Taxation

WHEN CONTRIBUTED TO YOUR CBUS ACCOUNT 

Generally, there are two different types of contributions, each has a different tax treatment:

WHILE IN YOUR CBUS ACCOUNT

Cbus' investment earnings are taxed at 15%.  This can provide significant advantages when compared with individual marginal tax rates for other investments.  Cbus distributes all its earnings to its members once tax, costs and reserves are deducted.

WHEN WITHDRAWN FROM YOUR CBUS ACCOUNT

• If you are over age 60, your superannuation benefit from Cbus will generally be tax free, regardless of whether the benefit is paid as a lump sum or income stream.
• If you are under age 60 but over your preservation age, you will receive the first $140,000 (taxable component) of your lump sum benefit tax free.  Any amount over the $140,000 will be taxed at 15%*.
• If you have not yet reached your preservation age and you are withdrawing an amount of your superannuation under special circumstances (e.g. financial hardship), you will be taxed at 20% on the taxable component.

If you are looking to roll your benefit into an income stream, see the Cbus Super Income Stream Taxation section.

*Please note: The $140,000 limit is the lifetime tax-free amount, increasing each year with indexation in increments of $5,000 (in line with Average Weekly Ordinary Time Earnings 'AWOTE').

SELF-EMPLOYED - CLAIMING A TAX DEDUCTION 

You are entitled to claim a tax deduction for contributions to your own superannuation.  Cbus sends self-employed members a Notice of Intention to Deduct Contributions (previously known as a Section 82 AAT notice) at the end of the financial year.  The notice shows the amount you have paid in superannuation contributions during the year.  If you want to claim a tax deduction for your superannuation contributions, you must complete the form accompanying the notice and return it to Cbus.

Cbus will only deduct the Federal Government's contribution tax if you notify us of your intention to claim a tax deduction for your contributions.  In this case, the amount deducted for tax will be 15% of the balance of the contributions you are claiming, after fees and insurance premiums have been deducted from them.

Am I classed as Self-Employed for Superannuation purposes?

If you have been substantially 'self-employed' during a particular financial year, the ATO may still treat you as if you had been wholly self-employed.  In this case you will still be eligible to claim a tax deduction.  To be considered as 'substantially self-employed', your assessable income from employment must be less than 10% of your total assessable income.

SPOUSE CONTRIBUTIONS 

A rebate of 18% is available on up to $3,000 of the contributions you have made to your spouse's superannuation account.

The maximum rebate of $540 is available when the receiving spouse's assessable income plus reportable fringe benefits is $10,800 or less.  The tax rebate cuts out when the 'receiving' spouse's assessable income plus reportable fringe benefits equal $13,800 per annum or more.

A spouse contribution counts as a non-concessional contribution for the spouse receiving the contribution. The contributing spouse's income does not affect the tax rebate - if eligible, they are entitled to receive the rebate regardless of how much they earn themselves.