Are you eligible for Australian Superannuation?
Saving for our pension is one of the most important goals our financial planning can have. In a world as uncertain as ours, where there is little chance of receiving a traditional pension it is vital that we make our own plans.
Australian citizens and workers have a great option when planning for their retirement, superannuation. If you don’t know what Superannuation is feel free to check out our blog “What is Superannuation? An overview.” Superannuation is a scheme to help Australian workers to save for their retirement by combining contributions by the employer and the worker. These contributions are then invested in a Superannuation fund that matures and produces benefits for the worker or his beneficiaries when he retires or dies.
Who qualifies or is eligible for Superannuation employer contributions?
You are entitled to superannuation employer contributions if you are 18 years or older but under 70 years of age. You must also have been paid a minimum of $450 for each month. You are still entitled to superannuation employer contributions even if you are under 18 years of age if you have worked more than 30 hours for that month.
How much does your employer have to pay towards your Superannuation fund?
If you qualify for Superannuation employer contributions your employer is under law to contribute a minimum of 9% of your basic pay into your superannuation also called super account every quarter. These employer superannuation contributions are also called super guarantee payments.
Where are these super guarantee payments deposited?
Super guarantee payments are deposited into two possible financial products, Super funds and retirement savings accounts. Let’s have a brief look at what these products mean for you and me.
Super funds are funds managed by trustees. Each Super fund has its own rules but must also comply with specific government rules which are set out to guarantee the fund is kosher and managed fairly. Super guarantee payments can only be deposited in complying Super funds.
Retirement savings accounts are very similar to Super funds and follow similar rules. Financial institutions like banks and insurance companies provide retirement savings accounts. Their ultimate goal and method are the same as super funds, they accept super contributions and give you benefits when you retire are seriously injured/disabled or when you die to your beneficiaries.
What do you need to remember?
If you are working (legally) in Australia you are most likely eligible for super employer contributions. The requirements are simple, if you are working more than 30 hours, or are over 18 years old and earned over $450 you are eligible for super employer contributions.
Your employer is required to contribute 9% of your wage as super guarantee payments toward your superannuation fund. You can choose to which fund or retirement savings account these payments go to.