• Paying the surcharge

    When your surcharge is due and payable depends on the type of fund you belong to.

    If you are a member of an accumulation fund or funded defined benefit fund, your surcharge is due and payable within 30 days of their assessment issuing. This applies to most people.

    If you are a member of an unfunded defined benefit fund – including constitutionally protected funds (CPFs) – your surcharge is not payable until your benefit is paid.

    On this page:

    Accumulation funds and funded defined benefit funds

    The general rule is the super fund holding your surchargeable contributions pays the surcharge liability for those contributions.

    If you transferred your surchargeable contributions from one super fund to another, the fund holding your contributions when we assess them for surcharge is required to pay. This is the case no matter which fund reported the surchargeable contributions to us.

    If the surchargeable contributions are paid to you before we issue an assessment to your super fund, you are liable to pay the surcharge. This is because you currently hold the contributions (eg if you retired and your benefit was paid to you as a lump sum or pension).

    When we issue an assessment, it must be paid within one month. We may add a general interest charge to late payments.

    Unfunded defined benefit funds

    These funds are unable to pay your surcharge assessments when they are made each year – the notional contributions being assessed are not paid by your employer until you leave the fund and are paid a super benefit.

    Your unfunded defined benefit fund will keep a surcharge debt account for you, to record the amount of surcharge assessed for the 1997–2005 financial years.

    Interest will also be added based on the outstanding balance of your surcharge debt account on 30 June each year using the 10-year Treasury bond rate.

    The surcharge legislation requires your fund to impose this interest to ensure the value of your accumulated surcharge debt is maintained over time.

    You can make a voluntary payment directly to your fund at any time to reduce the balance of your surcharge debt account and reduce the interest payable at the end of the financial year.

    There are many personal financial factors relevant to your decision to make voluntary payments. Seek professional advice before you make any voluntary payments.

    Your surcharge liability is deferred until a super benefit is paid by your fund. This occurs when:

    • you receive a lump sum payment, or begin receiving a pension, or
    • you transfer your contributions, or
    • a payment is made to your spouse on marriage breakdown, or
    • a benefit payment is made upon your death.

    Your fund must pay the balance of your surcharge debt account on your behalf within one month of one these events occurring.

    The surcharge liability amount may be deducted from your final benefit payment by your fund.

    Constitutionally protected super fund members

    We will keep a surcharge debt account for you to record the surcharge assessed on the surchargeable contributions reported by your fund for the 1997–2005 financial years.

    Interest will be added to the debt account based on the outstanding balance of your surcharge debt account on 30 June each year using the 10-year Treasury bond rate. This interest ensures the value of your accumulated surcharge debt is maintained over time.

    You can make a voluntary payment directly to us at any time to reduce the balance of your surcharge debt account and reduce the interest payable at the end of the financial year.

    There are many personal financial factors relevant to the decision to make voluntary payments. Seek professional advice before you make any voluntary payments.

    Your liability to surcharge is deferred until a super benefit becomes payable to you by your fund. This occurs when:

    • you receive a lump sum payment, or begin receiving a pension
    • you transfer your contributions
    • a payment is made to your spouse on marriage breakdown
    • a benefit payment is made upon your death
    • the super fund ceases to be a constitutionally protected super fund.

    Your super fund advises us when your benefit becomes payable (including when you leave the fund or begin receiving a pension). They do this by lodging a Superannuation member exit statement for constitutionally protected funds (PDF, 169KB)This link will download a file.

    After we receive the form, we calculate your final liability and issue you a notice of final liability. You need to pay this amount within three months. We may add a general interest charge to late payments.

    Your final liability is the lesser of:

    • the balance of your surcharge debt account we hold
    • the employer-financed component amount (a percentage of the employer financed part of the benefit payable to you – or rolled over – that accrued after 20 August 1996 and before 1 July 2005).

    If you begin receiving a pension, you may be able to pay your surcharge liability from your benefits. Ask your fund if you can do this. If you transfer your benefits to another super fund, you can ask the new fund to pay the surcharge on your behalf.

      Last modified: 30 Aug 2017QC 18956