Due to COVID-19 reasons and other family responsibilities, a number of temporary residents may be deciding to leave Australia permanently. While they are winding up their rental accommodation and other personal matters, one of the important assets they need to decide on, is how to manage their superannuation.
Questions that arise include: how to access my superannuation if I’m leaving the country permanently? How much tax will need to be paid? What is the paperwork required?
We will attempt to answer these questions here, but do note this is general advice only and one should talk to a qualified financial planner or check the Australian government website listed below for latest details.
What is Superannuation?
Superannuation is a way of saving money for your retirement. Employers must pay superannuation contributions on behalf of all their eligible employees. This compulsory contribution is called the superannuation guarantee or SG.
The aim of the superannuation guarantee is to ensure as many Australians as possible enjoy the benefits of superannuation income when they retire from the workforce. You and/or your employer can put money, called contributions, into a superannuation fund or retirement savings account.
Superannuation funds are managed by trustees whose responsibility is to ensure your money is invested with care. Each fund has its own rules, but must also follow government rules that are designed to ensure all superannuation is properly managed. If you are an eligible employee, your employer should contribute a minimum of 9.5% of your earnings base to a superannuation fund. They should do this at least every quarter (every three months).
Accessing your super as a temporary resident leaving the country
You can claim your super money in the form of a Departing Australia Superannuation Payment (DASP) after you leave Australia if:
- you visited on an eligible temporary resident visa such as a 457 visa;
- your visa has expired or been cancelled
According to a law passed on 1 April 2009, you no longer have the option of keeping your super fund open after your visa is cancelled or expired. About 6 months after this happens, your super fund will be closed and transferred to the “Unclaimed Monies” or “Lost Super” section of the ATO. It’s still your money and you can claim it, but the application process is different and has to be done through them directly.
If you apply while your super fund is still active, you can choose either online application or paper application:
Online Application Method: The easiest and quickest way to claim your super is to apply online, using the DASP online application system.
This is a free service where your visa status is checked automatically. You can start and save your online application at any time while in Australia. However, you can only submit your application once you have left Australia and your visa is no longer valid. Once the ATO approves your application, they send confirmation to your super provider who will release your monies to you after receiving certified ID. To apply, you will need to supply information such as the fund details, your employment details, personal information and tax file number.
Paper Application Method: This method is more complex and requires additional proof of identity and visa status.
For temporary residents: What happens to the insurance benefits attached to superannuation on permanently leave the country?
Provided there is enough money in your superannuation account to cover the premiums, the benefit will continue unchanged as long as the superannuation account remains open and active. If your visa is cancelled for longer than 6 months and your super monies moved to the ATO, the insurance will also be cancelled. You also have the option of cancelling or reducing the benefit amount at any time.
If I’m leaving Australia permanently, is there anything I can do to speed up the process?
Yes, there are a few things very important steps you can take to ensure there are no delays in your DASP application. These should be done before leaving Australia:
- Call the Fund Manager and update your postal address and email address. This will avoid lengthy delays in getting information across to you. During this call you can also arrange online access to your superannuation account, so you can track how it’s performing.
- Have your ID documents certified and post it to your Fund Manager. Write a cover note with your Account Number listed and request the company to keep it on file for future use when you apply for DASP. This certified ID lasts for 6 months only, so plan accordingly. This will save you a lot of time and effort to get documents certified overseas.
What are certified documents? Who must certify?
A certified document is a copy that is certified to be a true copy of the original. Recognized authorities have to view the original and stamp, date and sign the copy. Any Justice of the Peace (JP) can do it. Most banks, doctors and police stations have a JP on duty. If in India – a gazetted officer or Advocate Notary can do it.
How will my refund be paid and how long will it take?
Your super provider will send a cheque to the postal address in the DASP application. However, if you have an Australian bank account, you can request EFT into this account by requesting it in writing and posting it to the Fund Manager. The whole process can take between 1 to 6 months.
Why is there such a big difference between my account balance and what is paid to me as DASP?
The Government deducts tax before paying out the balance to you. This is generally 38% on all your employer SG contributions but as the tax rates differ and change regularly, please see the ATO website for more information.
Read more information about superannuation for temporary residents leaving Australia here.
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