What is superannuation?

Uncover the secret of superannuation

Superannuation or ‘super’ is saving money for when you retire.

Although that might seem like a long way off, remember that it’s your money and it will start being allocated into super as soon as you earn over $450 per month.

How does it work?

Money is put into a super fund by your employer.

Once you are over 18 and earning more than $450 per month, your employer is legally required to deposit an extra 9.5% per cent of your wage into your superannuation fund.

You can also make voluntary contributions from your pay or savings to increase your super.

Your money is invested by your super fund to make it grow over time.

Why is it important?

With a retirement age of around 65 years and Australia’s average life expectancy at about 80, there are 15 to 20 years where you will need to have some money saved up to live on.

While there is likely to always be some kind of age pension, many people will want to have extra money to enjoy their retirement.

What types of funds are there?

  • Industry funds – run jointly by employers and unions solely to benefit their members.
  • Retail funds – run by financial institutions for profit.
  • Employer Stand-alone funds – run by one employer for their employees.
  • Self-managed funds – run by an individual for him or herself.

Does everyone get superannuation?

To be eligible to receive superannuation contributions

  • You must earn over $450 per calendar month
  • Be under the age of 70 years old
  • Be working full-time, part-time or casual.
  • If you’re under 18 years of age you must also work a minimum 30 hours a week to get superannuation contributions. However some Awards may have superannuation entitlements included in them – regardless of the hours you work and what age you are.
  • Apprentices and trainees are also entitled to superannuation if they work more than 30 hours per week and earn more than $450 per month.

How do I get my money out of super?

Until you are 55 years old you can’t withdraw the money for other things. Under exceptional circumstances this is possible, but generally you can’t.

You can move your money from one super fund to another at any time.

Boosting your superannuation

You can make extra payments into super from your savings, or  by deducting more from your pay.

If you earn less than $49,488 per year (before tax) and make after-tax super contributions, you are eligible to get matching contributions from the government. This is called the government co-contribution.

If you earn less than $34,488 the maximum co-contribution is $500, based on 50c from the government for every $1 you contribute. The amount of co-contribution reduces as your earnings increase.

I want to find out about my super…

The amount of money your employer pays into super should be listed on your payslip.

Most super funds also have a website where you can login to view your account.

If you are not sure about which superannuation fund you are in, speak to the people at work who do your pay and they will have the information for you.

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This editorial provides general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your particular investment objectives, financial situation and individual needs.

Details included in this article are subject to change. While we endeavour to keep all information up to date, ACTU Worksite can’t make any guarantees as to the accuracy of this information.

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