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General Information

Superannuation is a way of saving for your retirement. Both you and your employer can make contributions that accumulate over time and this money is then invested to provide for your retirement days.

On retirement, or after disability or death you then receive the money as regular periodic payments (ie, a pension), a lump sum payment, or a combination of both.

Generally, if you are classified as an employee you are entitled to super guarantee contributions from your employer of a minimum of 9.25% of your wages (excluding overtime, leave loading and fringe benefits).  This minimum amount is set to increase year by year until it reaches 12% in the 2020 Financial Year.

Types of Contributions
There are two main types of contributions that can be made into your super fund; concessional and non-concessional.  

Concessional contributions are contributions that are made into your super fund before any tax is paid on them. They can include super guarantee, insurance premiums paid to a super fund on your behalf, salary sacrificed amounts and also any amount allowed as a personal super deduction in your income tax return.

Non-concessional contributions are personal contributions made from after-tax income and other contributions that are not subject to tax in the super fund.

Contributions can only be made as long as you meet the specific requirements to contribute.  The contribution rules are outlined below:

Contribution Type

Work Test:

Applies if the member is age 65 or more.  Requires that the member has been gainfully employed for at least 40 hours in no more than 30 consecutive days in the financial year

Age Limit

Member (Personal)



Employer Mandated



Employer Non-Mandated







Contribution caps apply to your contributions made into Super each year.  The current contribution caps are as follows:

Contribution Type

Cap Limit


Concessional Contributions


Indexed annually with AWOTE rounded down to the nearest $5,000.

Non-Concessional contributions


If you are aged under 65 you may bring forward up to 2 future years entitlements.  Therefore you can make one lump sum contribution of $300,000 during a three year period.

Breaching your contribution cap
If you breach your concessional cap there are four aspects you need to be aware of:
  1. The excess contributions are included in your assessable income and taxed at your marginal tax rate
  2. You will be liable to pay an excess contribution charge to neutralise any benefit that you may have received from having the funds held in the concessionally taxed super environment
  3. You can elect to have up to 85% of the excess amount released from your super fund
  4. Any excess amount remaining within the fund will count against the non-concessional contributions cap

If you breach the non-concessional cap there are three aspects you need to be aware of:

  1. An amount equal to the excess contributions tax (46.5%) will be subtracted from your non-concessional contributions over the cap limit
  2. You must withdraw the after tax excess contributions from your superannuation fund
  3. Amounts in excess of the concessional contributions cap that you have not withdrawn count towards the non-concessional cap

Accumulation vs Pension

Generally up until you reach your preservation age your super must stay in the Accumulation Phase.  This is essentially the period of time of which the main focus of your super is to build it up for your retirement needs.

Upon reaching your preservation age you then have the option to roll your benefits into Pension Phase.

You can choose one of the following set ups once reaching this age:

  • commence a pension
  • retain your funds in accumulation
  • have a combination of the two

When your funds are in accumulation there is no requirement for you to withdraw funds from your super.  On the other hand, when funds are in pension mode you must withdraw the minimum (based on age and balance) required amount each year.

If your superannuation is held in the accumulation phase there are tax consequences.  Earnings on investments are taxed at 15% and capital gains tax will also apply if assets are sold to fund a lump sum withdrawal.

In contrast, funds within pension mode are exempt from income tax and there will be no capital gains tax if assets are sold.

It is important to note that the choice of being in either accumulation or pension phase can have numerous effects upon longevity of your super fund, Age Pension and many other factors.

Transition to Retirement
A TRIS is a non-commutable income stream that provides access to your super money prior to retirement and is available to you once you have reached your preservation age.  If you elect to commence a Transition to Retirement Pension (TRIS) you will be faced with a maximum pension limit as well as a minimum limit.  If you have a TRIS pension you will be restricted to withdrawing a maximum of 10% of your opening balance annually.