Here’s a tip that can potentially save you thousands of dollars. Check that your super fund has your tax file number.
If you joined a super fund before July 2007, or started your current job before July 2007, then your fund may not have your TFN.
Today however, (today means, effective since 1 July 2007), when you give your TFN to your employer on a TFN declaration (publication number NAT 3092), your employer must forward your TFN to your super fund.
If you’re not sure whether your fund has your TFN, check your member statement from your fund, or contact your super fund. If your super fund doesn’t have your TFN, you can expect the following to happen:
- No TFN: More tax on concessional contributions. If your super fund doesn’t have your TFN, then your employer’s Superannuation Guarantee contributions, and any other concessional (before-tax) contributions, are subject to 49% (top marginal tax rate – 47% plus 2% Medicare levy) rather than 15%. Note that from 1 July 2017, the penalty tax drops to 47% (45% income tax plus 2% Medicare levy). If you’re eligible to claim tax deductions for your super contributions, and your super fund doesn’t have your TFN, then expect the same tax hit on your super contributions.
- No TFN: Forget about non-concessional contributions. You cannot make non-concessional (after-tax) contributions unless your super fund has your TFN.
- No TFN: Forget about receiving the co-contribution. If your super fund doesn’t have your TFN, then you cannot make non-concessional contributions which means that you cannot participate in the co-contribution scheme. You can read about the co-contribution scheme in the SuperGuide article Cashing in on the co-contribution rules (2017/2018 year).
- No TFN: Forget about receiving the Low Income Super Contribution. Since 1 July 2012, if you earn less than $37,000 a year and you or your employer make concessional (before-tax) contributions to your super fund, then the federal government will pay up to $500 per financial year into your super fund. This payment is to ensure that you’re not worse off tax-wise by having money paid into a super account. If your super fund doesn’t have your TFN, you won’t get a cent. For more information on the LISC (renamed the Low Income Superannuation Tax Offset from July 2017), see article Super tax refund for lower-income earners to extend beyond 30 June 2017.
Note: If you run your own fund (that is, a self-managed super fund), then your personal TFN should already be in your fund’s records, but check anyway.
Super alert! As a measure to assist Australians in keeping track of existing super accounts when starting a new job, the federal government plans to introduce the use of pre-filled TFN, on TFN and choice of fund forms.