Key factors that affect how your super payout is taxed

I'm 60 or over and will be paid a lump sum (untaxed element)

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

If you:

• are 60 years old or over, and
• receive a lump sum super benefit that includes or consists entirely of an untaxed element

the untaxed element or amount is:

• included in your assessable income
• subject to your marginal tax rates (plus Medicare levy).

You will pay:

• no more than 15% tax (plus Medicare levy) on any amount up to the untaxed plan cap amount
• the highest marginal tax rate (plus Medicare levy) for any amount over the untaxed plan cap amount.

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 15% (plus Medicare levy) for untaxed elements up to the untaxed plan cap amount.

You are entitled to a separate untaxed plan cap for each plan from which you receive super lump sum benefits. However, the cap is reduced by the untaxed element of each benefit you receive from the same payer.

The untaxed plan cap amount for 2011-12 is $1,205,000. It is indexed annually according to average weekly ordinary time earnings. For untaxed plan cap amounts refer to Key superannuation rates and thresholds.

Example 1

John is a public servant and receives a super lump sum on 1 August 2011 of $500,000 at age 60. His super fund tells him that this amount includes an untaxed element of $350,000, a taxed element of $100,000 and a tax-free component of $50,000.

John will include the $350,000 untaxed element in his assessable income and pay the following tax:
Tax-free component: $50,000	no tax
Taxed element: $100,000	no tax, as he is 60
Untaxed element: $350,000	no more than 15% 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 untaxed element of your payout is taxed

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