Key factors that affect how your super payout is taxed

I'm under my preservation age and will receive a lump sum (taxed element)

How will the taxed element of my lump sum super benefit be taxed?

If you:

• are below your preservation age, and
• receive a lump sum super benefit that includes or consists entirely of a taxed element

the taxed element is:

• included in your assessable income
• subject to your marginal tax rates (plus Medicare levy).
• will pay no more than 20% tax (plus Medicare levy).

In 2011-12, the flood levy may apply to this payment, where an individual's taxable income exceeds $50,000. We have published information to help you work out if the flood levy applies to you.

You will receive:

• a tax offset to ensure that the rate of tax payable is no more than 20% (plus Medicare levy).

If you receive a disability super benefit as a lump sum, your tax-free component is increased to broadly reflect the period where you would have expected to have been gainfully employed. The tax-free component of your benefit is always not assessable and not exempt income, that is, it is tax-free.

Example 1

Suzi is 50 and receives a lump sum super benefit of $110,000 on 17 October 2011. Her super fund tells her that this amount consists of a tax-free component of $10,000 and a taxable component made up entirely of a taxed element of $100,000.

Suzi will include the $100,000 taxed element in her assessable income and pay the following tax:
Tax-free component: $10,000	no tax
Taxed element: $100,000	no more than 20% tax (plus Medicare levy)

In 2011-12, the flood levy may apply to this payment, where an individual's taxable income exceeds $50,000. We have published information to help you work out if the flood levy applies to you.

How do I fill in my tax return?

Sections within How the taxed element of your payout is taxed

• I'm under my preservation age and will receive a lump sum (taxed element)
• I'm under my preservation age and will be paid a pension or income stream (taxed element)
• I'm between my preservation age and 60 and will be paid a lump sum (taxed element)
• I'm between my preservation age and 60 and will be paid a pension or income stream (taxed element)
• I'm 60 or over and will be paid a lump sum (taxed element)
• I'm 60 or over and will be paid a pension or income stream (taxed element)