Understanding superannuation in Australia

Australian DollarDo you remember in our ‘Tips when looking for part time or casual work while studying in Perth’ blog, we spoke about how international students have the same workplace rights as all other workers in Australia? This includes access to superannuation.

 

What is superannuation?

Long story short, superannuation is your retirement fund. You will live on this money when you retire – so the more money in your superannuation (or ‘super’ in ‘Australian English’… because we like to shorten our words) account, the better.

 

For the purposes of the information below, the ‘employer’ is the company you work for, and the ‘employee’ is you.

 

Under the superannuation guarantee, your employer must pay super contributions of 9.5 per cent of the employee’s ordinary time earnings, under the following conditions:

  • when an employee is paid $450 or more before tax in a month and is:
    • over 18 years, or
    • under 18 years and works over 30 hours a week.

 

Super contributions must be paid at least quarterly (every three months) into the employee’s nominated account. While you can make voluntary contributions to your super fund, it is most commonly the responsibility of your employer to contribute to your fund.

 

What to do if your super hasn’t been paid?

If you think your superannuation hasn’t been paid, you can make a complaint to the Australian Taxation Office. But before you do this, you should follow a checklist listed on the Fair Work Ombubsman website:

  • know the award or registered agreement covering your employment
  • check if your award or agreement has extra terms about super (use the filter above or see our full list of awards)
  • check a pay slip to see if it has information about your super payments
  • contact your super fund to find out whether a payment has been made
  • talk to the employer if you have any concerns.

 

If there are extra superannuation terms on top of the superannuation guarantee in your award or agreement, you can contact the Fair Work Ombudsman for further assistance. The FWO also has a Translating and Interpreting Service if you have trouble speaking or understanding English.

 

Which super fund should I use?

Most employers have a preferred super fund they use to process their contributions; if you do not nominate your own super fund, your employer will use their own one.

 

Further, if you are working on some types of visas, your employer is not obliged to offer you a choice of superannuation fund, and will use their preferred supplier. Regardless, you have the right to ask.

 

There are many super funds you can choose from. We would recommend you do your research and compare available super funds. The ASIC Money Smart website has some great advice about picking your perfect super fund.

 

Consolidating your super

Across your lifetime, you will change jobs a number of times – some of which might use the same super fund, some of which might not. This means that your details may be linked to more than one super fund and, therefore, be paying multiple sets of fees.

 

If this sounds like you, it is recommended that you consolidate your super funds into one account. By doing this it will be easier to keep track of your super, reduce your paperwork and, of course, save you money by only having to pay one set of fees.

 

For more information on consolidating your super funds, visit the ASIC Money Smart website.

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