So what is a superannuation fund? Some things are rightly described as ‘Super’. For instance, no-one can argue against Superman deserving such a title. However, the term is also abused for mediocre objects simply for good effect. Find anyone that actually enjoys a trip to a ‘supermarket’ and they are either lying through their teeth or they barely ever leave the house. Blueberries are a “superfood”? Seriously? While Superannuation will not save the world like the Man of Steel you are much better with it than without it when working in Australia.
Ok. Declaring itself as super is a tad outlandish as superannuation is basically a pension arrangement. Yup. That’s not even barely stirring is it, let alone super. However, in Australia this is government-supported which also means that minimum provisions are enforced for employees, which is kinda nice.
What is a Australian superannuation fund??
Employers were required by law to contribute a minimum of 9.5% of an employee’s ordinary time earning into a superannuation fund, which is called a ‘Superannuation Guarantee‘. The detail that is really super is that this is an additional payment borne by your employer; it is not deducted from your gross pay. There are also plans to increase the proportion to 12% by 2019, which is nice.
The payment is based on your pre-tax earnings so if you earned $500 before tax for the month you should be entitled to an additional $46.25. However, do not be alarmed if your superannuation balance looks a little skinny as 15% is taxed by the Australian Tax Office (ATO) and super fund accounts constantly charge administration and insurance fees which can amount to $5-10 per week.
Are you eligible for superannuation?
To be eligible the employee must be over 18, working over 30 hours a week and earning over $450 per month from one employer, so it would be beneficial to hold a single job instead of several. As far as assurances go the Australian Government have that covered too as from 1st January 2014 employers were obligated to pay default contributions to an authorised MySuper product, with the most well known being AustralianSuper and AustSafe Super. This means that losing your payment due to a suspect provider is now far less a risk.
How does Superannuation effect temporary residents and working holiday makers?
That all sounds grand and all for Australian citizens yet for short-term visitors such as those on Working Holiday Visas the reality is a little different. Of course, if you meet the criteria then you can expect the contribution. Remember, as long as you earn over $450 a month from one employer you will be entitled. The arrangement is for any worker; whether permanent or casual, resident or non-resident for tax purposes (that would be you by the way).
What is a Australian superannuation fund? How do you arrange
Arranging your superannuation is relatively straightforward. You can set up your own super account, which is the simpler choice if you intend of taking on temporary work or travelling while in Australia. You could also ask the bank to set up your superannuation when you open an account with them or you can join the super account set up by the employer. If you do opt for your employers company’s superannuation account and lose the paperwork do not fret, simply contact backpay.com and they can help locate your super. For anyone being paid in cash it may seem great to have your wages in your hands to hold and then spend but you will be missing out on superannuation. You read that correctly. For all those lovely, crisp banknotes in your pocket you will be losing out on FREE MONEY.
Claiming back your superannuation
Working holiday makers are allowed to claim back superannuation either when their visa expires or whenever they leave permanently. This is known as the Departing Australia Superannuation Payment or DASP. A point to note is that you must have left Australia before this can be paid; the application includes checking that any temporary visa has been cancelled by the Department of Immigration. Indeed, The Australian government must get really irked with these departures as they then take out a further 35% when you apply for the withdrawal. Bit harsh. Another point to note is that you are much better off claim your super refund it sooner rather than later. In fact, if you do not claim your super within six months of leaving Australia, or within six months of the cancellation or expiry of your visa, the ATO will claim the money and it could be a while to organise its release from their tight grasp, especially from abroad.
Still, the money is yours but if you are having trouble working out how to claim it then do not worry. If you have already claimed your taxback then the same company, and even the very same tax professional, should be able to assist you in claiming your superannuation. All you need to do is provide your membership details, fill in some forms and the tax professionals will do the hard work while you wait for the payment to arrive. Most charge a flat fee of around 15% for the service and you should receive your super within 28 days of the Australian Tax Office receiving your application.
Superannuation may not exactly be super but it is free money that you should be entitled to when working in Australia. Setting up your account is relatively simple and claiming it back once your visa has expired is not that hard either. Just do not forget about it, it is free money after all.
By Omar Soliman