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The Government flood levy and your super

The flood levy was introduced by the Australian Government to assist communities affected by recent natural disasters and to help rebuild essential infrastructure.

Understanding the flood levy

The flood levy will only apply from 1 July 2011 to 30 June 2012 for individuals with a taxable income of over $50,000, unless you are exempt*. There are certain payments you may receive from superannuation funds that are considered taxable income for the purposes of the flood levy.

How much is the flood levy?  

The flood levy only applies to individuals who have a taxable income (including relevant super income) over $50,000 and increases for amounts over $100,000. The table below illustrates how the levy will be applied.

How will your super be affected?

The flood levy will be deducted* from certain superannuation cash benefits including:

• the taxable component of all superannuation lump sum and pension benefits before age 60;

• the taxable component of a lump sum death benefit paid to a non-dependant beneficiary;

• the taxable component of a disablement benefit (including insurance component).

The levy will generally not apply if you are:

• over age 60;

• rolling over your money between super funds;

• taking cash amounts less than $200.

* For more information about who is exempt from the flood levy, refer to Flood levy information for individuals on the ATO website.

Example: How a super lump sum withdrawal works.

John is 58 and withdraws a superannuation lump sum of $100,000 ($50,000 tax free component and $50,000 from a taxable component). John has no other income. The flood levy is applied as follows:

• no levy is payable on the $50,000 tax free component (exempt income).

• 0.5% on $50,000 taxable component, a levy of $250 is payable.

John paid $250 flood levy.

Example: How a super income stream payment works.

Mary is aged 59 and draws down an income of $90,000 from her Transition to Retirement Pension account. The income does not contain untaxed funds. Mary has no other income. The flood levy is applied as follows:

• No levy is payable on the first $50,000 of her income (exempt income)

• 0.5% on $40,000 taxable component, a levy of $200 is payable

Mary paid $200 flood levy.

When is the levy applied?

The levy is payable on superannuation lumps sum or pension payments and is deducted from your account at the time of payment which may also include other applicable taxes and/or Medicare levy.

If you want to know more about the flood levy:

• See the ATO website - Flood levy information for individuals
• Contact RecruitmentSuper on 1300 304 000 between 8am and 10pm (AEST)

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