We will explain how the rules of superannuation vary depending on your age, based on the requirements set out by the Australian Tax Office (ATO). Age generally comes into play during three stages:
- When you first earn super
- When you want to make extra-contributions
- When you want to access your super
For any employees, the normal 9.5% rule applies if:
- You’re over the age of 18 and earn more than $450 (before tax) in a single calendar month
- You’re under 18 and work for more than 30 hours a week, while still earning $450+
If you’re over 18 and earn less than this threshold or are under 18 and work less than 30 hours in a week, then you aren’t entitled to any superannuation and your employer does not have to make any contributions. Once you’re above this age and are a regular contributor to the work force, then you can earn super until the day you retire.
Before and after-tax contributions
Before-tax superannuation contributions such as salary sacrifices are currently limited to $25,000 annually, although there is no age limit on these as of July 2017. From July 2018, workers with less than $500,000 in super can make additional before-tax contributions with the unused portions of their before-tax caps.
Superannuation contributions made after-tax are currently limited to $100,000 a year, or $0 if you have a balance of $1.6 million or higher. Once you reach the age of 65, you can only continue to make voluntary contributions if you work for for at least 40 hours over a 30-day period.
Voluntary contributions cannot be made once you hit 75.
Accessing your super
Accessing your super is limited to people above a certain age, which is known as the preservation age. The preservation age is a restriction preventing people from accessing their superannuation until their retirement unless they meet a condition of release.
The preservation age varies depending on when you were born:
|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|
|From 1 July 1964||60|
You do not immediately have access to your super once you reach the preservation age; you to need to have retired as well. Once you reach age 65 however, you can access your superannuation even if you haven’t retired.
Can you access your super early?
Yes; there are some limited circumstances that allow you to access your super before you reach the required age:
- A terminal medical condition: an illness or injury that is likely to result in death within two years will allow you to withdraw your super early if you are approved by two registered medical practitioners
- Severe financial hardship: if you are unable to pay your living expenses despite being on Commonwealth benefits for 26 weeks, you can withdraw parts of your super
- Incapacity: suffering a permanent disability can also be grounds to withdraw from your super fund
You may also be able to access your super if you are permanently leaving Australia, as a large number of other countries do not have mandatory super schemes.
Some super funds make adding excess contributions easier, while others have shown that they can generate higher returns over the years. To find a fund with the right balance of both, compare your super options with Canstar: