Becoming financially independent and secure – budgeting, saving, debt and other key matters.

4g. Understanding superannuation

Est. read time: 3 min

Response to COVID-19: Changes to Superannuation Rules

Eligible people will be able to apply to access up to $10,000 of their super before 1 July 2020 and a further $10,000 from 1 July 2020 until 31 December 2020.  More information about early release of superannuation and eligibility requirements can be found at the Australian Government Treasury website.

The Government has temporarily reduced minimum drawdown rates.  This will benefit retirees in volatile market conditions by reducing the amount of investments they need to sell to fund minimum drawdown requirements. The Government has reduced the upper and lower social security deeming rates, which will result in an increase in the Age Pension for most people.  Further information can be found on the Australian Government Treasury website.

What is Superannuation?


Superannuation is a tax effective way to save for your retirement. It's similar to a managed fund where your money is pooled with other members' money and invested on your behalf by professional investment managers, and grows over time. Generally you will not be able to access this money until you reach your ‘preservation age'.

Preservation age is the minimum age, set by law, you must reach before you can access your superannuation funds. Your preservation age is currently between 55 and 60, depending on when you were born. When you reach preservation age, you can access your super as long as you are permanently retired (or reached age 65). If you haven't permanently retired, you can still access part of your super via a transition to retirement pension. More information, including the limited circumstances in which you may be able to access your superannuation early, can be found at MoneySmart's transition to retirement website and MoneySmart's getting your super website.

Your employer will make contributions into your superannuation fund and you can top it up with your own money. The government may also make contributions if you are a low income earner. More information about government contributions to your superannuation fund can be found at the Tax office's website.

Do you have Superannuation?

  • Check for any annual superannuation statement issued to you. This will give you a good indication of where your superannuation is held and how much you have.
  • If you don't know / lost track of your superannuation, you can check by registering for the Australian Taxation Office's online services via myGov. This will allow you to see details of all your super accounts, including any you may have lost or forgotten about.
  • Once you have found all your super accounts, you can consolidate them into one account by completing a balance transfer form for each super account you want to transfer from and mailing it to your retained super fund.

I do not have any superannuation


If you are entering into the workforce for the first time and have not had any superannuation account in the past, your employer will put the money into a ‘default' super fund, known as a MySuper account. You can also choose a specific superannuation fund to have your super paid into if you wish.

How to choose a super fund


In most cases, you will be able to choose the fund that you'd like to have your super contribution paid into. For more information see the MoneySmart's information page on choosing a superannuation fund.

Some industrial awards specify a fund or a choice of a few funds that superannuation must be paid into. In these cases you may have limited or no choice of fund.

Once you have chosen your super fund, tell your employer by filling in a standard choice form from the Australian Taxation Office or from your employer.

If you are divorced or separated


Getting your superannuation sorted after your relationship ends is an important step in planning for your future. Once you separate or get divorced, superannuation is treated as a type of property and can be divided by agreement or by court order.

Splitting from your partner does not mean you can convert your superannuation into cash – it is still subject to superannuation laws (for example, it is usually retained until retirement)

Options for splitting superannuation


Separating couples may either:

  • enter into a formal written agreement to split superannuation. A formal written agreement requires that both you and your ex-partner instruct a lawyer who must sign a certificate stating that independent legal advice about the agreement has been given. Once this agreement is made, you do not need to go to court. The agreement is not registered in court and you must be careful that each of you retains a copy;
  • seek consent orders to split superannuation; or
  • seek a court order to split superannuation (if you cannot reach an agreement with your former partner).

You should get legal advice about these options. These websites have helpful resources on superannuation splitting:

Early access to superannuation


In certain very limited circumstances you can access your superannuation early.  These would include include:

The Australian Taxation Office recognises that severe financial hardship often arises from Family and Domestic Violence circumstances, and offers a range of support for people in this situation, including early access to superannuation.

Early access to your superannuation now will mean that a reduced amount of superannuation will be available to you when you reach retirement age.

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