When you open a pension account, your money stays in the super system and keeps receiving investment earnings and tax benefits. No tax is payable on investment earnings in your REI Super Transition to Retirement or Retirement Pension account.
Tax free
If you’re 60 or over, your pension payments (including any lump sum withdrawals) are treated as tax-free.
When tax applies
If you access super before you are aged 60, then you may be taxed. The tax taken from your pension payments is based on a number of factors such as whether you have any tax-free amount, or whether you’ll claim the tax-free threshold of $18,200 and whether you’re eligible for the 15% tax offset.
Tax for members under 60
If you are under 60, your pension account is divided into a tax-free portion and a taxable portion.
Your tax-free amount is the total of:
- After-tax contributions (non-concessional contributions)
- Government co-contributions including Low Income Super contributions (when in effect and applicable)
- Pre-July 1983 benefits calculated at 30 June 2007
- Capital gains tax (CGT) exempt component, and
- Certain amounts of disability benefits received before 1 July 2007 (called the ‘pot – 1 June 1994 invalidity component’)
Your taxable amount:
- Your before-tax contributions, including employer superannuation Guarantee (SG) payments and salary sacrifice amounts
- Any personal contributions where you’ve claimed a tax deduction, and
- Investment earnings
Tax offset
You’ll receive a 15% tax offset on any taxable payment once:
- Your age is between your preservation age and age 60 years
- You’ve provided your Tax File Number
The tax offset is also available when an account is opened with the proceeds from a death benefit.