What is a superannuation benefit payment?

A superannuation benefit payment is a lump sum payment from a superannuation fund.

If you are over age 60, your superannuation benefit payment is tax-free.

If you are under age 60, your superannuation benefit payment will comprise two different components.

Tax-free component:
This component is usually sourced from after tax income, such as personal contributions for which a tax deduction has not been claimed. Lump sum tax is not payable on this component and it is not included in your assessable income.

Taxable component:
This component is usually sourced from before tax income such as salary sacrifice and superannuation guarantee payments, for which employers can claim a tax deduction.

If you take your superannuation benefit payment before age 60, the taxable component is included in your assessable income, however the tax payable is limited to the rates shown below:

• Under age 55: 20 per cent + 1.5 per cent Medicare levy
• Age 55 – 60:
  • First $140,000: Tax-free
  • Excess over $140,000: 15 per cent + 1.5 per cent Medicare levy.