the gardener Posted October 29, 2019 Share Posted October 29, 2019 Hi, I’m on a 457 due to end in 18 months,after 8 years, just found out when I leave my super fund will be reduced by $32k. as I am leaving the country, this seems very excessive, anybody have experience of this $ grab? Quote Link to comment Share on other sites More sharing options...
Kenfrapin Posted October 31, 2019 Share Posted October 31, 2019 Is it probably the tax that your previously saved and is now being taken from it as you are getting your money back before retirement? Money going into a super is taxed at 15% It could be that now you are taking it out, there is more tax to pay which is set at your current income. So if you pay, say, 30% tax but perhaps thats the difference and thats why it looks like a big amount? Not sure without more details KnK Quote Link to comment Share on other sites More sharing options...
the gardener Posted October 31, 2019 Author Share Posted October 31, 2019 Hi, I have paid tax already on the super fund inputs, month by month for 8 years or so.It seems to be an exit tax on ex pats leaving.Yet another Oz creepy tax The Uk just allowed Oz 3 year workers to get a uk pension for life for a small contribution, not a reciprocal arrangement at all. Not to mention the Backpacker rip off, good luck for those kids.I am 60 and see the harsh tax system for what it is. Remember 40,000 Australians in London alone at any one time , immigration control mr Morrison? Quote Link to comment Share on other sites More sharing options...
NicF Posted October 31, 2019 Share Posted October 31, 2019 9 hours ago, the gardener said: Hi, I have paid tax already on the super fund inputs, month by month for 8 years or so.It seems to be an exit tax on ex pats leaving.Yet another Oz creepy tax The Uk just allowed Oz 3 year workers to get a uk pension for life for a small contribution, not a reciprocal arrangement at all. Not to mention the Backpacker rip off, good luck for those kids.I am 60 and see the harsh tax system for what it is. Remember 40,000 Australians in London alone at any one time , immigration control mr Morrison? You will have only paid tax at 15% unless you have paid in more than your annual concessional allowance (or what ever it is called). If you withdraw your super before retirement age the government then expects you to pay the tax you would have paid if the money had been paid to you as earnings rather than paid in to your super. Unless you are on a really low income this tax rate will be a fair bit more than the 15% you paid on the funds on the way in. The fact that super is taxed at your full tax rate if you withdraw it when you leave the country is not a secret and there have been threads about it on here in the past. You don't have to withdraw your super just because you are leaving the country and you could instead leave the money in the super fund until retirement and take it then. If you do this though ensure you cancel all insurances to prevent the fund being eaten away by unnecessary charges. 3 Quote Link to comment Share on other sites More sharing options...
NickyNook Posted October 31, 2019 Share Posted October 31, 2019 If you're 60, you can withdraw your Super as a lump sum, tax-free, anyway. https://www.superguide.com.au/retirement-planning/legal-ways-to-withdraw-your-super-benefits 2 Quote Link to comment Share on other sites More sharing options...
Kenfrapin Posted October 31, 2019 Share Posted October 31, 2019 Nic and Nick beat me to it But there are no surprises at all and the govt isnt double taxing. There is a similar provision in the UK too, not sure if the timeframe has changed, but if you changed jobs within 2 years you could get back your pension contributions, which I did just once way back in 2014. But it gets taxed exactly the same way its taxed here too, it will be taxed at your current income tax level which makes total sense. The lower tax of 15% going into the pension is because you cant access it for a long time. If you want to access it well then you just need to pay the right tax before you can use it 1 Quote Link to comment Share on other sites More sharing options...
NicF Posted October 31, 2019 Share Posted October 31, 2019 39 minutes ago, NickyNook said: If you're 60, you can withdraw your Super as a lump sum, tax-free, anyway. https://www.superguide.com.au/retirement-planning/legal-ways-to-withdraw-your-super-benefits I missed the fact the OP is 60. Might be worth getting some advice from a pensions expert about the best way of accessing the money to reduce potential tax liabilities. Quote Link to comment Share on other sites More sharing options...
Andrew from Vista Financial Posted November 1, 2019 Share Posted November 1, 2019 On 30/10/2019 at 01:39, the gardener said: Hi, I’m on a 457 due to end in 18 months,after 8 years, just found out when I leave my super fund will be reduced by $32k. as I am leaving the country, this seems very excessive, anybody have experience of this $ grab? Hello What you are referring to is known as the Departing Australia Superannuation Payment (DASP) and yes unfortunately release does carry quite a tax burden: https://www.ato.gov.au/Individuals/International-tax-for-individuals/In-detail/Super/Super-information-for-temporary-residents-departing-Australia/ However I understand that from April 2009 temporary residents are not subject to the same conditions of release as permanent/citizens which means retirement is not classified as a condition of release: https://superoracle.firststatesuper.com.au/getting-money-out-of-super/temporary-residents-and-conditions-of-release and https://www.moneymanagement.com.au/features/editorial/guide-superannuation-strategies-non-residents Hope this helps Regards Andy Quote Link to comment Share on other sites More sharing options...
NickyNook Posted November 1, 2019 Share Posted November 1, 2019 31 minutes ago, Andrew from Vista Financial said: Hello What you are referring to is known as the Departing Australia Superannuation Payment (DASP) and yes unfortunately release does carry quite a tax burden: https://www.ato.gov.au/Individuals/International-tax-for-individuals/In-detail/Super/Super-information-for-temporary-residents-departing-Australia/ However I understand that from April 2009 temporary residents are not subject to the same conditions of release as permanent/citizens which means retirement is not classified as a condition of release: https://superoracle.firststatesuper.com.au/getting-money-out-of-super/temporary-residents-and-conditions-of-release and https://www.moneymanagement.com.au/features/editorial/guide-superannuation-strategies-non-residents Hope this helps Regards Andy Wow. Never realised this. And it's not new either! So people on temp visas are treated completely differently to the rest of us and effectively get no option but to pay the additional tax when withdrawing their super. Very interesting. Quote Link to comment Share on other sites More sharing options...
Andrew from Vista Financial Posted November 1, 2019 Share Posted November 1, 2019 Yes I hadn't come across it for a while (pretty sure it is still current as have not heard to the contrary) but it certainly is interesting particularly if someone doesn't realise and makes additional contributions to super and is not looking at becoming a permanent resident. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.