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Glossary of Retirement Terms

A Glossary of Retirement and Superannuation Terms

Account Based Pensions
(aka "Allocated Pensions" or "Super Income Streams")

An account based pension is a regular income stream, purchased with money you have accumulated in your super, after you have reached preservation age. Minimum amounts are required to be drawn on an annual basis based on a percentage of your superannuation balance, although the amounts can be drawn annually, quarterly or monthly depending on your super fund. The minimum amount increases with age as illustrated in the table below.

How much must you withdraw each year?

Taxable income
Minimum Annual payment
as a % of account balance*
55-64
4%
65-74
5%
75-79
6%
80-84
7%
85-89
9%
90-94
11%
95+
14%

Note that no maximum payment applies (unless you have a Transition to Retirement Pension, in which case the annual maximum is 10%) and you are not precluded from taking out a lump sum or rolling back your pension into an accumulation account.

* Because of the significant losses in financial markets resulting from the COVID-19 pandemic the Government has reduced the minimum annual payment required for account-based pensions and annuities, allocated pensions and annuities and market-linked pensions and annuities by 50% in the 2019–20 and the 2020–21 financial years. See the ATO page for more details. It is important to appreciate that these are not mandatory levels, retirees can continue to receive whatever payment levels they require, they are just subject to meeting the new minima.

Accumulation Fund
(aka Defined Contribution Fund)

Most Australians have their super invested in what is called an "accumulation fund". They are referred to as accumulation funds because your money balance grows or ‘accumulates’ over time. The value of your super within these types of funds depends simply on:

  • your employer's level of contributions
  • your level of contributions
  • whether you have received any bonus contributions
  • the investment performance of your fund over time, and
  • the amount of fees you pay in relation to the account – including insurance premiums

It's important to appreciate that with an accumulation fund you bear the investment risk within your super fund.

"Accumulation" and "Pension" Phases of Superannuation

A super fund is in it's Accumulation Phase when you are building up or amassing assets within your fund prior to retirement and drawing down those funds. Conversely, the fund is said to be in Pension Phase when you begin to draw an income stream or pension from the fund. Note that it is possible, for example within a self managed superannuation fund, for an individual to have both a fund which is in accumulation phase, into which they are making contributions, and a separate fund which is in Pension Phase paying an income.

It is important to appreciate that the tax treatment of earnings within superannuation funds in these two phases differs substantially. When a super fund enters pension phase the earnings on the assets supporting the pension are exempt from tax, subject to meeting certain minimum pension payment requirements. This contrasts with superannuation funds in the accumulation phase, where the fund earnings are subject to a 15% earnings tax, although the capital gains tax rate applying to assets held within the fund for more than 12 months is actually 10%.

Aged Care Assessment Team (ACAT)

Prior to moving into an aged care home, or indeed arranging help at home, you may first need an assessment by the Government's Aged Care Assessment Team (ACAT). A member of an ACAT will discuss with your current situation and work out if you are eligible to receive government-subsidised aged care services.

Specifically, you will need an ACAT assessment if you want to:
  • move into an aged care residential accommodation (nursing home).
  • access any Government support services delivered "in your home"
  • receive transitional care after being in hospital
  • access respite or "short term" care in an aged care (nursing) home

Annuity

An annuity is a product which pays you a guaranteed income for a contracted period of time. They come in an enormous variety of types, including products that provide payments for a lifetime, a certain number of years, inflation adjusted or otherwise, and those that do, or do not, provide a payment to your estate or spouse on your death should you die before the end of your contracted period of payment.

Annuities provide you with some certainty that, regardless of circumstances in the market or economy, you will receive an assured income no matter what happens. You usually purchase an annuity with a lump sum - typically from a life insurance company or bank - and the payments are very sensitive to interest rates. It is very important that you obtain specific financial advice in advance of committing to any annuity, as this is a decision that may affect your retirement income for 10, 20 or 30 years.

We have dedicated a separate page to an overview of annuities in more detail, as we expect them to play an increasing role within retirement income.

Assets under Management (AUM)
(aka Funds under Management)

Assets under management (AUM), sometimes called funds under management (FUM), is a measure of the total market value of all the financial assets which a financial institution such as a superannuation fund or bank manages on behalf of its members and clients.

Beneficiary

A beneficiary is a person designated as the recipient of funds or other property under, for example, a will, trust, insurance policy or superannuation fund. If you are considering who should receive your superannuation funds on death, you should note that death benefits are tax free when paid to individual considered to be your "dependents" under tax laws, but taxes will apply if funds are allocated to "non-dependents". If your superannuation fund is substantial, you should seek tax advice in advance of determining who should be the beneficiaries.

Binding Death Nomination

Under superannuation law, the Trustee of your super fund has the discretion and obligation to decide who should receive your superannuation on your death. You can overrule this discretion by completing a binding death nominations, but note these are only valid for three years. Your super fund will advise you when your nomination is about to expire and you can revoke or change your nomination at any time by sending your super fund a new binding nomination, which needs to be witnessed by two independent individuals. Note : if your nomination expires and is not renewed, your benefits are paid to your estate and therefore your super is not payable at the discretion of the Trustee, even if the binding nomination is no longer effective.

Commonwealth Seniors Health Card (CSHS)

A Federal Government scheme which provides older Australians with access to cheaper prescription medicines, Australian government funded medical services, and other government concessions. Eligibility for a CSHS is generally dependent upon your having reached Age Pension age but not having qualified for any Social Security pension and having met income and residency requirements.

Commutation

Commutation is where a member of a Superannuation or pension scheme gives up part or all their pension in exchange for a lump sum payment. You are in effect converting an income stream into its lump sum equivalent. This is a particularly important notion when it comes to transferring a defined benefit pension to an accumulation superannuation fund - the promised pension, which will typically commence at some time in the future, needs to be converted into an equivalent lump sum - a process which often involves actuarial calculations.

Complying Superannuation Fund

Funds which comply with the requirements of the Superannuation Industry (Supervision) Act 1993 (SISA) qualify for concessional tax rates. Those that are not complying do not receive concessional tax rates and earnings within the fund may be taxed at the rate of 45%. Many compliance requirements are technical, but one requirement that may be problematic for members of a self managed superannuation fund (SMSF) who spend significant time overseas, is that the fund must remain resident in Australia. Since the members of a SMSF are often the trustees, and the location of the trustees determines the residence of the trust, this can lead SMSF's to become a non-complying superannuation fund.

Concessional Contributions (CC's)
(aka Before-Tax Contributions)

Concessional contributions are before tax contributions including:

  • employer contributions under the Superannuation Guarantee, and contributions made under a salary sacrifice arrangement), and
  • personal contributions claimed as a tax deduction by a self-employed person.

Significant restrictions in terms of who can claim a deduction because they are self-employed, and caps exist in terms of how much you can contribute as CC's towards superannuation on an annual basis. There is some complexity surrounding these caps, with different levels currently applying to individuals over the course of time, often depending on their age.

Concessional Contribution Caps - Since 2012/13
Tax Year Under 50 50-59 years (1) 60 years + (2)
2017+ $25,000 $25,000 $25,000
2016-2017 $30,000 $35,000 $35,000
2015-2016 $30,000 $35,000 $35,000
2014-2015 $30,000 $35,000 $35,000
2013-2014 $25,000 $25,000 $35,000
2012-2013 $25,000 $25,000 $25,000
1) If you were 49 years of age or older as at 30 June 2015, then your concessional contributions cap for the 2015/2016 tax year was $35,000. If you were 49 years of age or older as at 30 June 2014, then concessional cap for the 204/2015 tax year was $35,000. 2)If you were 59 years of age or older as at 30 June 2013 then you were eligible for the higher concessional cap of $35,000 for the 2013/2014 tax year.

You need to be careful to ensure that whatever the source of your contributions, whether employer or personal, that you do not exceed your contribution cap. Excess concessional contributions will be taxed at your current marginal tax rate, plus an interest charge. If you are already paying the top marginal tax rate, then your super contributions will be subject to an interest charge only. Note also that any personal contributions made by an individual aged 65-74 will be subject to passing a "work test".

Condition of Release

You can withdraw some or all of your super if you satisfy one of the legislated "conditions of release". Common conditions of release include reaching your preservation age and retiring and reaching age 65. There are also a number of other conditions which we specifically address elsewhere, and you should be aware that the tax treatment of any funds withdrawn may vary depending on a number of other criteria, including your age and type of superannuation fund.

Contribution Splitting

You can split your super contributions with your spouse, but they must be either less than 55 years old, or 55 to 64 years old and not retired. If your spouse is 65 or older, you can’t split your super contributions. You can generally split up to 85% of concessional contributions, including: Superannuation Guarantee contributions, salary sacrifice contributions and personal contributions that you claim a tax deduction for – usually made by self-employed people. Note that not all superannuation funds offer contribution splitting and it will need to be specifically provided for in any SMSF trust deed. Professional advice is recommended in advance.

Corporate Trustee

A corporate trustee is where a company is formed to act as trustee for a superannuation fund. For example, instead of having the members of a SMSF acting as individual trustees they may opt to establish a company to take on the role and responsibility. Most information suggests that the majority of SMSFs still have individual trustees, but the option should be discussed in detail with your adviser as there are situations where a corporate trustee is advantageous.

Daily Accommodation Payment (DAP)

One part of the cost of residential aged care is the accommodation payment, which comprises either a Refundable Accommodation Deposit (RAD) or Daily Accommodation Payment (DAP). In effect you can pay for your accommodation by either a lump sum (RAD) or or by paying a daily fee (DAP) - or a combination of both (RAD + DAP) - the aged care provider cannot specify how you pay for your accommodation.

You can work out the DAP once you know the RAD and what is called the Maximum Permissible Interest Rate (MPIR). The MPIR is supposed to be the interest rate the care provider would have to pay on any money borrowed to cover the cost of providing accommodation. As at January 2020 the MPIR is 4.91% and if you multiply the RAD x MPIR you obtain the annual DAP fee. The MPIR will change over time but for a resident it is fixed at the time of entry.

Deeming Rates

Deeming rates are a tool used by the Government to generally determine eligibility for social security benefits and support under income tests. Deeming assumes that financial investments earn a percentage return, regardless of the actual income being earned. If pensioners earn more than these rates then the additional is not assessed. Find current deeming rates here.

Defined Benefit Fund
(aka Final Salary Scheme)

Defined benefit funds are typically corporate or public sector funds, where the value of your retirement benefit is dependent on a combination of how much your employer contributed to the fund, your additional contributions, the length of your working life with the employer and your salary on retirement.

In a defined benefit fund the company or Government employer generally takes on the investment risk - and hence why they are becoming rarer and rarer, with many funds now closed to new members, who are typically only offered new style accumulation superannuation. You should always obtain professional advice before leaving a DBF, as some have very generous provisions.

Dependents

For superannuation and tax purposes you are a dependent of a deceased if, at the time of their death, you were one of the following:

  • a surviving spouse or de facto spouse
  • a former spouse or de facto spouse
  • a child of the deceased who is under 18 years old
  • any other person who was financially dependent on the deceased
  • any person who had an interdependency relationship with the deceased.

If you are a dependent of the deceased, you do not need to pay tax on any superannuation death benefit if you receive it as a lump sum. If you receive an income stream the tax payable depends on your age and the composition of the fund.

If you are not a dependent then you will be subject to tax on any death benefits - the precise level depends on the make up the death benefit. The tax-free component is always tax-free, but the taxable component will be subject to 15% tax plus (2%) Medicare levy when paid to a non-dependent.

Franked Dividends

A franked dividend is a dividend on which a company has already paid Australian corporate tax - currently at the rate of 30%. The shareholders of the company are entitled to a credit for the amount of tax a company has paid - and this is known as a franking (or "imputation") credit. Note that dividends can be fully franked, meaning that the entire dividend carries a franking credit, or partially franked, with only a portion of the dividend attracting a franking credit.

In effect, if your tax rate is lower than the company tax rate - which is typically the case with superannuation funds - then you will receive a refund of the difference from the ATO. Note that the Labor party has indicated that an intention to remove access to "encashable" franking credits.

Funeral Insurance

As the name suggests, funeral insurance is designed to cover the cost of your funeral, and it can be purchased in a number of different ways. As you would expect, the premiums associated with this sort of insurance increase as you get older, until you reach an age where insurance is basically un-economic. Other options include pre-paid funerals, funeral bonds, life insurance or simply using a separate savings account to cover the costs.

In Specie Contributions

"In specie" is a latin term that effectively means “in kind”. When contributions are made to a superannuation fund "in specie" it means a contribution made with assets that aren’t cash. Only certain assets can legally be transferred in specie by a super fund member, and currently the only assets allowed to be transferred to a SMSF from a member (or an associate of an SMSF member) are:

  • ASX Listed Securities
  • Widely Held Managed Funds
  • Business or Commercial Property
  • Cash Based investments such as Bonds and Debentures.

Independent Living

This term refers to individuals living in a retirement home but maintaining an independent lifestyle, and not requiring residential aged care, although arrangements may be made separately for units or apartments to be serviced on a regular basis. Residential aged care or nursing homes are sometimes co-located with independent living units, but access to the former is always subject to government regulated assessment by Aged Care Assessment Teams (ACAT).

Life Expectancy or Mortality Tables

The subject is a bit grim, but life tables effectively show how many years you’re expected to live, on average, at a particular age. Australian tables are released every five years by the Australian Government actuary.

They are, of course, an average and the "risk" that you will outlive your average life expectancy is called "longevity risk".

Loan Guarantor

If a lender is not willing to give a loan to a person on their own, they may ask for a guarantee from a family member or friend. If you sign such a guarantee you are known as the 'guarantor' of the loan. A guarantor assumes a significant responsibility and potential financial risk as they are legally responsible for paying back the entire loan if the other person cannot or will not make the repayments - including any accumulated fees or costs. These are not unusual within family but should always be preceded by independent legal advice - they can have significant financial and relationship implications if things "go wrong".

Low Income Tax Offset (LITO)

LITO is an “offset” available to all tax payers on lower incomes - because it is an "offset" it is deducted directly from tax that would otherwise be payable. We discuss LITO and the other offset directly relevant to seniors, the Seniors and Pensioners Tax Offset (SAPTO), in some detail elsewhere on the website in the section dealing with how seniors working in retirement are taxed.

Lump Sum Cap Amounts - UPCA and LRCA

There are two lump sum cap amounts that can apply in relation to a lumps sum payment from superannuation.

Untaxed Plan Cap Amount (UPCA)

The untaxed plan cap amount is the maximum amount of the untaxed elements subject to concessional tax rates. Any lump sum amounts above the UPCA are taxed at the top marginal rate. The untaxed plan cap applies separately to each super fund from which you receive a super lump sum payment.

Low Rate Cap Amount (LRCA)

The LRCA applies if you reach your preservation age but are under 60 years of age and is a limit on the amount of taxable components (taxed and untaxed element) that can be taxed at a concessional (lower) rate of tax. It's a lifetime cap which is reduced by any taxable component you receive from any payer after you reach your preservation age, but it cannot be reduced below zero. Any payment in excess of the LRCA is subject to tax at varying rates of tax.

Both UPCA and LRCA are subject to periodic change - in 2018/2019 they are respectively: $1,480,000 and $205,000

Maximum Permissible Interest Rate (MPIR)

Aged Care Providers need to publicly advertise the refundable accommodation deposit (RAD) applying to any of their accommodation, as well as the equivalent daily accommodation payment (DAP), as well as show an example of a combination (RAD + DAP) payment.

To calculate the equivalent DAP, the refundable deposit is multiplied by the current maximum permissible interest rate (MPIR) and divided by 365 days. The MPIR is calculated quarterly and all aged care providers are notified of the MPIR prior to the commencement of each quarter. The MPIR is published on the AgedCare website and we have a specific page providing some commentary and history with respect to the MPIR .

Non-Commutable Income Streams

These are income streams that cannot be converted (capitalised) into a lump sum - an example is an income stream available through a Transition to Retirement Pension (TRIP).

Non-Concessional Contributions (NCC)
(aka After-Tax Contributions)

Non-concessional contributions are any after tax contributions including Government co-contributions and foreign pension transfers (except that part of the pension value which reflects growth since returning to Australia). NCC's do not attract a contributions tax of 15% and the cap is driven by direct reference to the annual Concessional Contribution Cap - it is now 4 times the Concessional Contribution Cap (4 x $25,000). The NCC caps have changed significantly in recent years, see the table below. If you are under age 65, you can bring forward up to two years’ worth of NC contributions, which means that prior to the 2017/18 tax year year you could make up to $540,000 in super contributions in one year, representing your non-concessional caps over a three-year period; the current limit is now $300,000.

NCC Cap - Tax Year 2016/17
Annual $180,000
Bring Forward Basis (3 Years) $540,000
NCC Cap - Tax Year 2017/18 +
Annual $100,000
Bring Forward Basis (3 Years) $300,000

Once aged 65 you can make NC contributions up to the annual contribution cap, subject to meeting a "work test". If you exceeded the non-concessional cap at any time on or after 1 July 2013, you have the option of withdrawing your excess contributions from your super fund, rather than paying a penalty tax of 49% on those excess contributions.

Non-Recourse Loans
(aka Limited Recourse Loan)

In very general terms, and you need to look at the precise wording and any loan documentation to be precise, a non-recourse or limited recourse loan is one in which the lender can only make a claim against the specific asset used as security for the loan- and not against other assets that the borrower may own.

The only borrowing permitted by an SMSF (or superannuation fund generally) is through non-recourse or limited recourse loans, so that the other assets within the super fund are protected in the event of a default.

Pension Loan Scheme (PLS)

The Pension Loan Scheme (PLS) is a Government administered scheme which enables individuals and couples to borrow against real estate equity - receiving a fortnightly income stream. The loan accrues interest at a published rate (4.5% currently) on a compound basis which is repaid on sale of the property or the death of the borrower - although early repayment can be made at any stage. Lump sum payments are not available, only an income streams.

Effective July 1, 2019 a new PLS will come into operation - with the maximum payment increased to 150% of the pension, allowing a much wider group of individuals to access the scheme, including those who do not qualify for any pension.

Power of Attorney (POA)

A power of attorney is a formal legal document which gives another person the authority to make personal and/or financial decisions on your behalf. Personal decisions may include your care and welfare, including your health care, whilst financial decisions may relate to the broad management of your finances (paying your bills and taxes, selling or renting your home, investing your money).

There are 2 broad types of POA:

1. A General Power of Attorney

A General POA is used to appoint someone to make financial decisions on your behalf for a specific period or event, such as if you are resident overseas and need to sell or rent your house or pay expenses. It is used while you still have the capacity to make your own decisions and ends when that is no longer the case (i.e. you lose capacity) or if you revoke the POA while still having the capacity.

2. An Enduring Power of Attorney

You use an Enduring POA to appoint someone to make financial and/or personal decisions on your behalf. For financial decisions, you can nominate whether you want the attorney to begin making financial decisions for you straight away or at some other date or occasion, such as once you’ve lost capacity to make these decisions. Your attorney’s power to make personal decisions only commences when you lose capacity to make these decisions.

Preservation Age

You can generally only access your superannuation after you reach a certain minimum age ("preservation age") and meet certain requirements ("conditions of release)". Current preservation ages are:

Date of Birth
Preservation Age
Before 1 July 1960
55
1 July 1960 - 30 June 1961
56
1 July 1961 - 30 June 1962
57
1 July 1962 - 30 June 1963
58
1 July 1963 - 30 June 1964
59
1 July 1964 and after
60

Refundable Accommodation Deposit (RAD)

One part of the cost of residential aged care is the accommodation payment, which comprises either a Refundable Accommodation Deposit (RAD) or Daily Accommodation Payment (DAP). In effect you can pay for your accommodation by either a lump sum (RAD) or by paying a daily fee (DAP) - or a combination of both (RAD + DAP) - the aged care provider cannot specify how you pay for your accommodation.

The RAD is set by the aged care provider and must (currently) not exceed $550,000 without the prior approval of the Aged Care Pricing Commissioner (ACPC), and must be advertised on the Government’s MyAgedCare website. The care provider cannot charge a resident more than the advertised RAD or DAP, or combination of both, and note that the advertised RAD is the maximum chargeable; negotiation may reduce this figure..

Restricted Non-Preserved Benefits

This is quite a rare form of superannuation benefit, and you will only have this benefit if you were a member of a superannuation fund prior to July 1, 1999. This is a benefit that is typically preserved, and inaccessible, until a person leaves their particular employment. So, if you have been in long-term employment, it may form part of your total superannuation benefits and be available immediately upon leaving employment, even if you have not reached preservation age or met a condition of release.

Reverse Mortgage

A reverse mortgage involves borrowing money against the equity you already have in your home, and the loan can be taken as a lump sum, income stream or a combination of both. The difference between this type of mortgage and a "normal mortgage" is that you never make repayments, the interest charges are added - on a compound basis - to the balance of the loan and paid off when the property is sold or if you move into aged care.

While no income is required to qualify for these loans, credit providers are required by law to lend you money responsibly so not everyone will qualify for this type of loan and the amounts available are restricted. Certainly, independent advice should be sought before committing to these arrangements to ensure they fit your circumstances.

Reversionary beneficiary

A reversionary superannuation pension or annuity is an income stream which automatically becomes payable to another person, referred to as the 'reversionary beneficiary" on the death of the pension or annuity recipient - often the surviving spouse or partner. In terms of an annuity, a reversionary beneficiary can only be added at commencement of the policy and cannot be changed; there are also certain restrictions applicable with respect to who can be a reversionary beneficiary if the policy was financed with superannuation money. On the death of the original annuitant, the annuity payments can continue to the reversionary beneficiary until the end of the annuity’s term or the reversionary beneficiary may choose to receive the death benefit as a lump sum.

Rollovers

In a superannuation context, a rollover is simply when a member transfers some or all of their existing super to another super fund. There are typically no taxation implications, unless there is an untaxed element in your superannuation fund, and the receiving superannuation fund will often help you with the administration.

Salary Sacrifice

Salary sacrificing involves you asking your employer to redirect a portion of your salary into super contributions. By sacrificing some of your pre-tax salary and putting it into super, with the contribution taxed at 15%, you can improve your tax position and increase your superannuation balance. Note that contributions made through salary sacrificing count towards your annual concessional contributions cap, and that your employer needs to support this arrangement.

Self Managed Superannuation Fund (SMSF)

SMSFs are a legal (trust) structure set up with the sole purpose of providing for your retirement. SMSFs can have one to four members, with plans to increase this number to six members, each of whom is a trustee of the SMSF, unless there is a corporate trustee. Note that no member of the fund can be an employee of another member of the fund unless they are relatives, with a "relative" including both immediate and extended family members.

Seniors and Pensioners Tax Offset (SAPTO)

SAPTO is a tax provision which provides qualifying individuals with a tax offset, and it means that you can earn more income before paying any tax. The qualifying conditions are (unnecessarily) complex and the ATO has provided a calculator. The benefits can be reasonably substantial so you are advised not to be deterred by the complexity but discuss SAPTO with a tax agent if you believe you might qualify. We discuss SAPTO in quite some detail elsewhere on the website in the section dealing with how seniors working in retirement are taxed.

Small APRA Fund (SAF)

A SAF is a self-managed super fund that shares many of the features of SMSF's, such as being restricted to a maximum of four members. But there are two significant differences. Firstly, the trustee role is undertaken by a professional trustee rather than members of the fund, and secondly - as the name implies - these funds are regulated by APRA rather than the ATO.

"Sole Purpose Test" (SPT)

The SPT provides that a regulated superannuation fund must be maintained solely for the provision of benefits on or after the member’s retirement, or to their dependents if they should die before retirement. A contravention of the SPT, through an inappropriate use of super funds or assets, could see the super fund lose its concessional tax treatment and trustees facing civil and criminal penalties.

Superannuation Guarantee

The Superannuation Guarantee (SG), introduced in 1992, requires most Australian employers to pay a (current) minimum of 9.5% of the employees' ordinary time earnings into a super fund chosen by their employee - up to what is called the Maximum Superannuation Contribution Base (MSCB). The SG rate is scheduled to increase over time and reach 12% on July 1, 2025.

Testamentary Trust

A testamentary trust is a trust that is established under a will, but does not come into effect until after the death of the person making the will. The trust describes a structure within which assets are managed and distributed by a Trustee(s) for the benefit of others (beneficiary or beneficiaries). The structures are commonly used in estate planning, to provide flexibility, reduce tax and protect assets - and need to be the subject of specific legal advice.

Transition to Retirement Pension or Income Stream (TRIP or TRIS)

A transition-to-retirement pension (TRIP) enables Australians who have reached their preservation age (at least the age 55 and increasing to age 56 and older, depending on your date of birth) to access their super fund in the form of a pension (minimum 4% of their super balance, maximum 10% per annum) without retiring or meeting any other condition of release.

Trauma Insurance
aka Critical Illness Insurance

Trauma insurance pays you a once-off lump sum payment in the event that you have a serious medical condition, including cancer, a heart attack or major accident.

Trustee

Very broadly, a Trustee is any person - and this includes companies - who holds property, authority, or a position of trust or responsibility for the benefit of another.

Unrestricted Non-Preserved Benefits

You can withdraw unrestricted non-preserved benefits from your superannuation fund at any stage. Once you have reached your preservation age and met a condition of release, all of your superannuation funds become unrestricted non-preserved benefits.

Individuals with long-standing superannuation funds may have benefits within their fund labelled as unrestricted non-preserved benefits even prior to reaching their preservation age, but these situations are becoming quite rare.

The "Work Test"

If people aged between 65 to 74 years want to make personal contributions to super they must meet a "work test" - this involves them working for at least 40 hours over 30 consecutive days in the financial year in which they wish to make a contribution. In this regard, note that:

  • The 30 consecutive days required doesn't have to be worked in one particular month, and there is no maximum number of hours you may work - the test is a minimum requirement.
  • Your work must involve remuneration for your efforts - you must be "gainfully employed" for the purposes of the legislation. The type of activity seems irrelevant as long as it is legal - and consequently voluntary activities do not qualify. Contact the ATO to discuss if you have any doubts regarding whether you would qualify.
  • Note that the "work test" doesn't apply to SG (Superannuation Guarantee) contributions - if you are working and meet elegibility criteria, then your employer must pay SG contributions.