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  • Taxation of super benefits

    Superannuation 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
    • the type of super income stream you receive.

    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. Your super fund can also tell you if your super income stream is a capped defined benefit income stream.

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

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    Capped defined benefit income streams

    From 1 July 2017, if you are receiving a capped defined benefit income stream, the 'defined benefit income cap' limits the amount of tax-free income you can receive from these income streams and may reduce your entitlement to the 10% tax offset on any untaxed element.

    For 2019–20 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: 01 Jul 2020QC 31873