Reclaiming Super

Muahahaha

Have a few thousand in a super account from years back and would like to reclaim. But am I right to say that the tax on super for people on a working holiday visa is 65% on every single dollar? :eek: Anyone know is it tax free or a lower rate if you wait until retirement age and then claim it then?

hussey

https://www.ato.gov.au/individuals/international-tax-for-individuals/coming-to-australia/returning-to-your-home-country/#Claimingyoursuper

It depends on the type of visa, if you are on WHV then yes it's 65% from 1st July 2017, unsure if this is backdated. If you had a sponsored visa it is 38%

https://www.ato.gov.au/Super/APRA-regulated-funds/In-detail/APRA-resources/Questions-and-answers/DASP-and-working-holiday-makers-changes---frequently-asked-questions/

If you use a 3rd party company they'll typically take 20% of your refund.

aido79

Also if it is only a few thousand as you say and depending on your age it will most likely be eaten up by fees long before you reach retirement age.

Peregrinus

aido79 wrote: »

Also if it is only a few thousand as you say and depending on your age it will most likely be eaten up by fees long before you reach retirement age.

No, it won't. If you don't claim your account balance from from your super fund as a Departing Australia Superannuation Payment within 6 months, they transfer it to the ATO. (In practice it may be a little more than 6 months before they get around to transferring it, but they will eventually transfer it.) Once it gets to the ATO, it no longer suffers any deduction for fees, etc, so it won't be eaten up. On the other hand, it doesn't earn much in the way of interest.

Sadly, no matter how long you wait before claiming your money from the ATO, when you do claim it they will treat it as a DASP no matter what age you have reached, so it will suffer the DASP tax rates.

The only reason to wait, therefore, would be in the hope that at some point in the future the DASP tax rate (which is outrageous) might be reduced.

aido79

Peregrinus wrote: »

No, it won't. If you don't claim your account balance from from your super fund as a Departing Australia Superannuation Payment within 6 months, they transfer it to the ATO. (In practice it may be a little more than 6 months before they get around to transferring it, but they will eventually transfer it.) Once it gets to the ATO, it no longer suffers any deduction for fees, etc, so it won't be eaten up. On the other hand, it doesn't earn much in the way of interest.

Sadly, no matter how long you wait before claiming your money from the ATO, when you do claim it they will treat it as a DASP no matter what age you have reached, so it will suffer the DASP tax rates.

The only reason to wait, therefore, would be in the hope that at some point in the future the DASP tax rate (which is outrageous) might be reduced.

Thanks for the correction. I'm guessing this wouldn't be the same for a citizen departing Australia...

Peregrinus

aido79 wrote: »

Thanks for the correction. I'm guessing this wouldn't be the same for a citizen departing Australia...

Citizens (and permanent residents) departing Australia can't get a DASP at all, so the question of what tax it would attract doesn't arise. You can only get a DASP if you were present and working in Australia on the basis of certain classes of temporary residence visa.

Muahahaha

Thanks for the info Peregrinus. You are correct about the super going to the ATO- that is who I get the annual letter from.
Do you know if I wait to retirement age would the tax on withdrawing it be any less than 65% ? I know things can change but as things stand now is the tax on it any lower if the person is retired?

Peregrinus

Muahahaha wrote: »

Thanks for the info Peregrinus. You are correct about the super going to the ATO- that is who I get the annual letter from.
Do you know if I wait to retirement age would the tax on withdrawing it be any less than 65% ? I know things can change but as things stand now is the tax on it any lower if the person is retired?

I can't find a source to absolutely confirm this, but so far as I know once it's transferred to the ATO as a Departing Australia Superannuation Payment waiting to be claimed then, whenever you claim it, it will always be taxed as a DASP, regardless of your age or other circumstances. The only exception might be if you become a permantent resident of Australia at some point in the future; you might then be able to have your DASP trasnferred back to your regular superannuation and, in due course, take it as a retirement benefit. But I assume you don't anticipate migrating to Australia.

The other hope you might cherish is that, if you wait long enough, the 65% tax rate (which is outrageous) might get reduced in some future review and reorganisation of superannuation taxation. But, obviously, that might never happen.