Archive for 'super'

What Course Of Action Could You Take For Your Super To Maximise The Balance?

There are plenty of ways to maximise your superannuation contributions prior to your retirement at any time of your life. As the means of funding your nomadic lifestyle, your seachange or your downtime after retiring, you want to make sure your superannuation is equipped to handle it.

The Australian Taxation Office recommends that you should check how you can maximise your super at the bare minimum of 10-15 years before the age that you hope to retire so that you have the time you need to make a difference to your final super balance.

So, if you were thinking of retiring at your preservation age (which is the age that you can access your super), your superannuation should reflect the amount that you want to be able to access to fund that retirement.

While starting earlier does mean it may be easier to accumulate what you need to retire by the time of it occurring, it doesn’t mean that there’s a cutoff date or a deadline to have contributions in for maximised profits.

Here are 3 simple ways that you can make a difference to your superannuation fund which could impact your balance for retirement in the long-term(and the sooner you try them, the better).


Your employer is required by superannuation law to contribute 10% of your taxable income to your super each year. This allows you to build up a steady balance as you work without having to actively contribute yourself.

However, if you have a position that pays well enough and allows you to do so, you may also be able to speak with your employer about arranging for some of your income to be ‘sacrificed’ to your superannuation, and contribute additionally to the balance yourself. These are known as concessional contributions.

So, for example, your employer may pay you $1,500 as your base salary pay. They also make the 10% contribution for your superannuation and pay $100 in tax. That leaves you with $1350. If you elect to salary-sacrifice, you might wish to pay $100 from your before-tax income. This means that instead of being taxed at a $1,500 base salary, you’ll only be taxed from the $1,400.

Track Down & Combine Your Accounts

There have been measures enacted to prevent additional super funds from being created for new employees who don’t elect to nominate a super fund – for those who may have existing multiple super accounts, it’s time to consolidate and combine them.

You can increase the rate that your super grows each year as a result of the compounding effect of additional funds and fewer fees, and ensure that your nest egg is nurtured by a provider that aims to grow. You just need to be sure to check that you don’t lose out on any benefits by transferring or consolidating to your chosen fund.

Tax & Super Can Work Great Together, If You Know How

If you are willing and ready to start saving, your superannuation can become a tax deduction gold mine (if you are eligible for the deductions that you are applying for.

One such deduction is the spousal contribution deduction.

If you make a contribution to your spouse’s super (and they earn less than $37,000 per year) any contributions that you make to their super can provide you with a tax rebate of up to $540. You can also claim back on any contributions that you may have made directly from your bank account to your super until you reach the contributions limit (known as a cap).

Discussing with a specialist or your super provider about the best course of action for you and your needs may be the step that you need to take to ensure the potential growth of your fund.

Posted on 12 December '21 by , under super. No Comments.

Super Can Be Confusing, But What Happens If You Develop Dementia?

Superannuation can be confusing at the best of times for the average Australian. However, for those experiencing the effects of dementia, or living with those affected by it, access to their superannuation can become a financial issue of great magnitude.

Dementia is not a specific disease, but rather a term that describes symptoms associated with more than 100 different diseases characterised by the impairment of brain function. The most common type of dementia that is often encountered is Alzheimer’s disease.

It occurs more frequently in the elder demographic than in the younger population but is indiscriminate in who it affects. However, with an increasing number of people looking at accessing their superannuation, and a rise in the number of Australians impacted by Alzheimer’s disease or dementia, it’s best to be prepared with the knowledge of what you must do.

When it comes to your superannuation, if your circumstances mark you as an eligible applicant, you may be able to claim a lump sum from your superannuation’s fund’s total and permanent disability (TPD) insurance.

You may be under the assumption that to access the benefits from TPD, you need to have suffered an accident, a workplace injury or have a critical terminal illness. However, you can claim for TPD and monthly income protection benefits from your super fund if you have any type of long-term illness that affects your ability to do your job (including young-onset Alzheimer’s or dementia).

You should get total and permanent disablement from your life insurance provider for a broad range of early-onset Alzheimer’s disease or dementia-related symptoms, including significant permanent impairment, loss of independence, cognitive decline, and other mental health effects.

Your life insurance provider will consider several factors when deciding whether you’re eligible to make a claim, including:

  • Whether your claim can be supported by a doctor or medical specialist.
  • Whether you’re receiving any treatment for dementia or Alzheimer’s disease, and the frequency of this treatment.
  • Whether your early-onset Alzheimer’s disease can be considered permanent.
  • How your capacity to work has been impaired or will be impaired by your symptoms as your disease progresses.
  • Whether you may be able to take on an adjusted job role or work in a new career.

If you successfully claim TPD insurance for early-onset Alzheimer’s or dementia, you should be given early access to your super. This money will be paid in a lump sum and will cover your day-to-day costs for the rest of your life. The amount of money you receive will depend on your specific circumstances.

What About If An SMSF Trustee Is Affected By Dementia/Alzheimer’s? 

In the case of an SMSF, legally, the loss of mental capacity for a trustee of an SMSF means that they can no longer make decisions as a trustee of the fund. The critical period for an SMSF is the time prior to diagnosis when the trustee may be making or not making decisions that would be in the best interest of the members of the fund.

There are four options that the trustees of this SMSF have:

  • They can retain the SMSF and appoint additional trustees to the fund who share trustee responsibility as they age (which would typically occur with adult children joining the fund).
  • The trustees of the SMSF can appoint an individual to take on trustee responsibility on his behalf under an enduring power of attorney.
  • The trustees of the SMSF can close the SMSF and rollover the fund to a public offer fund, with all ongoing administration and compliance of the fund reverting to a third-party trustee.
  • The SMSF trustee can convert the fund into a Small APRA Fund (SAF). A SAF offers the flexibility of an SMSF, without trustee responsibilities as an independent trustee is appointed to manage the trustee responsibilities on an individual fund basis and on an agreed fee basis.

It is most important to remember that if you have not appointed someone as your enduring power of attorney and you do lose mental capacity, then it is too late and you will need to apply to the court. It is always important to seek advice about appointing someone as your enduring power of attorney.

Posted on 7 December '21 by , under super. No Comments.

What Are Death Benefit Payments, And What Might They Mean For Your Super?

What happens to your super when you die? It might not be a question that has cropped up in many people’s minds, but it is something that you should be concerned about.

Upon the untimely death of someone, their superannuation may be one of the elements of the estate that can be bequeathed and divided between their loved ones (trustees of the estate and beneficiaries. 

This is not done through your will though, as it isn’t automatically included unless specific instructions have been given to your super fund. Often this is done through a binding death benefit nomination. These payments are usually paid out in lump sum payments and split between beneficiaries as dictated by the deceased.

However, like any property or asset that can be challenged, the death benefits from superannuation and SMSF can be a legal quandary if the appropriate succession planning measures have not been put into place.

Death benefits are one of the most commonly occurring legal issues that plague the superannuation and SMSF sector for individuals. Many court cases involving death benefits are the result of poor succession planning, as individuals who were not stated to be recipients of the payments miss out on what may be supposed to be theirs.

In the event of an individual’s death, the deceased’s dependent can be paid a death benefit payment as either a super income stream or a lump sum. The non-dependants of the deceased can only be paid in a lump sum. The form of the death benefit payment (and who receives it) will depend on the governing rules of your fund and the relevant requirements of the Superannuation Industry (Supervision) Regulations 1994 (SISR).

If succession planning around who the superannuation is to be left to is in place by the deceased, those who may be classed as dependents and non-dependents can become legally blurred.

In any event, dependents are defined differently depending on what kind of law they are being examined under (superannuation law and taxation law).

Under superannuation law, a death benefits dependant includes:

  • The deceased spouse or de facto spouse
  • A child of the deceased (any age)
  • A person in an interdependency relationship with the deceased (involved in a close relationship between two people who live together, where one or both provides for the financial, domestic and personal support of the other).

Under taxation law, a death benefits dependant includes:

  • the deceased’s spouse or de facto spouse
  • the deceased’s former spouse or de facto spouse
  • a child of the deceased under 18 years old
  • a person financially dependent on the deceased
  • a person in an interdependency relationship with the deceased

Depending on the type of law that the beneficiary is classified under affects how they can interact with the death benefits.

How Do I Make Sure My Beneficiaries Will Receive The Death Benefits That I Want Them To Have? 

Death benefit payments need to be nominated by the holder of the superfund, as superannuation is not automatically included in your will. If you fail to make a nomination, your super fund may decide who receives your super money regardless of who is in your will.

That’s why succession planning is important when it comes to death benefits, no matter the situation. Even if you are at your healthiest, you’ll want to be prepared for any eventuality.

To get your succession planning right, here are 5 tips that will help you during the process.

    • Locate and/or consolidate your superannuation funds – if you do not consolidate your funds, ensure that there is a binding death benefit nomination (BDBN) in place for each fund.
    • Prepare a BDBN – this is a notice given by you as a member of a superannuation fund to the trustee of your super fund, nominating your beneficiaries on your death and how you wish for the death benefits to be paid.
    • Seek advice before making changes to your level or type of insurance cover – you may be compelled to disclose medical conditions which may impact your ability to obtain cover or impact the cost of your cover if you remove or change your insurance cover.
    • Review your binding death benefit nomination (BDBN) each year during tax time
    • Seek advice on a superannuation clause under your will – though superannuation is not an estate asset, the death benefit may be paid to the estate under certain conditions, which you should consult with a super professional about.

Posted on 21 November '21 by , under super. No Comments.

Making Additional Or Extra Super Contributions To Your Employees? Here’s What You’ll Have To Report

If you are an employer who makes additional or extra super contributions, you are required to report them through Single Touch Payroll (STP) or on the employee’s annual payment summary.

However, there are two kinds of super contributions that can be made – reportable and non-reportable. As an employer, it’s important to know the difference between the two as they could affect your and your employees’ returns.

Reportable Employer Super Contributions

Reportable employer super contributions (RESC) are contributions that are not included in your employee’s assessable income. They do not affect the way that your super contributions for your employees are calculated.

The following are types of employer super contribution that are reportable:

  • Additional contributions as part of an employee’s individual salary package
  • Additional contributions under a salary sacrifice arrangement
  • Pre-tax amounts paid to an employer’s super fund at the employee’s direction, such as directing an annual bonus into super.

Extra contributions must be reported by employers if:

  • The employee that you are paying the contributions to can influence the rate or amount of super that you contribute for them, and
  • The contributions are in addition to the compulsory contributions you must make under the super guarantee, a collectively negotiated industrial agreement, the rules of a super fund or federal, state or territory law.

The extra contributions are reportable super contributions unless you show that:

  • The extra contributions are made for administrative simplicity
  • A documented policy is in place that does not allow an employee to influence the contributions that you make on their behalf

Non-Reportable Employer Super Contributions

The following employer super contributions are not reportable, however, and should not be included on the employee’s assessable income:

  • super guarantee contributions
  • contributions required by collectively negotiated industrial agreements
  • matching contributions under a collective agreement (but matching contributions under an individual agreement are reportable)
  • to a defined benefit fund (exceptions may apply)
  • contributions required by super fund rules or a law
  • extra contributions that the employee could not influence, such as extra contributions for administrative simplicity or accepted employer policy
  • contributions from the employee’s after-tax income

Keep Your Records Up To Date

In order to ensure that you are remaining compliant with super contributions for your employees, you must keep accurate records. This will show whether your employee influenced the super contributions you made on their behalf.

This may include records of:

  • How you calculated reportable employer super contributions
  • How you calculate the employee influenced portion of the total employer contribution
  • How you calculated your employee’s salary or ordinary time earnings (OTE)
  • Relevant salary sacrifice agreements
  • Relevant industrial agreements

These records must be kept for 5 years after they are prepared, obtained or the transactions are completed, whichever occurs last.

Reportable employer super contributions are not included in your employees’ assessable income. Ensure that you are doing the right thing by your employees when it comes to their super by having a conversation with us, to be sure that you are acting in compliance with what is needed.

Posted on 19 November '21 by , under super. No Comments.

Retiring Isn’t Always The Stopping Point In Your Career, But What Happens To Super If You Keep Working After Retirement?

A number of Australians may find themselves after retiring from their 9 to 5 occupations at a bit of a loss. Some may decide that they aren’t ready to be fully retired and are looking to reenter the workforce in a new fashion. It’s a more common practice than you might think.

It is important that those who reenter the workforce after their retirement are aware of the technicalities that can be involved when it comes to contributing back to their superannuation fund.

Whether it is a result of pandemic-driven seachange, or looking towards keeping occupied, retirees re-entering into the workforce isn’t as uncommon as one might think. However, with the decision comes a lot of technicalities that can need to be taken into consideration, especially with regards to superannuation.

Generally, one contributes to their superannuation in an effort to fund their retirement. Once you reach your retirement, you may access your superannuation to live off of it as a part of a pension. However, this is usually done under the assumption that once you hit retirement age, you’re done with the workforce and are ready to live out the golden years.

So what if you hit retirement, take it, but then decide that you would prefer to return to the workforce (perhaps on a reduced basis, such as a part-timer).

In terms of superannuation contributions, those who commence work again and are under 67 can contribute back into their super fund. Those who are over the age of 67 must satisfy a ‘work test’ before they can begin contributing back into their super fund. The test involves working 40 hours within any 30-day cycle during the financial year the worker plans to contribute in. This aspect is an especially important timing issue for those engaging in part-time work with variable hours.

In the 2021-22 Federal Budget, the government announced that it planned to repeal the current work test for making super contributions for people aged between 67 and 74. This is yet to be enacted in legislation but is expected to apply from 1 July 2022.

The proposed repeal of the work test will only apply when making non-concessional (after-tax) contributions or salary sacrificed contributions.

If you wish to make a personal contribution for which you intend to claim a tax deduction, you will still be required to meet the requirements of the work test.

Returning workers can make two types of contributions: concessional and non-concessional contributions. Concessional or ‘before-tax’ contributions receive a 15% contributions tax when entering a super account.

Non-concessional (after-tax) contributions do not receive a contributions tax when entering a superfund since these contributions are already considered to be from an income that has already been taxed at some stage. Owners of small businesses may be eligible for special capital gains tax (CGT) concessions when planning for retirement.

There is also an important distinction in regards to the type of work that returning workers must perform. To contribute back into a superfund, workers must work for “gain or reward”. In other words, those looking to contribute back into their super fund cannot engage in volunteer work and must be paid some kind of salary.

This working requirement does not affect employer contributions (10 per cent of a salary) and relates to workers making additional contributions through after-tax contributions or salary sacrifice.


Workers can make super contributions up to the age of 74. Once workers reach the age of 75, no more voluntary super contributions can be made. This is because contributions (minus the mandatory employer contributions) must be discontinued at this date.

Returning workers who, after a few years of working, decide to exit the workforce again, will have their accumulation account built up from their most recent work. They can choose to start a new pension with their accumulation account (so they draw two separate pensions from their superfund), or they can stop their existing pension and add it to their accumulation account so that only one pension goes forward.

An individual’s circumstances dictate the decision to have one or multiple pensions. It may be worthwhile to maintain separate pensions, or simply leave the accumulation account as is and rely on the existing pension account. You can speak with us for information that may be more tailored to your situation, or discuss your options with your super provider or specialist.

Posted on 2 November '21 by , under super. No Comments.

Who Gets The Superannuation In The Divorce?

In the event of a divorce, your’s and your partner’s superannuation is one of the assets you may need to take into consideration.

It might be one of the last things on your mind, but it’s important to realise that there are complex laws that can apply, and walking away with it untouched is not always possible.

Superannuation splitting laws, as they are known, allow separating couples to value and divide their superannuation after a relationship’s breakdown.

Under the Family Law Act 1975, superannuation is treated as property. However, it is different from other types of property as it is held in a trust, and so, different super splitting rules are available (unless you are a de facto couple located in Western Australia).

Your ex-spouse is likely to be entitled to receive a portion of your superannuation assets and vice-versa.

The superannuation splitting laws apply to:

  • married (or formerly married) couples who had not finally settled their property arrangements, by a court order under section 79 of the Family Law Act or an agreement approved by a court under section 87 of that Act, before the laws commenced on 28 December 2002,
  • De facto couples, in most States and Territories, whose relationship broke down on or after 1 March 2009 (and South Australian de facto couples, where their relationship broke down on or after 1 July 2010).

The laws do not apply to de facto couples in Western Australia

Super splitting laws offer three options that you and your ex-spouse can take to make a superannuation agreement. This agreement forms part of your ‘binding financial agreement’ and outlines what will happen with the superannuation interest involved.

The options available for dealing with your super in the event of divorce or a relationship breakdown include:

Interest Or Payment Split

A common approach is to have a portion of your super benefits immediately split and paid to your ex-spouse.

This portion can be paid in one of three ways. Provided that you have met a condition of release, the agreed portion can be withdrawn from your super in the form of payment. Otherwise, the creation of a new interest for the non-member is permitted, or payment can be transferred to their super fund.

Payment Flagging

You can choose to flag the interest in your super until a particular event occurs down the track (i.e., retirement). This may be a good option if the value of the interest cannot be determined, and in this way, you and your ex-spouse can wait until the event occurs to determine how you will split the interest involved. By flagging your super, payment cannot be paid until a flag-lifting agreement is signed.

No Split Or Flag

This option requires taking into account the value of the superannuation benefits involved but leaving them untouched while other property assets are divided fairly between the divorcing/separating couple. For instance, your super benefits remain untouched while your ex-spouse receives a larger share of the remaining property assets. No split or flag is also the only option available for de facto couples in Western Australia.

What If You Have A SMSF?

Super splitting laws only become more complicated when it involves a self-managed superannuation fund (SMSF). During your divorce, you will still be required to continue your duties as trustee, including acting in the best interests of all members even if your ex-partner is also a trustee, i.e., not excluding them from the decision-making process. Similar to the above, the approach you take to deal with the super interests involved are dealt with after each party obtains independent legal and financial advice.

Going through a divorce or relationship breakdown is emotionally challenging. Add in financial stress and additional challenges, and it becomes more important than ever to ensure that your superannuation splitting is handled correctly.

You can form an agreement about super-splitting before, during or after the relationship has ended. If you do not have an agreement in place, you can obtain a court order. Regardless, the details involved in super splitting laws are quite tricky to comprehend and to make the best decision independent legal and financial advice for each party must be sought to be legally binding.

Posted on 26 October '21 by , under super. No Comments.

Maternity Leave, Unemployment, Single-Income Families – Why Spousal Contributions Might Be On The Cards

Depending on your relationship, you may have discussed with your partner the prospect of marriage. Or you might be more comfortable remaining in a long-term de facto relationship (especially since many de facto relationships have similar rights as those of a marriage).

You might share a lot of things with your partner (such as a mortgage, a family, or a car), but did you know that you might be able to boost their super for them?

Specifically, if you (or your partner) were unable to work for a length of time, such as during maternity/paternity leave, unemployment or are a single income household, the super fund of the non-working part of the pair might not be increasing. As a result, the retirement savings held in super for one member of these households may not be increasing as exponentially fast as the working member.

The good news is that when in a relationship, a spouse can boost their non-working partner’s super fund with their own contributions. The best part? It could be a tax write-off for the working spouse.

Under Australian superannuation law, a spouse can be a legally married partner with whom you live or your de facto partner. That gives additional benefits to those in de facto relationships, who can choose (if one member of the relationship isn’t working or earns less) to boost their partner’s super fund. A spouse must also be younger than 75 years old when you make the contribution.

One of the primary losses of super gains that can occur is a result of maternal or paternal leave. If you and your spouse are thinking about starting a family and may have to take time off work during the pregnancy, spousal contributions can be a great way to continuously inject funds into super so that the gap from the pause in employment can be mitigated.

If you are looking to help your spouse’s super grow, there are two ways that you can go about it.

  • Making a Spouse Contribution to their super account
  • Arranging for Contribution Splitting (also known as Super Splitting)

Spouse superannuation contributions can now be made for spouses earning up to $40,000 per year. If a spouse earns less than $37,000, the maximum tax offset of $540 can be claimed when contributing a minimum of $3,000 to their super. Anything contributed that is more than $3 000 will not receive the spouse contribution tax offset.

You will not be able to claim the tax offset if:

  • A spouse has exceeded their non-concessional contributions cap for the financial year or,
  • Their super balance is $1.6 million (for 2020/21) or more on 30 June of the previous financial year in which the contribution was made.

Another way to inject funds into your spouse’s super is to choose to have some of your own super contributions put into their super account. This is fine as long as they have not reached their preservation age yet, or are between their preservation age and 65 years and not retired.

Super contributions can only be split in the financial year immediately after the year in which the contributions were made or in the same financial year as the contributions were made. This is only if your entire benefit is being withdrawn before the end of that financial year as a rollover, transfer, lump sum or benefit.

Contributions can be split in two different ways.

  • Employer contributions – the most common form of super contributions to split
  • Personal tax-deductible contributions – money that you deposit into your super and claimed a tax deduction.

Spouse contributions are generally treated differently to contributions your spouse splits with you.

If your spouse makes a contribution for you, it counts towards your non-concessional contributions cap – not your spouse’s contribution caps. If you are currently employed by your spouse, any contributions that they may have made in this role are reported as employer contributions (not spouse). They may also include amounts transferred from your spouse’s or ex-spouse’s FHSA under a family law obligation.

If you are looking into spousal contributions into super, it is best to seek the advice of your financial advisor or superannuation provider, to best determine what path you should take.

Posted on 10 October '21 by , under super. No Comments.

Your Super Funds Might Need A Checkup – Do You Know Where To Look?

When it comes to your retirement funds, you want to ensure that you have an amount in your superannuation fund that will allow you to live comfortably. That’s why you may want to examine it closely and make sure that you aren’t losing out on money that could be going towards your retirement. Checking it regularly can help to prevent this – but so can consolidating your super and ensuring that you aren’t paying extra fees on multiple accounts.

If you have ever changed your name, address or job, your fund or the ATO may not have your current details, which can result in your super becoming ‘lost’ or unclaimed. It might also lead to having multiple super accounts, which could result in additional fees being paid for those super funds.

With the introduction of stapled accounts coming into play later this month, this may not be of such concern to those entering the workforce. But for those who may have been in the workforce for a while, superannuation is something that you should be closely examining.

This process does not have to start when you’re about to retire. If anything, keeping track of your super and catching where it might be losing money is far better to do sooner rather than later.

You may find additional superannuation funds in:

  • ATO-held super
  • “Lost” super
  • Unclaimed super
  • Unmatched super
  • Multiple accounts that you may possess.

One of the reasons for the introduction of stapling of super funds to new entrants to the workforce is to ensure that you are attributed to one super fund and that it follows you throughout your career. This will reduce the likelihood of multiple super accounts being opened in your name, reducing the fees that you may have to pay and generally ensuring that your funds will be in the one place.

Superannuation can be a tricky subject. Make sure that you speak with your superannuation provider about any queries that you may have. You might be able to speak with us if you are looking to plan out your retirement, or for additional financial help.

Posted on 5 October '21 by , under super. No Comments.

What Is A Stapled Fund, And What Does That Mean For Your Future Employees?

This year has seen a lot of amendments and changes to the rules governing superannuation funds and their providers by the Federal Government that may have an impact on how you as an employer deal with super.

Are you aware of the changes to “choice of fund” rules that you might need to be aware of as an employer of new to the workforce employees?

Currently, as an employer, you may be paying contributions to your new employees into a  default superannuation fund of your choice if they have failed to provide you with their own choice of superannuation fund details. This may be due to not having a superannuation fund (as in, the employee is new to the workforce), or as a result of other circumstances.

As an employer, you must provide all new employees with a Superannuation standard choice form within 28 days of their start date. They may also be provided with one if:

  • They as an employee request one
  • You are not able to contribute to their chosen fund, or it is no longer a complying fund
  • You change the employer-nominated fund into which you pay the employee’s contributions.

If the employee holds a temporary working visa or their super fund undergoes a merger or acquisition, they will not be able to choose their super fund themselves.

From 1 November 2021, if you have new employees start and they don’t choose a specific super fund, you may need to request their ‘stapled super fund’ details from the Australian Taxation Office.

A stapled super fund is an existing account that is linked, or ‘stapled’ to an individual employee, so it follows them as they change jobs. This change aims to reduce the number of additional super accounts opened each time they start a new job. If a new employee does not have a stapled fund and they do not choose a fund, the employee’s super can be paid into the employer’s default fund.

With fewer superannuation funds being opened, employees are less likely to generate ‘lost super’ as they transition through their employment periods and various careers leading up to their retirement.

As an employer, you’ll be able to request stapled super fund details for new employees using the ATO’s Online services for business.

To get ready for this change, you can check and update the access levels of your business’ authorised representatives (such as your accountant or bookkeeper) in Online services. This will mean you’re ready to request stapled super funds if needed. It will also assist in protecting your employees’ personal information.

As an employer, you legally cannot provide your employees with recommendations or advice about super unless you are licensed by ASIC to provide financial advice. You can give your employees information about choosing a fund however, including:

  • Why do they need to choose a super fund?
  • The process of choosing a super fund.
  • Your obligations as an employer to pay the super guarantee and provide a default fund to pay into
  • How they can nominate their chosen fund

Remember, registered tax agents and BAS agents like us can help you with your tax and super queries. Come and speak with us about your options, and to ensure that you are compliant with your super requirements as an employer.

If you are a new employee entering into the workforce, and you’d like to know more about your options when it comes to superannuation, you should have a serious discussion with providers and conduct your own independent research on the funds available.

Posted on 20 September '21 by , under super. No Comments.

Your Super Might Provide You With Insurance Options – But Are They Better Than An Actual Provider’s?

Taking out insurance through a super fund can be a great option for some members, but it does also come with some pitfalls.

Super funds typically offer three types of life insurance for their members – life cover, total and permanent disability and income protection insurance.

Most super funds will provide their members with insurance options and an option to increase, decrease or cancel default insurance cover. Typically, most will automatically provide you with life cover and TBD insurance, and some will also automatically provide you with income protection insurance.

There are many benefits of taking out insurance through super, including the ability to purchase policies in bulk, not having to pay for premiums with your take-home income, and the convenience of having your policy managed for you.

Additionally, life insurance inside super is deductible to the fund at 15 per cent annually; whereas life insurance premiums held outside of super are not tax-deductible.

However, there are pitfalls of holding insurance through your super. Generally, there is a limit on the payout that can be received from an insurance policy purchased by a super fund.

For some self-managed super funds, there may not be a limit – depending on what your insurance company is willing to cover. In public funds, it is usually between $100,000 and $200,000. This amount may be more than enough for many people. If you have dependents and a mortgage, it may be an insufficient amount to look after your loved ones, should something happen to you.

Members of super should be aware that life insurance coverage inside super ends when you reach a certain age (usually 65 or 70), whereas policies outside of super may cover you for longer.

Another important note to make for new super account holders is that insurance may not be provided to you if you are aged 25 or under, or have a super account balance under $6,000. In that case, you can contact your fund to request insurance through your super directly, or are employed in a dangerous job where the fund chooses to give you automatic cover.

Anyone using a super fund to provide insurance should ensure that they have an appropriate death benefit nomination in place that specifies who their super will go to in the event of their death. Speaking with a specialist like us can assist you in ensuring that your super fund balance doesn’t become the next big superannuation court case.

Posted on 15 September '21 by , under super. No Comments.