Income thresholds are changing for the private health insurance rebate

Posted on 18 April 2024 | by Allan Hall

From 1 July, the income thresholds for private health insurance rebate purposes will increase.

Income thresholds

The private health insurance rebate is income tested
This means that if your income is higher than the relevant income threshold, you may not be eligible to receive a rebate
Your rebate entitlement depends on your family status on 30 June
Different thresholds apply depending on whether you have a single income or a family income.

When you lodge your tax return, we calculate your income for surcharge purposes and determine your rebate entitlement.

Your entitlement is also based on the age of the oldest person covered by the policy.

The income thresholds used to calculate the Medicare levy surcharge and private health insurance rebate have increased from 1 July 2024.

2024–25 Income thresholds
Family status	Base tier	Tier 1	Tier 2	Tier 3
Single	$97,000 or less	$97,001 – $113,000	$113,001 – $151,000	$151,001 or more
Family	$194,000 or less	$194,001 – $226,000	$226,001 – $302,000	$302,001 or more

Note: The family income threshold is increased by $1,500 for each Medicare levy surcharge dependent child after the first child

Family status on 30 June

Your family status on the last day of the income year (30 June) determines whether the single or family income thresholds apply to you. The information below provides guidance to when single or family thresholds apply.

Depending on your situation, your income may be tested against either the Single income thresholds or Family income thresholds.

Single income thresholds

If you are single on the last day of the income year and have no dependents, you are income tested against the single income thresholds.

This applies even if you had a spouse for the majority of the year, as long as you were single on the last day (30 June) of the income year.

If you separated from your spouse during the financial year and remain single with no dependents on 30 June, your rebate entitlement is calculated only on your own income.

Your entitlement to a private health insurance rebate is based on your income for surcharge purposes.

If you were single on 30 June, but had dependent children, you are considered a family and will be income tested using the family income thresholds.

Family income thresholds

If you had a spouse on the last day of the income year (30 June), your income will be tested against the family income thresholds. Your entitlement to a private health insurance rebate is assessed on your and your spouse’s combined income for surcharge purposes.

The family income thresholds also apply if:

you are a single parent with one or more dependents
you don’t have a spouse on the last day of the income year and you either maintain a dependent child or children or contribute in a substantial way to the maintenance of a dependent child.

If your spouse died in the income year and you were single on 30 June with no dependants, your and your spouse’s income is used for surcharge purposes to determine your entitlement under the family income thresholds.

If you have two or more children, the family income threshold is increased by $1,500 for every Medicare levy surcharge dependent child after the first child.

Note: Dependent children’s income is not included when calculating family income. Medicare levy surcharge dependent child is different to dependent persons who may be covered by your private health insurance policy.

CONTACT ALLAN HALL BUSINESS ADVISORS

entitlements, family, health, income, insurance, tax return

Safeguard Your Affairs with Audit Insurance

Posted on 12 February 2024 | by Allan Hall

Audit Insurance: A different perspective on a wise investment

In the dynamic world of business, facing an Australian Taxation Office (ATO) audit can be a daunting and costly experience for both business owners and individual taxpayers alike.

However, did you know that already 15% of Allan Hall business clients have chosen to secure their financial well-being by opting for audit insurance?

This strategic decision is not just about protecting finances; it’s about ensuring peace of mind during potential ATO reviews.

The Cost of an ATO Audit

The average cost for professional fees associated with a standard ATO review of a proprietary limited (Pty Ltd) company can be as high as $18,000. This figure includes the expenses incurred in navigating through the intricacies of tax regulations, responding to ATO queries, and addressing any discrepancies that may arise during the audit process.

The Affordable Solution

Enter audit insurance — a financial safety net designed to alleviate the burden of exorbitant audit-related expenses. For an average annual cost of around $600, businesses can secure comprehensive coverage that not only shields them from the financial impact of an ATO audit but also allows them to navigate the process with professional support.

Why Choose Audit Insurance?

1. Cost Mitigation:

Shield your business from hefty expenses associated with ATO audits, including accounting and legal fees.
The annual investment in audit insurance is minimal compared to the potential costs of an unexpected ATO review.

2. Peace of Mind:

Focus on running your business without fear of unexpected financial setbacks due to audits.
Audit insurance provides peace of mind, allowing you to concentrate on growth and development rather than compliance concerns.

3. Professional Support:

Freedom to access our team of experts to assist in handling ATO audit queries ensures that your business is in capable hands.
Receive guidance throughout the audit process, ensuring compliance and minimising the risk of financial penalties.

Being prepared for unforeseen challenges is a mark of a prudent entrepreneur. Audit insurance emerges as a sensible investment, providing a safety net against the potential financial impact of ATO audits.

With an average annual cost that pales in comparison to the potential expenses of an initial review or an extensive audit, business owners can make an informed decision to safeguard their financial health. In the end, the choice is yours but with audit insurance, you can make that choice with confidence and financial security.

Allan Hall Financial Planning retirement

Posted on 5 February 2024 | by Allan Hall

Mark O’Connell Farewelled after a Decade of Outstanding Service

As the curtains drew to a close on 31 December 2023, the Allan Hall Financial Planning team bid a fond farewell to one of its senior advisors, Mark O’Connell, who retired after an illustrious 10-year career with the company.

Mark’s invaluable contribution to the financial planning team has left an indelible mark on Allan Hall, and his retirement is celebrated as a well-deserved culmination of a successful career.

During his time, Mark played a pivotal role in shaping the success and growth of Allan Hall Financial Planning. His dedication and expertise were instrumental in establishing the firm as a trusted name in financial advisory services and the team is grateful for the wealth of knowledge and experience he brought to the table.

The Allan Hall Financial Planning team, now under the capable leadership of Robin Bell, consists of three advisers and three support staff, all of whom boast extensive knowledge and experience in the financial services industry. The team prides itself on its commitment to providing comprehensive financial planning advice, covering areas such as wealth accumulation, retirement planning, wealth protection, superannuation, investments, and personal and business insurance.

Over the last 12 months, Mark’s valued clients have undergone a seamless transition to two highly qualified advisers within the team — Martin Cimino and Angelo Adam. Martin, who joined the team in February 2023, brings a wealth of experience from a successful stint as a partner/director of a financial planning company, where he also served as a Senior Private Wealth Adviser since 2010. Angelo, an adviser since 2019, has been instrumental in assisting clients with their personal insurance needs.

Allan Hall Financial Planning takes pride in its diverse and loyal client base. Situated in the ‘Lifestyle Working’ building in the heart of Sydney’s Northern Beaches, the office provides a modern and inviting environment for both clients and employees. The open-air meeting spaces and light-filled offices foster innovation and vitality in the workplace, making it an ideal setting for client interactions.

As an integral part of Allan Hall Business Advisors, the financial planning team collaborates closely with accountants, tax advisors and SMSF specialists. Acting as a ‘financial coach,’ the team ensures that clients’ financial and lifestyle goals are thoroughly understood and met across various areas. This holistic approach sets Allan Hall Financial Planning apart, making it a trusted partner in guiding clients through their financial journey.

Mark O’Connell’s retirement may mark the end of a chapter, but the legacy of his contribution endures as Allan Hall Financial Planning continues its commitment to excellence and client satisfaction. The team looks forward to the future, building upon the foundation laid by Mark and embracing new opportunities for growth and success.

CONTACT ALLAN HALL FINANCIAL PLANNING

Superannuation health check

Posted on 29 May 2023 | by Allan Hall

Use this checklist to review the health of your super in 5 easy steps

Getting started

The best way to perform these checks is either on ATO online services through myGov or by contacting your super advisor directly
You need a myGov account linked to the ATO
Once you link your myGov account, you can also use the ATO app.

Check 1: Check your contact details

Check your contact details, tax file number (TFN) and bank account are up to date with the ATO and your super fund. This helps prevent lost super and assists us in matching any unclaimed super to you.

Log on to ATO online services through myGov. In the top menu, select My profile. From the drop-down options, select either:

Personal details to update your name, contact number, email and home address
Financial institution details to update your bank account and
- under the Account heading, you will see Income Tax and Superannuation
- select either Add or Update.

To update your contact details, bank account and TFN with your super fund, see their website or contact them directly.

Check 2: Check your super balance and employer contributions

It’s important to check your super balance each year to see how much you have and keep track of your employer contributions. You can do this anytime on ATO online services or through your super fund.

Your employer should pay your super at least every 3 months. They may choose to do it more frequently, such as your regular pay cycle. From 1 July 2022 to 30 June 2023, your employer should pay at least 10.5% of your salary into your super. From 1 July 2023 to 30 June 2024, the rate increases to 11%. If you’re under 18, you need to work more than 30 hours a week to be eligible for super.

Funds report account balances to us at certain times of the year. Balances shown in ATO online services may be different to your actual current balances.

Log on to ATO online services through myGov. From the top menu, select Super and then either:

Fund Details to see all your super accounts and balances (including those held in funds or with us) and the most recent date reported by your fund
Information then Employer contributions to see the total year-to-date employer contributions in a selected year – select Transactions to see each contribution separately.

For help calculating the amount of super your employer should be paying, use the ATO’s Estimate my super tool. If you do not receive super contributions or the amounts are incorrect:

contact your employer and request an update
report it.

Check 3: Check for lost and unclaimed super

You may have lost track of some of your super when you changed your name, address or job, for example. This is why it’s important to ensure your fund has your current details.

Lost super is when your fund has lost touch with you, or your account is inactive. This money is held by your fund. Unclaimed super is when your fund transfers lost super to the ATO.

All your super accounts including lost and ATO-held super are displayed on ATO online services.

Log on to ATO online services through myGov. From the top menu, select Super. Then select either:

Fund details to check for lost super – if you want to keep your super with the same fund, contact them directly to update your details
Manage and then Transfer super to transfer this lost super to an eligible super account – or ask your fund to complete the transfer for you
Manage and then Transfer super to transfer ATO-held super to an eligible super account
Manage then Withdraw ATO-held super to have your super paid directly to you if the amount is less than $200 or you are over 65.

Check 4: Check if you have multiple super accounts and consider consolidating

If you’ve had more than one job, you may have more than one super account. It’s important to know how many super accounts you have. Combing your super may reduce fees and make it easier to manage.

If you decide to consolidate your super, it’s important to choose the fund that’s right for you. You should check that it provides better value, and the insurance cover suits your needs, which may change throughout your life. To see which fund is the best option for you, visit MoneySmart. If you are unsure of what to do, contact your super fund or seek independent financial advice.

Log on to ATO online services through myGov. From the top menu, select Super then either:

Fund details to see all your super accounts and balances
Manage and then Transfer super to consolidate your accounts, then
- select the fund you want to close (transfer)
- select the fund you want your money transferred to from the accounts listed
- confirm your selection and submit request.

Check 5: Check your nominated beneficiary

Take time to ensure you have a valid death beneficiary nomination in place in your super fund as this isn’t covered by your will. This means your loved ones will not be put through unnecessary difficulties to finalise your estate.

Most binding nominations expire every three years. Some super funds have an option where nominations do not expire and remain in place until they are revoked.

If you don’t nominate a beneficiary, your fund may not know who your benefit should be paid to. In these cases, they will follow the law. This usually means they pay it to one or more of your dependents or your legal personal representative.

To check or nominate your death beneficiary:

Refer to your super fund’s website or contact them to check if you already have a valid nomination in place
To update it, complete the form from your super fund, sign and date in the presence of two witnesses
If you are unsure, contact your super fund or seek independent financial or legal advice from a qualified advisor

Why you should review your super

Your super is one of the biggest assets you’ll accumulate in your lifetime.

However, many Australians think they don’t need to worry about their super until retirement. Some don’t think about it at all.

It’s never too early to think about your super and the earlier you get on top of it, the better. It’s a good idea to regularly review and manage your super. At the very least, make sure you:

are getting the super you are entitled to from your employer
know where it is.

Small decisions you make today can have big impacts on your final super outcomes. For instance, missing out on some employer contributions today, could have a huge impact on your super balance in retirement due to the compounding effect of earnings. The same can happen if you have lost or unclaimed super.

Benefits of a super health check

A super health check consists of 5 simple and important things you can do to get on top of your super. It will help you:

manage your super
understand your entitlements
make better choices for when you retire.

You can check on your super at any time. However, we suggest you get into the habit of doing a health check each year when you prepare your tax return.

CONTACT ALLAN HALL SUPERANNUATION

Disclaimer: This article contains general advice only and has been prepared without taking into account particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should assess its relevance to your individual circumstances. The information provided in this newsletter is objectively ascertainable and therefore does not constitute financial product advice. If you require personal advice, please contact us to arrange an appointment with one of our licensed SMSF advisors. Source: ATO

ATO, contributions, employees, employer, insurance, self-managed superannuation SMSF, superannuation, tax return

Federal Budget ATO compliance crackdown

Posted on 26 May 2023 | by Allan Hall

Increased number of reviews

The importance of audit insurance in the wake of the Federal Budget – did you know that you can get insurance that covers the costs of professional fees incurred to respond to an ATO audit?

The recently announced Federal Budget 2023 has unveiled significant funding increases ($588M) in the government’s stance towards tax compliance, particularly through the Australian Taxation Office (ATO). GST compliance,and Personal income tax deductions have been specifically named by the government as areas of risk.

If you are in business, audit insurance is an often-overlooked component of business insurance, however in an environment where compliance scrutiny is intensifying, having audit insurance serves as a proactive measure to safeguard one’s financial interests.

Extended audit scope

Even if you are not in business, you may be a high-income earner, or have investment properties, the scope for an ATO review is much greater than in the past. You should be aware of safeguarding your financial well-being and know that you are not immune to tax compliance scrutiny (and review).

As complexities within our tax system increase, the time and expertise required to respond effectively to ATO reviews also escalate, resulting in more costs to simply respond to the review, not including ongoing management of the ‘case’ to completion. The potential cost of such services is increasing, with accountants needing to spend many hours (at hourly rates) to address detailed audit correspondence and liaise with clients.

Audit insurance offers coverage for professional fees incurred in responding to ATO and other government department reviews.

Investing in audit insurance ensures that individuals are also financially prepared to handle these reviews without incurring a significant cost burden.

With a substantial allocation of government funding towards tax compliance, the ATO aims to enhance its ability to address emerging risks and generate additional revenue. In light of these developments, it becomes increasingly crucial for businesses and many other taxpayers to consider the importance of audit insurance as a protective measure.

Income thresholds changes to the private health insurance rebate

Posted on 1 May 2023 | by Allan Hall

Changes to income thresholds

The income thresholds used to calculate the private health insurance rebate will increase from 1 July 2023.

Before this date, the threshold had remained unchanged for eight years and had remained at the 2014–15 levels during this period. This means that some individuals and families who were previously ineligible for the rebate may now be eligible, while others who were eligible may now be ineligible.

Rebate Percentage Rates

Understanding the income threshold and rebate percentage rate for the private health insurance rebate is essential for determining your entitlement.

To determine your rebate entitlement, you can use the Private Health Insurance Rebate Calculator available on the Australian Government’s Private Health Insurance Rebate webpage.

Remember, your family status on the last day of the income year (30 June) determines whether the single or family income thresholds apply to you. If you were single on 30 June but had dependent children, you are considered a family and will be income tested using the family income thresholds.

2023–24 Income thresholds

Family status	Base tier	Tier 1	Tier 2	Tier 3
Single	$93,000 or less	$93,001 – $108,000	$108,001 – $144,000	$144,001 or more
Family	$186,000 or less	$186,001 – $216,000	$216,001 – $288,000	$288,001 or more

Overall, these income thresholds play a significant role in determining the amount of tax an individual or family will be required to pay each financial year. It is important to stay informed about these thresholds to ensure that you are meeting your tax obligations and avoiding any penalties. If you have any questions or concerns about your tax obligations, it is recommended that you seek advice from a qualified tax professional.

CONTACT ALLAN HALL BUSINESS ADVISORS

Insurance for tax audit costs

Posted on 21 April 2023 | by Allan Hall

Limit your costs in the event of an audit with tailored coverage

The ATO has been funded with an additional $1.5 billion to increase the volume of audits and reviews, making it more likely that businesses and individuals will be audited.

Considerable costs can be involved in responding to an ATO tax audit, as you may need your accountants to prepare detailed responses and compile supporting documentation.

The costs can quickly add up to significant levels for the work involved.

AuditCover audit insurance covers professional fees in the event of an audit. Policies are available starting from $99 for individuals and $150 for businesses and groups, and the premium is tax deductible.

AuditCover audit insurance covers audits and reviews for:

Capital Gains Tax
Income Tax
Land Tax
Payroll Tax
Workers Compensation
BAS/GST Compliance
Superannuation Guarantee
Fringe Benefits Tax
Stamp Duty and more…

CLICK HERE TO GET A QUOTE

For any questions please call AuditCover on 1300 895 797 or read more here. Allan Hall clients are invited to obtain a quote from AuditCover.

DISCLAIMER: As with any insurance, it is important that you read the Policy Wording and ensure that the product is right for you. This page is intended to provide general information about tax audits and AuditCover and does not constitute advice.

CONTACT ALLAN HALL BUSINESS ADVISORS

Why does insurance matter?

Posted on 28 March 2022 | by Allan Hall

The unexpected events of the past few years, have made financial protection a front of mind matter for most Australians.

Now more than ever we appreciate that life does not always go the way we plan. Having a plan in place if things do take an unexpected turn can mean that our health, lifestyle and family are better protected.

If you don’t have any type of personal insurance cover, or you have not reviewed it with your Financial Adviser for a while, now is a good time to do so.

Types of insurance

There are a few different types of insurance that you should consider, based on what matters to you and what you would most like protected if you were to suffer an illness, injury, disablement or premature death. It’s best to discuss insurance options with your Financial Adviser as they can tell you what different types of insurance policies are available, what they cover, and how to structure them in your overall financial plan, based on your individual situation and goals.

The types of insurance policies you may discuss are:

Life insurance
Total and Permanent Disablement insurance
Critical illness insurance also called Trauma cover
Income Protection insurance.

The benefits of an insurance policy

FAMILY FIRST

You and your loved ones count on your income to enjoy a certain standard of living, which is why insurance is particularly important if you have dependents. It means the people who matter most in your life are protected from financial hardship if your income stopped.

LESS STRESS

Profound unforeseen illness, injury, permanent disability, and death –are not nice to think about but these events happen. If it happened to your family it would probably be an extremely challenging time, wrought with emotional stress, and even grief. With personal insurance in place, the financial stress can be reduced, allowing you to focus on getting well, and rebuilding your life.

FINANCIAL SECURITY

Illness, injury and disablement do not come cheap. If you needed funds to recover from illness or injury would you have enough disposable income to cover medical bills whilst still paying your household expenses? Could you modify the home if need be? Would you want access to the best medical cover, treatments and rehabilitation options?

Insurance provides financial security so your life can continue with as much normalcy as possible, whilst you seek the best care available.

At a time when everything else seems out of control, it is good to know your financial security isn’t!

The difference a Financial Adviser can make

Data collected by APRA found that in the case of Total & Permanent Disability cover, the “claim declined” rate was around double for claimants who arranged their cover direct with the insurer than for claimants who went through an adviser. In other words, you have a much greater chance of success with an adviser.[1]

A Financial Adviser looks at your specific circumstances, your lifestyle, goals and appetite to risk. Together you can discuss personal insurance policies, tapping into their expert knowledge and understanding of the requirements of insurance providers. You can also discuss options for holding insurance inside and outside of superannuation and, should you need to make a claim on a policy, your Financial Adviser can liaise with insurance companies and superannuation entities on your behalf as your advocate.

If it’s time to consider personal insurance cover, or you want to review your existing policy, a Financial Adviser is willing and able to assist you.

General Advice Warning

The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Mark O’Connell, Robin Bell and Allan Hall Financial Planning Pty Ltd are Authorised Representatives of Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323.

^[¹^] APRA: Life insurance Claims and Disputes Statistics, June 2021 (issued 19 October 2021)

11 Tax Facts About Superannuation

Posted on 11 October 2021 | by Allan Hall

Compared to other investment structures, super is widely considered to be one of the most tax-effective investment structures available from a wealth accumulation and cash flow generation perspective.

Although not a comprehensive list, below are 11 of the top tax facts about super.

Please note: Each tax fact isn’t covered in detail (only a brief snapshot is provided), other important considerations go with each. For example, it’s important to consider things such as contribution eligibility, and conditions of release. To discuss how any of the below may be relevant to your situation, talk to your Financial Adviser.

Super investment structure

Overview

When investing via super, it’s important to understand that there is an accumulation phase and a retirement phase. From a life stage perspective:

Accumulation phase generally coincides with the time in your life where contributions are being made to your super, and you are accumulating wealth via these contributions and investment earnings. Nearing retirement, some of us may commence a transition to retirement income stream (TRIS).
Retirement phase generally coincides with the time in your life where you are using the wealth you have accumulated to help fund your retirement lifestyle via either a retirement income stream, lump sum withdrawals, or a combination of both.

With the above in mind, from a tax perspective, the tax facts listed below are grouped according to their relevance to each phase. For example, the tax facts regarding contributions are underneath the title ‘Super (accumulation phase)’, as contributions can’t be made to a super account in retirement phase.

Super (accumulation phase)

Investment earnings in your super. Investment income is generally subject to a maximum of 15% tax. And, capital gains on assets held for longer than 12 months receive a 1/3 (33%) tax discount, which effectively reduces the tax rate to 10%.
Concessional (pre-tax) contributions to your super. The amount contributed is reduced by a tax of 15% (contributions tax). When considering salary sacrifice and personal deductible contributions (types of concessional contributions), this tax of 15% may be lower than your marginal tax rate. Please note:
1. If you have income and concessional contributions totalling more than $250,000, you can pay an additional 15% tax (called Division 293 tax) on some or all of your concessional contributions.
2. If you have adjusted taxable income of $37,000 or less, you may be eligible to receive the low-income super tax offset (up to $500).
3. Making concessional contributions to pay for premiums for certain insurance held through super can reduce contributions tax.
Non-concessional (after-tax) contributions to your super. The amount contributed isn’t reduced by a contributions tax. Please note:
1. If you have total income less than $54,837, you may be eligible to receive the Government co-contribution (up to $500).
2. If you make a spouse contribution (i.e. non-concessional contribution to your spouse’s super), you may be eligible to receive the spouse contribution tax offset (up to $540). The receiving spouse’s income must be less than $40,000.
Insurance in your super. Your super fund trustee can generally claim the insurance premiums as a tax deduction, reducing the tax paid by your super fund trustee on your concessional contributions and super earnings. The tax saving is often rebated to your super account, effectively reducing the premium cost by 15%.
Saving for a home deposit via your super. If you make voluntary contributions, you may be eligible to withdraw all or part of these contributions plus associated earnings for use as a deposit via the First Home Super Saver Scheme. Please note:
1. The maximum amount that can be withdrawn is $15,000 of voluntary super contributions per financial year made since 1 July 2017 (up to a total of $30,000 across all years). The amount that can be withdrawn is 100% of eligible non-concessional contributions, 85% of eligible concessional contributions, plus 85% of associated earnings. Tax is payable on the associated earnings and concessional contributions portion of the withdrawal (taxed at marginal tax rates, including the Medicare Levy, less a 30% tax offset).
Small business capital gains tax (CGT) concessions. If you are considering selling a small business or the assets it uses, you may be eligible for CGT concessions that help reduce the taxable capital gain associated with the sale, and build your super retirement nest egg in the process. Please note:
1. You may be able to contribute amounts from the CGT 15-year asset exemption and retirement exemption to your super, without using your non-concessional contributions limits.
Pension payments from your super. Pension payments from an accumulation phase transition to retirement income stream (TRIS) are generally tax-free if you are aged 60 or over. If you are under age 60, the taxable portion of pension payments is taxed at your marginal tax rate, less a 15% tax offset.

Super (retirement phase)
Investment earnings in your super. Investment income and capital gains are generally tax-exempt. Please note: The transfer balance cap, which is currently set at $1.6 million (indexed) per person, limits the amount of super benefits that can be transferred to retirement phase.
Pension payments from your super. Pension payments received from a retirement income stream (eg account-based pension or retirement phase TRIS) will be tax-free to you if you are aged 60 or over at the time of receiving the pension payment.

Super (accumulation or retirement phase)
Lump sum withdrawals from your super. Any lump sum withdrawals made after 60 years of age are generally tax-free. If you make a lump sum withdrawal and you are aged between preservation age and 60, the taxable component of the lump sum is taxed as follows:
1. The amount up to the low rate cap amount (currently $215,000) is tax-free.
2. The amount above the low rate cap amount is taxed at 15% (plus the Medicare Levy).
Passing away and your super:
1. A death benefit lump sum paid to a nominated beneficiary who is a tax dependant is received entirely tax-free. If the beneficiary is a tax non-dependant, then any tax-free component is tax-free, but the taxable component is taxed at 15% (taxed element) or 30% (untaxed element), plus the Medicare Levy.
2. Income payments from a reversionary death benefit income stream paid to a nominated reversionary beneficiary who is an eligible pension recipient dependant are received entirely tax-free if you or the reversionary beneficiary are aged 60 years or over at the time of your passing. If both you and the reversionary beneficiary are under 60 at the time of your passing, the pension payments from the reversionary death benefit income stream are taxed as follows:
  1. the tax-free component is tax-free, and
  2. the taxable (taxed element) component is taxed at marginal tax rate plus Medicare Levy, less 15% tax offset.

However, when the reversionary beneficiary turns 60, the pension payments from the reversionary death benefit income stream are tax-free.

Talk to us

Each tax fact outlined above isn’t covered in detail (only a brief snapshot is provided) and other important considerations go with each. For example, it’s important to consider things such as contribution eligibility, and conditions of release. To discuss how any of the 11 tax facts about superannuation may be relevant to your situation, give us a call. We would love to hear from you!

General Advice Warning

Mark O’Connell, Robin Bell and Allan Hall Financial Planning Pty Ltd are Authorised Representatives of Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323.