ATO Warnings
The following ATO link speaks to the dangers of attempting to claim early access to superannuation illegally, warns of illegal early access schemes and provides guidance on what you should do if you are approached by a promoter of such schemes.
A few things to remember before withdrawing your super are:
You may be able to choose to receive your super as a income stream, a lump sum or a combination of both.
The age the Government allows you to withdraw your super is different to the age you can apply for the Government Age Pension, which is 67* years.
*On 1 July 2021, the Age Pension age increased to 66 years and 6 months for people born from 1 July 1955 to 31 December 1956, inclusive. If your birth date is on or after 1 January 1957, you’ll have to wait until you turn 67. This will be the Age Pension age from 1 July 2023. Making a withdrawal may affect your Centrelink payments and insurance cover so it’s important to get advice before doing so.
Tax considerations and impacts on withdrawals
If you are aged 60 or over, lump sum withdrawals and income payments are generally tax-free. Under the age of 60, the amount of tax you pay will be based on things such as how much you withdraw, the ‘taxable components’ of your super balance, and your marginal rate of tax. For more information read more here.
| AGED UNDER 60 |
AGED 60+ | |
| Income payments from pension accounts |
Lump sum Withdrawals from super or pension accounts |
Withdrawals from pension accounts and super accounts |
| Taxable component*: your marginal tax rate plus Medicare Levy, less a 15% tax offset. |
Taxable component*: the first $230,000‡ is tax free. The balance is taxed at 17%‡. |
No tax payable |
|
Your super balance is divided into two components, - tax free and taxable. These are calculated based on the type of contributions made to your account. |
Log in to your account and get a ‘benefit quote’ to understand how much of your super will be tax free or taxable. |
|
* If your taxable component includes an untaxed element, additional tax may be applied to that element.
‡ This amount is reduced by any amount previously applied to this threshold.
Withdrawal impacts on Centrelink
If you access your super, it may affect your Centrelink payments. To find out more:
- phone Centrelink on 13 23 00
- visit the Services Australia website.
- speak to a TelstraSuper Financial Planning Advisor on 1300 033 166
Insurance implications when withdrawing
If you are making a withdrawal, you should consider whether your withdrawal will affect your insurance cover including whether it will result in the cessation of your insurance. If there are insufficient funds in your account to cover your insurance premiums after your withdrawal any insurance cover you have through this account will cease. Please contact us for further information.
Payment when you die
When you die your super will be paid to one or more of your dependants or your legal personal representative. They'll receive your super balance and any death benefit insurance cover you may have.
Who receives your death benefit?
You can nominate which of your dependants and/or legal personal representative you wish to receive your super in the event of your death.
If you make a binding nomination, the Trustee must follow your wishes provided certain conditions are met.
If you make a non-binding nomination, the Trustee will take this into consideration in determining who receives your benefits in the event of your death.
If you do not make a binding nomination, the Trustee has discretion in deciding who receives your benefits in the event of your death.
Find out more about the differences between binding and non-binding beneficiary nominations.
How to make a claim?
When you die, your family or legal representative should contact TelstraSuper's Insured Benefits Group who will help provide them with the forms that need to be completed in order for your benefit to be paid. They can call us on 1300 033 166 or download this factsheet.
For more information on what happens to your super when you die and the importance of nominating beneficiaries, please visit our pages on estate planning.