Super basics – an audio guide
Understanding super – an audio guide
This guide provides general information about superannuation in audio format.
Superannuation, often called super, is money set aside for you by your employer for when you retire. The guide covers a range of super topics, including:
- who is eligible for super and how it is paid
- how to choose a super fund and make additional contributions
- how to keep track of your super and find your lost super.
Select a link below to listen to a specific section of the audio guide:
The information in this guide was current at March 2015.
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Audio guide transcript
Part 1 – Introduction
Welcome to your basic guide to superannuation – an overview from the Australian Taxation Office (ATO).
For ease of navigation, this recording has been divided into separate audio files, according to the following headings:
- Part 2 – What is superannuation?
- Part 3 – Choosing a super fund
- Part 4 – The 5-step super check
- Part 5 – Growing your super
- Part 6 – Keeping track of your super
- Part 7 – Accessing your super
- Part 8 – Where to go for more information
The recording lasts for approximately 10 minutes.
Part 2 – What is superannuation?
Superannuation is often called super. It is money saved during your working years to live on when you retire from work.
Super is important for you because the more super you save, the more money you will have for your retirement.
For most people, your employer pays amounts called ‘contributions’ into a super account for you. They pay these contributions on top of your salary or wages. There are laws about how much super your employer must pay. This is called the ‘super guarantee’.
Generally, your employer must pay super for you if you are 18 years old or over, and paid at least $450 before tax in a calendar month. Or if you are under 18 years old, and paid $450 or more before tax in a calendar month, and work more than 30 hours a week.
This applies whether you work casual, part-time or full-time hours, and if you are a temporary resident. You may also be eligible if you are a contractor who is paid primarily for labour.
From July 2014, your employer must pay a minimum of 9.5% of your ordinary time earnings each quarter into your super. The rate will gradually rise over the coming years.
Ordinary time earnings are usually the amount you earn for your ordinary hours of work. It includes things like commissions, over-award payments, shift-loading, certain bonuses and allowances, but doesn’t include overtime payments.
If you’re not sure if your employer is paying the correct super, talk to them about it. Ask how often they are paying your super, into which fund they are paying it, and how much they are paying.
You can also check your last Member statement from your super fund or contact the fund to confirm whether your employer has paid your super.
If you still believe your employer is not paying the super you are entitled to, phone the ATO on 13 10 20.
Part 3 – Choosing a super fund
Most people can choose the super fund they want their contributions paid into. If you’re eligible, your employer will give you a Standard choice form within 28 days of starting work for them, so you can make your choice in writing. If you do not choose a fund, your employer will choose a fund for you.
All employers have a nominated super fund, or ‘default fund’, where they make super guarantee payments for their employees who have not selected a preferred fund.
If you want to have your contributions paid into an existing super account but can’t remember your super fund account details, you can create a myGov account and link to the ATO to find your existing super accounts. myGov can help you find super savings you might have lost or forgotten about.
Part 4 – The 5-step super check
The 5-step super check helps you manage and keep on top of your super. Following these simple steps can make a difference to your super savings over time, meaning more money for you when you retire.
The first step is to check your super statements and ensure you are receiving the correct amount of super. Check you are getting your employer contributions and look at your superfund fees and insurance cover – make sure you are not paying for the same type of cover twice.
The second step is to make sure your super account has been linked to your TFN. By linking your super accounts to your tax file number you can keep track of and transfer your super by using myGov,
The third step is to find out how you can keep track of your super using myGov at ato.gov.au/superonline. Learn how you can look for any lost super and merge your super accounts into one, removing any additional super fees you may be paying.
The fourth step is to consider government contributions; find out if you are eligible at ato.gov.au/boostmysuper.
And the fifth step is to consider making extra super contributions to your account in addition to the 9.5% your employer pays on your behalf. Even the smallest amount can make a difference.
Part 5 – Growing your super
As well as the contributions your employer pays, you can add to your super by making your own contributions. You may be able to ‘salary sacrifice’ to super from your before-tax income, or contribute to super from your after-tax income.
If you choose to salary sacrifice contributions, your employer may make super guarantee contributions based on your new reduced salary.
There are limits called ‘caps’ on the amount you can contribute to your super each financial year without paying additional tax. If you contribute more than these caps, you may have to pay additional tax. If you are planning on contributing more than 30,000 dollars to your super from your before-tax income, including the employer contributions, seek advice from your tax adviser first.
If you’re a low-income or middle-income earner, you may be eligible for contributions from the Australian Government. The government will work out if you’re eligible and how much you’re eligible for, and contribute to your super savings for you.
For more information on these contributions and to see if you are eligible, visit our guide to super for individuals on our website.
Part 6 – Keeping track of your super
Your tax file number, also known as your TFN, is the key to keeping track of your super savings.
Make sure your super fund has your TFN – this will make it easier to keep track of your super, move it between accounts, and receive super payments from your employer or the government.
You can check whether your fund has your TFN by looking at the statements they send you.
If you’ve ever changed jobs, you could have super in many accounts. Register for myGov and link to the ATO to help you find super savings you might have lost track of or forgotten about.
Using myGov you can see all of your active super accounts and their balances, and move your super savings from multiple accounts into one preferred account. If the ATO is holding any super on your behalf, you can also select one of your super fund accounts for us to transfer the money into.
To register for myGov and link to the ATO for the first time, you’ll need documents to prove your identity.
For more information on myGov, visit ato.gov.au/superonline
Part 7 – Accessing your super
Generally, you can only withdraw your super money in certain circumstances. For example, when you retire or turn 65. However, there are some circumstances where you can access your super savings early, such as severe financial hardship and specific medical conditions.
If you legitimately need some of your preserved super earlier, ask your super fund about whether you may be able to access it before applying.
Beware of promoters offering various plans to gain early access to your super savings before you retire. The promoters of these plans will tell you that they can help you access your super savings for reasons such as paying off debts, buying a house or car, or even going on holiday. These schemes are illegal and heavy penalties apply if you participate.
Promoters of illegal super schemes usually encourage you to transfer your super from your super fund into a self-managed super fund (SMSF) to access your super before you are legally entitled to – claim that you can use your super for anything you want and charge high fees to the extent that you risk losing some or all of your super to them.
If you are approached about a scheme, phone us on 13 10 20 immediately for advice and to make sure your super is protected.
Part 8 – Where to go for more information
To find out more about super, visit our website at ato.gov.au/super or phone us on 13 10 20.
This information was provided to you by the Australian Taxation Office. We are committed to providing you with advice and information you can rely on.
The information in this recording was current at March 2015.
Your narrator was David.
This concludes the recording.
The guide provides general information about superannuation in an audio format, as well as an accompanying transcript.