Many people work in Australia as a temporary resident but is the superannuation guarantee contribution payable? And if it is, what happens to their super on departure?
The superannuation guarantee is payable for all employees and some contractors regardless if they are temporary residents subject to the usual provisions. That is, they earn $450 or more per month and they are over 18 years old. If they are under 18 years old and employed for no more that 30 hours per week, SGC is not applicable.
So what happens to Inga’s from Sweden super when she returns home?
Inga (& other temporary residents) are able to transfer super benefits accumulated while working in Australia if all of the following apply:
- she visited on a temporary visa (excluding visa subclasses 405 and 410)
- her visa has ceased to be in effect
- she has left Australia.
Inga’s claim is a ‘departing Australia superannuation payment’ (DASP). The DASP may be claimed online or via a paper claim form. Once the temporary visa has been finalised the ATO will transfer the funds to the nominated super / pension style fund in the home country. The funds are not transferred to the individual’s account.
Taxation of the funds is dependent on each individual country.
Applications can be prepared prior to departure but can only be submitted after leaving Australia and once visa has ceased to be in effect.
Sections of the online application include:
- personal details – name and date of birth
- email address
- passport country and number
- Australian tax file number (TFN).
The ATO confirm the immigration status with the Department of Immigration and Border Protection (DIBP).
If making a paper claim, the resident may need to lodge a Certification of Immigration Status and/or request to cancel a Temporary Resident visa (Form 1194) with DIBP. DIBP will issue verification of your immigration status to your fund electronically, but charges a fee for this service.
The funds are delivered to the fund listed on the application.
If the temporary resident does not make a claim within 6 months the super fund must transfer the member balance to the ATO. The balance will be held until the member claims it.
Benefits less than $5,000
If the withdrawal benefit is less than AUD$5,000, the resident has the option of providing the fund with alternative evidence of their immigration status. For this they will need certified copies of both the:
- expired visa (or evidence that they were the holder of a temporary visa which has ceased to be in effect)
- passport, showing the departure stamp (this stamp is not issued automatically; it will need to requested when leaving Australia).
Who cannot claim a DASP?
New Zealand citizens can not claim DASP as they are able to retire in Australia. However, if a New Zealand citizen is leaving Australia permanently, they may be able to transfer the super to New Zealand.
From 1 July 2013 individuals may transfer retirement savings between Australia and New Zealand after their emigration from one country to the other.
The transfer of retirement savings is voluntary for members. It is also voluntary for Australian super funds as to whether they will accept transferred retirement savings.
Transfers are only available of retirement savings between a complying super fund regulated by the Australian Prudential Regulation Authority (APRA) and a New Zealand KiwiSaver scheme.
Transfers from a New Zealand KiwiSaver scheme are not taxed when they are transferred from a participating Australian super fund. They are also taxfree if withdrawn from the super account once the resident is legally allowed to access them.
Gillian Holzberger – Senior Accountant