If you are working in Australia, you must set up a super fund which is a fund for your superannuation. Am I talking gibberish? Here I have gathered the most common questions foreigners ask in regards to the superannuation and the super refund. Let's go!

 

What is superannuation?

 

Superannuation is the private retirement system in Australia. According to Wikipedia "Superannuation in Australia are the arrangements put in place by the Government of Australia to enable people in Australia to accumulate funds to provide them with income in retirement. Superannuation in Australia is partly compulsory, and is further encouraged by the government and supported with tax benefits." If you work you get that extra money for your retirement, compared to someone who never worked, or didn't work enough, will only have the Centrelink age pension. These funds are private businesses therefore they are NOT government owned.

 

How do I set up a superannuation fund?

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You can:

- use your first employer in Australia preferred super or

- use each employer's preferred super fund or,

- choose your own super fund.

I did not find much difference between the

superannuation funds when I looked around, especially

if you are in Australia for only a couple of years. You  

can choose a super fund which only does super or

you can go through your Australian bank once you have set up your bank account as well as your Tax File Number. 

IT IS BEST TO ONLY USE ONE SUPER FUND to accumulate the superannuation as it will facilitate the refund procedure once you leave the country.

 

How does it work?

 

The employer pays 9.5% (in 2017-2018) of your pay to the super fund, every 3 months. This is not deducted from your pay but added up onto it, so if you earn $23 an hour, your employer will pay you $23 + 9.5% to the fund. Basically the employer pays for it, not you, but it is part of your employee rights.

 

 

Is superannuation the same as a savings account?

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Your super fund will make your money work as it is invested in a variety of assets, mainly in shares, property and infrastructure. Therefore the amount can rise or fall, however on a small amount you will not see much of a difference. For example, during the 2008 crash, my superannuation only had $4,000 on it, and I lost $500 in a year. However, from 2009 it increased to $8,000 as the market was more stable.

 

How do I know whether my employers has paid my super fund?

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When you set up your super fund, you will be given (or will need to set up) internet access codes in order to access your superannuation details, be able to amend any information and, the most important, check whether your employer has made the payments. By law, businesses must make payments to the super funds every 3 months if the employee has earned more than $450 in a month. The due dates are: 28th October, 28th January, 28th April, 28th July. So if you have worked only one month somewhere it might take a couple of months before your employer make the payment.

 

What do I need to do if my employer hasn't paid my superannuation?

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In that case, it isn't legal. You need to contact your super fund (the one your employer should have paid), explain your situation, then the super fund will send the employer a notification. If the employer still doesn't pay they get fined, so they generally pay straight away.

 

I heard there is a life insurance included, is it true?

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Super funds can include a life insurance but it will depend on how it has been set up. If so, you will need to determine the amount covered as well as the beneficiary in the event of death (I know, this is not very interesting). There is usually a separate form to complete for life insurance.

 

 

 

 

 

 

 

 

 

 

 

 

 

I'm leaving, do I get my superannuation back?

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Yes, you do. When you are permanently leaving the country, as a temporary resident or Working Holiday Visa holder, you can apply to get a refund of your super fund, however you will get taxed 65% as of the 1st of July 2017.

Remember, there are 2 requirements you need to meet BEFORE applying for your superannuation refund:

- You must be outside of Australia when you apply.

- Your visa must have expired or you must cancel it before you can apply. To cancel your visa, you can click on this link: https://www.homeaffairs.gov.au/Trav/Work/Work/Superannuation

 

What do I need to do to get my super fund back?

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- You will need to contact your superannuation fund, provide the required identification and visa details, as well as an address outside of Australia in order to receive your cheque for the refund.

 

- If you didn't open your own super fund and decided to go with your employers' accounts, you will need to go on the ATO website. You will need to know the super fund details: superannuation fund name, its Australian Business Number(ABN) found on its website and your member account number. Here is the link to apply for a departing Australia superannuation payment: https://www.ato.gov.au/assets/0/104/188/217/e9f2abac-d24a-46e5-881a-d5f89131fdf7.pdf

 

- If you don't know which super funds your employers were using (or if you can't get all the details), you will need to find your super funds through the ATO website (it is called "lost super"). Here is the link to apply for it:

https://www.ato.gov.au/assets/0/104/188/217/50753bf8-ab7a-4822-99ce-ef128282e2a3.pdf

 

I am leaving after my first year in Australia but coming back for my second year later on, can I get my first year refund now?

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Yes you can, as long as the 2 requirements are met (you are outside of Australia AND your visa has expired). However, be aware that closing then opening a new superannuation account might involve more fees, so it is worth looking into the fine prints to find out whether it is worth keeping the account active when you are away.

 

I think that a super fund is better than mine, can I switch?

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Yes, you can switch and ask your new super fund to transfer the money from the former fund to the new one. Note, there might be a fee to proceed.

 

I have worked under my ABN (Australian Business Number) for 6 months for someone but they haven't paid any superannuation money, it is normal?

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Yes, it is normal. When you work under your ABN, you are getting paid as a business which means you are liable to pay your taxes by yourself (they are not deducted from your pay) as well as your insurances and superannuation (the employer doesn't cover you for these). Therefore, you might get paid a bit more under your ABN, but you need to consider the pros and cons.

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I heard that if I don't claim my super refund after 6 months, they block the account and I will no longer be able to access it?

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If your super fund is inactive for 6 months, the money will be transferred to the ATO, therefore you will need to ask the ATO in order to get your super back (see "What do I need to do to get my super fund back?"). Please note that admin and other fees are charged for accounts sitting there, so it is best for you to claim your superannuation sooner rather than later as the money is most likely to go down.

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It sounds too complicated, is there an easier way?

 

Yes, there is. You can certainly contact a tax agent (Google "tax agent superannuation return backpacker" and you will find them) who will do the hard work for you. This is not free but the tax agent will make sure to find out where ALL your super fund money is.

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I hope this article is helpful. Don't forget to share to give the info to your friends.