it has a tax treaty with Australia.

If a beneficiary isn’t contactable, what steps will AustralianSuper take?

AustralianSuper will make all reasonable attempts using various communication methods (letter, email and phone) to contact a beneficiary about their compensation payment and make payment.

If we are unable to make contact with the beneficiary after making at least three attempts, using all possible communication avenues, the compensation payment amount will be transferred to the Australian Taxation Office (ATO) as unclaimed money when it satisfies the conditions set out in the legislation. We process these transfers to the ATO every six months by 30 April and 31 October. Once transferred, the beneficiary can claim the unclaimed money from the ATO, by calling them on 13 10 20 or +61 2 6216 1111 (from overseas). For more information, refer to the Unclaimed super money received from super funds section of the ATO website.

Members or former members can call 1300 300 273 from 8am to 8pm AEST/AEDT weekdays.

Alternatively, you may wish to speak to a financial adviser if you have one.

As an AustralianSuper member, you can access a mix of advice options including general information, simple personal advice¹ over the phone or comprehensive personal financial advice¹ (which may incur additional costs). For details visit australiansuper.com/advice.

¹ Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd. Some personal advice may attract a fee, which would be outlined before any work is completed and is subject to your agreement. With your approval, the fee for advice relating to your AustralianSuper account may be deducted from your AustralianSuper account subject to eligibility criteria.

If you have a complaint, please discuss it with us by:

• calling 1300 300 273 8am to 8pm AEST/AEDT weekdays,
• emailing your complaint to us at complaints@australiansuper.com,
• filling in an online form at australiansuper.com/email, or
• writing to the Complaints Officer, AustralianSuper, GPO Box 1901, MELBOURNE VIC 3001.

We aim to address all complaints as soon as possible and generally within 45 days of receiving your complaint. However, you can ask your assigned Complaint Officer for an update at any stage.

If you are not happy with our response to your complaint, or if you have not received a response within 45 days, you can contact the Fund's external complaints resolution body, the Australian Financial Complaints Authority (AFCA). AFCA provides fair and independent financial services complaint resolution that is free to consumers. However, before raising a complaint with AFCA, we encourage members to utilise the complaints procedures of the Fund.

Australian Financial Complaints Authority
GPO BOX 3
MELBOURNE VIC 3001
Telephone: 1800 931 678
Email: info@afca.org.au
Website: afca.org.au