?Australia is known as "the lucky country" and for good reason too! Not only do we have some of the best health and education systems in the world, but we also have a mandatory superannuation scheme that ensures each and every employer pays a minimum of 9% into their employee's nominated super fund. However, this superannuation guarantee didn't always exist. It wasn't until 1992 that the Keating government brought this in to make certain that every Australian could have a comfortable retirement. Employers and Superannuation Employers are required to pay their employees super contributions at least every three months. Employees now have the option to elect which super fund their employer is to pay the contributions to, yet most employers offer a default super fund should the employee not have a preferred one. The superannuation guarantee law does not apply to people earning less than $450 a week or people under the age of 18 or over 70. Therefore if an employee falls into this category, the employer is not required to make these contributions, but still can if they wish to. Accessing Your Super Superannuation laws have strict guidelines as to when a person can have access to their super money. The only exception to these rules is when a person is in severe financial hardship or compassionate grounds where the person may need medical treatment that is not covered by the Medicare system. In most cases, superannuation benefits come under three headings: ? preserved benefits; ? restricted non-preserved benefits ? unrestricted non-preserved benefits. Preserved benefits - these are benefits which cannot be touched until the person has reached 'preservation age' (A preservation age is the minimum age in which someone can retire and utilise their superannuation). Currently, all working Australians must reach 55 before they can access their super funds. Restricted non-preserved benefits - these are benefits which aren't preserved, yet cannot be accessed until an employee meets a condition of release, like leaving their employment which then ceases their involvement in an employer superannuation scheme. Unrestricted non-preserved benefits - these are benefits which do not need a condition of release, and may be accessed upon the request of the worker. Taxes on Superannuation In Australia, tax is calculated at 15% on superannuation at three different points throughout the life of the fund. These are at times of contributions, on the person's earnings and lastly at the final payout of the fund. It should be noted that the final payout may be tax free if you are over 60 years old. Many people choose to use their superannuation as way of paying less tax purely because contributions are taxed at a far lower rate than income tax. Self Managed Super Funds give you total control over how your superannuation is invested. Take control & establish your own SMSF today.
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