How Super Rules Change with Age
Some super rules change with age – some don’t.
How Super Rules Change with Age
The rules around superannuation are confusing. And one of the reasons for that is that some change as you age and some don’t. Here are 9 rules that change and 9 that don’t.
Super Rules Not Affected by Age
Not everything changes as you age. Some super rules stay the same from birth to death. They are not affected by age, neither yours nor anybody else’s.
1 – Tax Rates
Your tax rates within super don’t change – no matter your age. You will always pay 15% tax on accumulation and 0% on pension within super.
2 – Tax Free
Your tax-free components will always be tax-free irrespective of age. Neither you nor any beneficiary will ever pay tax on tax free-components.
3 – Contributions
The rules around government co-contributions as well as spouse contributions apply irrespective of your age.
4 – Investment Rules
The rules around what your fund is allowed to invest your super in don’t change with age.
5 – Special Conditions of Release
Your age has no bearing on whether you meet a special condition of release like terminal illness, disability or financial hardship.
6 – Transfer Balance Cap
Your transfer balance cap and account is not affected by your age. Whether you can start a pension might depend on your age, but the amount doesn’t.
7 – SIS Dependants
SIS dependancy doesn’t depend on age. Whether you qualify as a SIS dependant or not has nothing to do with how old you are.
8 – Tax Dependants
Your tax dependancy doesn’t depend on your age as long as you are not a child of the deceased.
9 – Administration
The rules around the administration of your fund – annual audit, annual return, TBAR reporting etc – are not affected by your age.
Super Rules Affected By Age
What worries our lawmaker while you are young no longer worries them when you are old. And vice versa. And so many super rules change with age.
1 – Personal Contributions
Between 65 and 74 you must pass the work test to make personal contributions. Once you hit 75, the door is closed apart from SG and downsizer contributions.
2 – Concessional Contributions
While a minor, your super can’t receive personal concessional contributions unless you run a business. Once you turn 18, the door is all open.
3 – Downsizer Contributions
You can only make downsizer contributions once you are aged 65 or more.
4 – Superannuation Guarantee
Under 18 you have to work at least 30 hours per week and earn at least $450 per month to get the super guarantee. Once 18, only the $450 threshold applies.
5 – General Conditions of Release
General conditions of release depend on your age. Preservation age, turning 60 and 65 are important trigger points.
6 – Minimum Pension Payments
Your minimum pension payment percentage steadily increases with age. It starts at 4% under 65 and increase to 14% when 95 or older.
7 – Taxable Components of Benefit Payments
If you access your super before you turn 60, you pay tax on any taxable component. Once 60, any benefit payment to you is tax-free.
8 – Child Dependancy
While under 18, being somebody’s child automatically makes you a tax dependant and eligible for a death benefit pension. Past 18 it doesn’t.
9 – Death Benefit Pension
A death benefit pension is tax-free when the deceased at the time of death and/or the beneficiary are 60 or older. It isn’t, while both are under 60.
So this is a short overview of how super rules change with age. If you get stuck, please email or call us. There might be a simple answer to your query.
Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.
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Last Updated on 09 February 2020