HOSTPLUS Executive Member Guide

It is in your interest to give HOSTPLUS Executive your Tax File Number (TFN) when you join. 

Generally there are significant consequences if your TFN is not quoted or incorrectly quoted when contributions are made for you, such as:

• an additional tax of 31.5% is imposed on ‘No TFN’ contributions paid into the fund on your behalf, meaning you’ll pay 46.5% tax instead of 15% on employer contributions
• we cannot accept your personal contributions
• Government co-contributions are not payable.

The additional tax will be deducted:

• for contributions – each year as at 30 June or upon the member exiting HOSTPLUS Executive
• for benefits – upon payment of a benefit.

If you do not have a TFN contact the Australian Taxation Office www.ato.gov.au on 13 28 61. You can provide your TFN at hostplusexecutive.com.au or call 1300 HOSTPLUS Executive (1300 799 998).

You may claim the additional tax paid on No TFN contributions (the additional 31.5%) if you quote your TFN to HOSTPLUS Executive within three years from the end of the financial year that the additional tax for the No TFN contributions were payable.

If you quote your TFN to HOSTPLUS Executive:

• before 30 June, the additional tax will be credited to your account as at 30 June that year
• after 30 June, the additional tax will be credited as at 30 June the following year.

Example

Sam did not provide his TFN to the trustee before 30 June 2011. The trustee deducted the additional No TFN tax (46.5% instead of 15%) out of Sam’s account at 30 June 2011. On 20 July 2011, Sam quotes his TFN to the trustee. The trustee will credit the additional tax deducted on 30 June 2011 to Sam’s account on 30 June 2012.

Concessional contributions (including employer and self-employed contributions) are taxed at 15% on amounts up to $25,000 a year and 46.5% on amounts more than $25,000 a year if you are under 50 years of age.

Once you turn 50, concessional contributions are taxed at 15% for amounts up to $50,000 a year and 46.5% on amounts more than $50,000 a year. No contributions tax is payable on:

• personal contributions (or non-concessional contributions) for which you do not claim a tax deduction
• spouse contributions
• amounts transferred or rolled into HOSTPLUS Executive from other superannuation funds (except where it includes a post 30 June 1983 untaxed component such as a ‘golden handshake’) and
• Government co-contributions.

For non-concessional contributions, HOSTPLUS Executive is unable to accept contributions over the non-concessional contributions cap of $150,000. However, if HOSTPLUS Executive does inadvertently receive non-concessional contributions over the non-concessional cap, excess non-concessional contributions will be taxed at 46.5%. If you are under 65 years of age, you can contribute up to $450,000 tax free over a three year period. However, any more contributions made in that three year period in excess of the cap will be taxed at 46.5%.

See Section 2: How super works - Understanding contributions at www.hostplusexecutive.com.au

Superannuation contributions surcharge assessments issued by the Australian Taxation Office www.ato.gov.au will still apply for contributions paid for previous financial years if the surcharge has not previously been paid.

If you are self-employed or substantially self-employed (i.e. you earn less than 10% of your income, including assessable income and fringe benefits from an employer) you can claim a tax deduction. 

Eligible members intending to claim a tax deduction for their personal super contributions should lodge with their super fund a Notice of intent to claim or vary a deduction for personal super contributions form (NAT 71121) and receive a confirmation from the trustee the earlier of the following dates:

• the day that they lodge their tax return    
• the end of the income year following the year in which the personal contributions were made.

For more information or to download the NAT 71121 form visit the Australian Taxation Office www.ato.gov.au

Investment earnings are taxed up to a maximum rate of 15%. Where the assets are invested in Australian and international shares, the tax payable can be partly offset by imputation credits for franked dividends and foreign tax credits. Any capital gains are limited to two thirds of the gain or the whole of the gain with an indexed cost base, depending on the date that the assets were acquired.

Tax may be payable when you withdraw a lump sum benefit from HOSTPLUS Executive. The amount of tax will depend on your age, the amount of your benefit, the benefit components and how you decide to use the benefit.

Tax will not be payable if you roll over or transfer your benefits to another complying super fund or if you use your benefit to buy an income stream.

Lump sum benefits comprise two components.

1. The tax free component which includes:

• the contributions segment
• the crystallised segment.

The contributions segment generally includes all contributions made from 1 July 2007 that have not been included in the assessable income of the fund. Typically these would be a member’s personal contributions that are not claimed as an income tax deduction.

The crystallised segment includes the following existing components of a super interest that were consolidated into the tax-free component on 1 July 2007:

• the concessional component
• the post-June 1994 invalidity component
• undeducted contributions
• the capital gains tax (CGT) exempt component
• the pre-July 1983 component

The crystallised segment was calculated by assuming that an eligible termination payment representing the full value of the superannuation interest is paid just before 1 July 2007.

2. The taxable component which includes:

• an element taxed in the fund, and/or
• an element untaxed in the fund.

The tax that HOSTPLUS Executive deducts will only apply to the element taxed in the fund (for example the 15% tax paid on contributions and investment earnings). Any other tax payable will be assessed in your tax return following the payment of the benefit.

Where 15% contribution tax has been paid

1. This is the low rate cap amount, which is indexed in line with Average Weekly Ordinary Time Earning but only increases in increments of $5,000.

Note: The tax rate figures above include the 1.5% Medicare levy.

Where 15% contribution tax has not been paid

1. This is the untaxed plan cap amount, which is indexed in line with Average Weekly Ordinary Time Earning but only increases in increments of $5,000.
2. This is the low rate cap amount, which is indexed in line with Average Weekly Ordinary Time Earning but only increases in increments of $5,000.

Note: the tax rate figures above include the 1.5% Medicare levy.

When a part payment of super is made, you won’t be able to indicate whether you want the benefit taken from your exempt component or your taxable component. Instead, the benefit will generally include both components in the same proportion as they exist in the total benefit.

The table below provides an illustration where a member’s benefit consists of a taxable component as to 60% and an exempt component as to 40%.

Super for temporary residents

For information about contributions and tax on super for temporary residents see: Section 2: How super works - If you’re a temporary resident at hostplusexecutive.com.au

The Government has introduced a Temporary Flood and Cyclone Reconstruction Levy (Flood Levy) applying to taxable income for the 2012 Financial Year only. Individual taxpayers, except those affected by natural disasters, who have a taxable income over $50,000 will have to pay the Flood Levy as follows: 

The following superannuation benefits are considered to comprise all or part of (depending on the circumstances) an individual’s taxable income and may therefore be subject to the Flood Levy if the member’s overall taxable income exceeds $50,001:

No GST is payable on contributions, on benefits paid, rolled over or transferred, or on the net fund earning rate applied to a member’s account.

Death benefits are tax free when paid to tax dependants. 

A dependant for these purposes is a spouse, a child less than 18, a person with whom the deceased was involved in an interdependency relationship as at the date of death, or any other person who was a financial dependant of the deceased as at the date of death.

The definition of spouse includes same sex couples and the definition of child includes eligible children of same sex couples. This means that same sex couples and their children are able to access the same tax concessions on lump sum death benefits available to married and de facto opposite sex couples. In addition a spouse is recognised when the relationship is registered on the Register of Births and Marriages under State or Territory law.

Any untaxed element in a taxable component of a lump sum benefit – where the benefit included life insurance proceeds – will be taxed at 31.5% (including Medicare levy). The untaxed element is the proportion of your insured lump sum death benefit that relates to the period from the date of death to age 65, in comparison to your total service period.

If the lump sum death benefit is paid to a non-dependant, the taxable component will be taxed at 16.5% (including Medicare levy) but part of the benefit may be taxed at up to 31.5% (including Medicare levy) if it comprises of insurance proceeds. The tax free component will be tax free if paid to a non-dependant.

Total and Permanent Disability benefits are taxed as a lump sum benefit, with the taxable and tax-free components. Generally, the tax free component will include the proportion of the benefit that relates to the period from the date of total and permanent disablement to age 65.

Income protection benefits are generally taxed at your marginal tax rate.

If a member suffers from a terminal illness as certified by two medical practitioners (one being a specialist) and stipulating death within 12 months of the certification then lump sum superannuation benefits paid are exempt from tax.