Benefits of Superannuation

Generally superannuation benefits are divided into 3 parts:

Preserved benefits are benefits that must be retained in a superannuation fund until the employee’s ‘preservation age’. Currently, all workers must wait until they are 55 before they may access these funds. All contributions made after July 1, 1999 fall into this category.

Restricted non-preserved benefits cannot be accessed until an employee meets a condition of release, such as terminating their employment in an employer superannuation scheme.

Unrestricted non-preserved benefits are benefits that can be accessed upon the request of the worker.

Reasonable Benefit Limits

From 1st July 2007 the Reasonable Benefit Limits have been discarded. The new policy has been simplified according to the new budget (2009 to 2010) on age pension of Australia.

Reasonable benefit limits (RBL) are the highest amount of retirement and termination of employment benefits that a person can receive in their lifetime at reasonable tax rates. Once the person starts receiving the benefit, the payer must report the contribution to the Australian Taxation Office (ATO). The RBL is than decided by the ATO whether the person has exceeded or not and notifies them if they have. There are huge numbers of factors that can affect a person’s RBL, complicating the calculation involved.

Preservation age

Eligibility for access to preserved benefits depends on a worker’s preservation age. The Howard government announced changes in 1997 to the Australian superannuation system designed to encourage Australians to stay in the workforce for a longer period of time, delaying the effect of population ageing. After the legislation was passed in 1999, an employee’s preservation age depends on their date of birth.

Hence, by 2025, all Australian workers wishing to access their superannuation would be at least 60 years old.