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  • Taxation of super benefits

    Super benefits paid to you from your super fund can be received as a super income stream, super lump sum, or a combination of both. The withdrawal option you choose may affect the amount of tax you pay.

    The amount of tax payable on any amount of super you withdraw from your super fund is based on:

    • your preservation age and the age you will be when you receive the payment
    • whether your accrued benefit is tax-free or taxable
    • whether you choose to receive your payment as an income stream or lump sum.

    A super benefit may comprise of a tax-free component and a taxable component. The taxable component may consist of a taxed element and/or an untaxed element. Your super fund can tell you how much of your super is tax-free or taxable.

    Different tax rates apply to the taxable component your super benefit depending on your age at the time you expect to withdraw your super, and whether you receive your super benefit as an income stream or lump sum.

    To find the tax rates applicable, choose a link below that best applies at the time you expect to withdraw your super benefit.

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    Defined benefit income streams

    From 1 July 2017, if you are receiving an income stream from a defined benefit super fund, the 'defined benefit income cap' limits the amount of tax-free income you can receive from a capped defined benefit income stream.

    A super benefit paid from a defined benefit super fund may be taxed if you exceed your defined benefit income cap.

    For 2017–18 the defined benefit income cap is $100,000.

    If you are receiving an income stream from a defined benefit super fund, you should check with your super fund to determine if it is a capped defined benefit income stream.

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    Last modified: 24 Oct 2018QC 31873