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Tax and other useful facts

Super lump tax (member benefits)

Section: 6.2

The table below outline the taxation treatment of taxed and untaxed amounts paid from a fund for 2020/21: 

Taxed in the fund:

Age Lump sum Income stream
Age 60 and over Tax-free Tax-free
Preservation age to age 59 0% up to the low rate cap ($215,000) Marginal tax rates and tax offset of 15% of the taxable component
Below preservation age Subject to tax up to maximum rate of 20% plus Medicare Marginal tax rates (no tax offset)

Untaxed in the fund:

Age Lump sum Income stream
Age 60 and over Subject to tax up to a maximum of 15% on amount up to the untaxed plan cap amount of $1.565m Marginal tax rates and tax offset of 10% of element untaxed in the fund.
Preservation age to age 59 Subject to tax up to a maximum of 15% plus Medicare on amount up to the low rate cap amount of $215,000.

Amount exceeding $215,000 up to the untaxed plan cap amount ($1.565m) is taxed at maximum rate of 30% plus Medicare.

Amount exceeding $1.565m is taxed at the top marginal rate.

Marginal tax rates and no tax offset
Below preservation age Amount up to $1.565m is taxed at a maximum rate of 30% plus Medicare.

Amount exceeding $1.565m amount is taxed at the top marginal rate.

Taxed marginal rates, with no tax offset.

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

Last modified: Thursday, August 27, 2020