Cap on untaxed super lump sum benefits

What is included in a super lump sum benefit?

A super lump sum benefit can include a tax-free and a taxable component.

The tax-free component is the part of a benefit that is tax-free and does not count towards your assessable (or taxable) income.

The taxable component is the part of the benefit that is taxable. Though tax must be paid on the entire taxable component, it may include two parts - one where tax has already been paid in the fund and one where tax has not yet been paid. These are called taxed and untaxed elements of the taxable component.

• A taxed element is the super that has already had tax paid on it in the fund. It may need to have additional tax paid on it once it is paid out, depending on your age when you take the lump sum. You may need to include the taxed element in your tax return.
• An untaxed element is the part of your payout that hasn't had any tax paid on it in the fund, but is still taxable. You must include it in your tax return.