68. The primary aim of the superannuation system is to ‘deliver private income to enhance the living standards of retired Australians’. It is one of the most significant forms of wealth for many Australians. Other policy aims of the superannuation system include:
- helping to address the challenges posed by Australia’s ageing population;
- intergenerational equity—so that the increased costs of an ageing population are not ‘fully borne by the generation that will be working in several decades’ time when the dependency ration is higher’; and
- income smoothing—‘to enable individuals to smooth their income over their lifetime, and thus maintain their standard of living once they retire’.
69. Superannuation is generally provided through a trust structure in which trustees hold the funds on behalf of members. Trustees owe members statutory fiduciary duties under the Superannuation Industry (Supervision) Act 1993 (Cth). The Act and its regulations govern the operation of superannuation funds. Funds are also governed by their trust deeds and governing rules. The Australian Securities and Investments Commission (ASIC), the Australian Prudential Regulation Authority (APRA) and the Tax Commissioner supervise superannuation funds.
70. Most Australians have their superannuation in an ‘accumulation fund’, in which a member’s superannuation benefits in retirement are based on the amount contributed by his or her employers, the amount contributed voluntarily by the member, and the amount earned by the superannuation fund in investing the contributions.
71. There are a number of age-based rules in superannuation law, providing when members can access their superannuation, and restricting the accumulation of superannuation for older persons when they reach certain ages. The former group of rules may constitute a ‘pull’ to early retirement if age-settings are too low. The latter group of rules, by contrast, has the potential to ‘push’ older persons from employment due to the messages conveyed about retirement expectations. Some age restrictions may be necessary to ensure that tax concessions are targeted to best support the accumulation of superannuation over the course of a working life.
72. Superannuation can be taxed at three stages: when it goes into the fund—contributions stage; while it is in the fund—earnings stage; and when it leaves the fund—benefits stage. Taxation at the contribution and disbursement stages is explored below, as specific age-based rules apply at these stages.
73. Superannuation generally receives preferential tax treatment across these three stages. The Tax Review outlined the rationale for this treatment, including that tax concessions on superannuation deliver a ‘more neutral overall tax treatment of deferred consumption relative to current consumption’ and reflect the ‘social benefits of overcoming life cycle myopia’:
people not saving adequately for retirement because it is too far in the future for them to adequately ‘see’, and so make adequate provision for their needs.
74. Some commentators have criticised Australia’s superannuation system on a number of grounds, including that it is inequitable. It has been noted that a small portion of high income earners receive a substantial percentage of superannuation tax benefits. Lower income earners may receive comparatively little benefit—including those who spend time out of the workforce, or work part-time, to care for others. This particularly affects women, who overall ‘benefit much less from superannuation’.
75. Another criticism is that the justifications for the superannuation system are weak, or that it does not meet its underpinning policy aims. For example, Dr Richard Denniss argues that the system fails to achieve
its stated goal of taking pressure off the Commonwealth budget by reducing outlays on the age pension. A dollar spent on tax concessions for super simply does not lead to a dollar’s reduction in the cost of providing the age pension, now or in the future. It doesn’t even come close.
76. The Income Tax Assessment Act 1997 (Cth) refers to two categories of contributions. These are ‘concessional contributions’ (also known as ‘before-tax’ or ‘deducted’ contributions) and ‘non-concessional contributions’ (also known as ‘after-tax’ and ‘undeducted’ contributions). Concessional contributions include employer contributions—including mandatory and voluntary contributions, and most contributions made by self-employed persons. Non-concessional contributions include members’ personal contributions and contributions for a spouse.
77. A further type of superannuation contribution comprises government contributions and co-contributions under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (Cth).
78. Mandatory (or ‘mandated’) employer contributions. These include Superannuation Guarantee contributions as well as contributions made under an industrial agreement or award.The Superannuation Guarantee contribution is currently 9% of an employee’s ordinary earnings. Employers are currently not required to pay Superannuation Guarantee contributions for employees 70 years and over.
79. Employers may fund Superannuation Guarantee contributions by making contributions under ‘salary sacrifice’ arrangements, in which an employee agrees that an employer will pay a portion of salary or wages directly into superannuation—that is, from pre-tax income. The employee pays less income tax as a consequence, and the arrangement may also have tax benefits for the employer.
80. Amendments that commence on 1 July 2013 will change superannuation laws to gradually increase the minimum superannuation contribution rate from 9% to 12%; and to remove the maximum age limit for an employee at which the Superannuation Guarantee no longer needs to be provided.
81. The Assistant Treasurer and the Minister for Financial Services and Superannuation, the Hon Bill Shorten MP, stated that removing the age limit will ‘provide an incentive for those older Australians who wish to remain in the workforce longer not to be discriminated against if they do so’.
82. Voluntary employer contributions. Employees may also enter into arrangements with employers to deduct extra portions of money from their salary and pay it into their superannuation accounts. The Superannuation Industry (Supervision) Regulations 1994 (Cth) (SIS Regulations) restrict contributions to superannuation funds, other than mandatory employer contributions, based on the age of the fund member as follows:
- under 65 years—no restrictions;
- 65 until 75 years—contributions can be made when the member meets a work test: they must be ‘gainfully employed’ on a part-time basis, that is, at least 40 hours over a 30-day period in the financial year; and
- 75 years and over—contributions cannot be made.
83. The Australian Government has noted that persons aged 70 to 74 are ‘less likely to be able to negotiate voluntary superannuation contributions with their employers’—perhaps because of the current 70-year age limit for Superannuation Guarantee contributions.
84. The above age-based restrictions on non-mandated employer contributions are a barrier to accumulating superannuation for mature-age persons. The ALRC is interested in hearing about the effect these restrictions have on mature age workforce participation. While these restrictions may send a certain message about retirement age expectations, the application of the work test may act as an incentive to continued employment.
85. The Tax Review has recommended that the restrictions on persons aged 75 and over making contributions should be removed, but that a work test should continue to apply for persons aged 65 and over.
86. Contributions by self-employed.Self-employed persons may, but are not required to, make superannuation contributions for themselves. Contributions by the self-employed are concessional when they claim a deduction for them, as discussed below.
87. The Tax Review has recommended against extending the Superannuation Guarantee for small business people. It stated that they may face higher ‘costs of compulsion’ than employees, and that ‘[m]any small business people have alternative strategies for saving for their retirement, often with different time profiles than those applying to employees’.
88. Concessional contributions are tax deductable. Employers are currently entitled to deductions for contributions made for employees under the age of 75 years, and for contributions mandated by industrial agreements or awards. The self-employed may also claim a tax deduction for contributions made until they reach age of 75 years. Deductions may be claimed for both mandatory and voluntary contributions.
89. From 1 July 2013, employers will be able to claim income tax deductions for Superannuation Guarantee contributions for employees age 75 and over. This aligns ‘the availability of an income tax deduction to an employer with the measure to remove the Superannuation Guarantee maximum age limit’.
90. The measure does not extend to remove the age limits on deductions for voluntary contributions for employees or for contributions for self-employed persons. This is consistent with SIS Regulation restrictions on persons aged 75 and over making voluntary contributions.
91. Contribution splitting. Members of a superannuation fund may apply to split certain concessional superannuation contributions with their ‘spouse’. The Superannuation Industry Supervision Act defines ‘spouse’ to include a person:
- that the member is in a relationship that is registered under certain state and territory laws (including registered same-sex relationships); and
- who lives with the member on a genuine domestic basis in a couple relationship.
92. Superannuation funds are not required to offer their members the option to split their superannuation contributions. Maximum limits apply to the amount of superannuation that may be split, and the member is also limited to one application per financial year.
93. Members cannot split their contributions for a spouse aged 65 years or older, or a retired spouse who has reached preservation age—that is, the age that a person may access superannuation benefits when retired. It has been noted that, without this provision, a spouse who has reached 65 years or is permanently retired could immediately access the contributions.
94. Individual fund members may make voluntary personal contributions to their superannuation funds from after-tax income or capital. Employees usually cannot claim a deduction for personal contributions. The age-based restrictions in the SIS Regulations apply to voluntary personal contributions. As discussed above, these restrictions, and the associated work test, may affect mature age participation in the workforce.
95. A person may make a non-deductable superannuation contribution on behalf of a ‘spouse’, and may be eligible for a tax offset when the spouse is receiving low or no income (less than $13,800 for the income year). The maximum rebate for the income year is $540.
96. The Income Tax Assessment Act 1997 definition of a spouse, applicable in this context, is consistent with the definition in the Superannuation Industry (Supervision) Act.A person is not entitled to the offset if living separately from the spouse on a permanent basis.
97. Spouse contributions can be made where the spouse is under 65 years, or has reached 65 but not yet 70 years and is gainfully employed on a part-time basis. Contributions cannot be made on behalf of a spouse aged 70 years and over.
98. Low-income earners making personal after-tax superannuation contributions may be eligible for Australian Government co-contributions under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (Cth) and regulations. The purpose of government co-contributions is to help low-income earners save for retirement.
99. The co-contribution amount depends on the personal contribution amount and the individual’s income. From 2008–09, the maximum government co-contribution is $1,000 per income year. The government co-contribution will be reduced when the Low Income Earners Government Contribution scheme (discussed below) commences on 1 July 2012.
100. Persons aged 71 years and over are ineligible for government co-contributions. This affects workers who are aged 71 but under 75 years (as noted above, persons 75 years and over cannot make voluntary contributions to their superannuation funds). The ALRC is interested in hearing whether the ineligibility of persons aged 71 years and over for government co-contributions is a disincentive to employment for mature persons.
101. In addition to the co-contribution scheme, the Australian Government has introduced the Low Income Earners Government Contribution. This will provide workers earning less than $37,000 per year with a superannuation contribution of up to $500 annually. This measure is aimed at improving the fairness of the Superannuation Guarantee system—particularly in relation to tax concessions:
Currently, 3.6 million low-income Australians, including around 2.1 million women get no (or minimal) tax benefit from contributing to superannuation, due to the fact that the 15 per cent superannuation contribution tax is above or equivalent to their income tax rate.
102. This measure will ‘effectively return the tax on the superannuation contributions made to their fund’. In contrast with the co-contribution scheme, no age test will apply to Low Income Earners Government Contribution.
Question 10. What changes, if any, should be made to the Superannuation Guarantee scheme, to remove barriers to work for mature age persons?
Question 11. The Superannuation Industry (Supervision) Regulations 1994 (Cth) prescribe age-based restrictions on voluntary contributions. Members cannot:
(a) make voluntary contributions from age 65 until age 75 unless they meet a work test; or
(b) make voluntary contributions from age 75.
What effect do these restrictions have on mature age participation in the workforce? What changes, if any, should be made to these regulations to remove barriers to work for mature age persons?
Question 12. The Superannuation Industry (Supervision) Regulations 1994 (Cth) prescribe age-based restrictions in relation to members splitting contributions with a spouse and making contributions to a spouse’s fund. Members cannot:
(a) split contributions for a spouse aged 65 and over;
(b) split contributions for a retired spouse of preservation age and over;
(c) make spouse contributions for a spouse aged 70 and over; or
(d) make contributions for a spouse aged 65 but under 70 unless the spouse meets a work test.
What effect do these restrictions have on mature age participation in the workforce? What changes, if any, should be made to these regulations to remove barriers to work for mature age persons?
Question 13. In what ways, if any, does the age restriction on government co-contributions in the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (Cth) create barriers to work for mature age persons? What changes should be made to the Act to remove such barriers?
Taxing superannuation contributions
103. Concessional contributions are taxed at 15%. This rate is substantially lower than the marginal tax rates applicable to the income of most full-time earners. Non-concessional contributions are generally not taxed in the fund, as the member has already paid tax on them.
104. There are restrictions, or ‘caps’, on the contributions that members can make each financial year before they must pay excess tax. In effect, the caps limit superannuation contributions. The purpose of the caps is to:
- ensure that superannuation benefits result from contributions ‘that have been made gradually over the course of the person’s life’;
- ensure that tax concessions for superannuation are fiscally sustainable and appropriately targeted; and
- restrict the use of superannuation as a tax-minimising vehicle.
105. There are different caps for concessional and non-concessional contributions. Government contributions and co-contributions do not count towards the caps.
106. The ‘concessional contributions cap’ is indexed annually to average weekly ordinary time earnings, and in 2011–12 was set at $25,000. Concessional contributions over this cap are taxed at an additional 31.5%.
107. From 2007–8 to 2011–12, an increased transitional concessional contributions cap applies to contributions made by members aged 50 years and over. In 2011–12 this transitional cap is $50,000. In certain previous years—namely 2007–08 and 2008–09—the transitional cap was $100,000. The transitional concessional contributions cap is scheduled to expire on 1 July 2012.
108. The Australian Government has announced that, from 1 July 2012, the $50,000 concessional contributions cap will continue for persons aged 50 years or over with superannuation balances below $500,000.
109. The Australian Government’s rationale for continuing the increased cap is that it allows persons over 50 years ‘to “catch up” on their superannuation contributions at the stage in their lives when they are most able to do so’; and that this should particularly assist those who have spent periods out of the workforce, for example, ‘women with broken work patterns’. In November 2011, the Hon Bill Shorten MP stated that the Australian Government will undertake ‘further consultation on compliance cost issues raised by industry’ in relation to this measure.
110. The ALRC is interested in whether this measure affects mature age participation in the workforce.
111. The ‘non-concessional contributions cap’ is a multiple of the concessional contributions cap. For example, in 2011–12, the non-concessional contributions cap is $150,000—six times the $25,000 concessional contributions cap. Contributions over the cap are taxed at 46.5%.
112. Persons under 65 years may bring forward two years’ entitlement for non-concessional contributions. This is referred to as the ‘bring-forward rule’, under which non-concessional contributions of up to three times non-concessional contributions cap in a year may be made—for example, up to $450,000 in 2011–12. The full amount may be contributed in the first year. Alternatively, a contribution of less than the full amount in the first year may be made, followed by a contribution of the shortfall in the second year, the third year, or across both years. The bring-forward rule is automatically triggered when a person under 65 years exceeds the non-concessional contributions cap.
113. Persons aged 63 or 64 years can use the bring-forward rule without meeting the work test imposed by reg 7.04 of the SIS Regulations in the following years of the three-year period (that is, when they reach 65 years, as discussed above). The bring-forward rule is therefore particularly important for those who are just about to retire and do not intend to continue working after the age of 65, as it can be used ‘as a last-minute dash into super before the gates close’. However, if the person did not make the full contribution in the first year, and wishes to contribute in the second or third year, he or she must satisfy the work test if he or she has reached 65.
114. To ‘help prevent a person from inadvertently contributing more than the non-concessional contributions cap’, the SIS Regulations also limit the amount of non-concessional contributions that superannuation funds can accept. For persons aged 64 years or less, the maximum contribution amount is three times the non-concessional cap. For persons aged 65 to 75 years, the limit is the non-concessional contributions cap.
Question 14. What effect, if any, does the increased concessional contributions cap for persons aged 50 years and over have on mature age participation in the workforce?
Question 15. What effect, if any, does the ‘bring forward rule’ (in relation to the non-concessional contributions cap) have on mature age participation in the workforce? What changes should be made to this rule to address barriers to such participation?
Release of superannuation benefits
115. The SIS Regulations provide conditions for the release of superannuation benefits—that is, when, and in what form, benefits may be accessed by superannuation fund members. Generally—and subject to the superannuation fund’s governing rules—members may access benefits as a lump sum, an income stream, or a combination of both.
When can members access superannuation?
116. At age 65. There are no restrictions on the way persons 65 years and over may access their superannuation benefits.
117. At ‘preservation age’ if retired. The preservation age ranges from 55 to 60 years, depending on year of birth:
(a) for a person born before 1 July 1960—55 years; or
(b) for a person born during the year 1 July 1960 to 30 June 1961—56 years; or
(c) for a person born during the year 1 July 1961 to 30 June 1962—57 years; or
(d) for a person born during the year 1 July 1962 to 30 June 1963—58 years; or
(e) for a person born during the year 1 July 1963 to 30 June 1964—59 years; or
(f) for a person born after 30 June 1964—60 years.
118. Accordingly, the preservation age ‘is legislated to increase from 55 to 60 between the years 2015 and 2025’.
119. A person of, or over, the preservation age is considered retired when an arrangement under which he or she was ‘gainfully employed’ has ended and the superannuation fund trustee is ‘reasonably satisfied’ that he or she does not intend to become gainfully employed again either part-time or full-time; or he or she has reached the age of 60 years before or on retiring.
120. There are no restrictions on the way members of, or over, the preservation age can access their superannuation when they retire.
121. Under the transition to retirement rules. These rules enable members who are of, or over, preservation age to access their superannuation before they retire. Members may only take superannuation benefits as a non-commutable income stream (that is, an income stream that cannot be converted into a lump sum). No more than 10% of the account balance—as at the beginning of the financial year—may be paid each year.Members can continue working in any capacity while receiving superannuation benefits under the transition to retirement rules, as no work test applies.
122. Early access. The Superannuation Act 1976 (Cth) and SIS Regulations provide limited grounds for the early release of benefits, including severe financial hardship and certain compassionate grounds.
Raising the preservation age?
123. The preservation age rules may encourage people to leave the workforce as soon as they can access their superannuation—although this may be ameliorated by the transition to retirement rules, as discussed below. Preservation age settings that are too low may also constitute a disincentive to mature age workplace participation due to the message it sends about retirement expectations. The ALRC is interested in comments on this issue.
124. The Tax Review recommended that the preservation age be increased to 67 years. This aligns with an increase to the Age Pension age, also recommended by the Tax Review, as discussed above. The recommendation implies the convergence of the preservation age and the unrestricted access age at 67 years and, potentially, upwards of 67 years—subject to further review by 2020 also recommended in the Tax Review. This may displace the transition to retirement rules, because these rules apply in the gap between the preservation age and age 65 (the unrestricted access age).
Transition to retirement rules: a workforce incentive?
125. The policy objective behind the transition to retirement (TTR) rules is to ‘encourage people to retain a connection with the workforce for a longer period’ by providing flexibility in the rules to access superannuation benefits.
126. Prior to the introduction of the TTR rules in 2005, workers under 65 years of age generally had to retire before accessing any superannuation benefits. In 2004, the Australian Government noted that this may have led ‘people deciding to retire prematurely just so they can access their superannuation’. Accordingly, the TTR rules to some extent were designed to address this incentive for early retirement.
127. The Australian Government also noted that the pre-2005 laws did not ‘adequately cater for more flexible workplace arrangements where people may choose to reduce their work hours as they get older’. The TTR rules were intended to facilitate continued employment by providing flexibility—enabling preservation-age persons to reduce work hours and supplement their income with a superannuation income stream.
128. The ALRC is interested in hearing from stakeholders whether the transition to retirement rules are an effective incentive to continued workforce participation, as intended.
129. Another way mature age persons can use the TTR rules is to work full-time and boost superannuation. The TTR income stream enables preservation-age workers:
to salary sacrifice more of their remuneration package into superannuation, with the TTR pension income replacing the salary income they would have received if they did not salary sacrifice. Here, the person’s current lifestyle and cashflow can remain the same and, in effect, the super pension withdrawals can fund superannuation contributions.
130. For those who have met their concessional cap through salary sacrificing, it can sometimes be tax effective to fund non-concessional contributions in this way. This use of the TTR rules is limited by the caps on superannuation contributions.
131. It is possible that this use of the TTR rules is an incentive to continued full-time workforce participation for persons of preservation age. It is also possible that this strategy is used by persons who do not intend to retire but are interested in benefiting from the concessional tax treatment applied to superannuation. The ALRC is interested in stakeholder comment in this regard.
132. Access to the TTR rules may be restricted, because not all superannuation funds offer the income stream products that enable members to use this option. In these circumstances, members may need to change superannuation funds if they wish to use the TTR rules. The ALRC is interested in hearing whether this is a barrier to the TTR option—and, consequently, continued workforce participation. If this does constitute a barrier, the ALRC is interested in hearing about measures that could address this issue.
Question 16. The age settings for access to superannuation benefits are:
(a) 55 years increasing to 60 years for ‘preservation age’—when persons may access superannuation if retired; and
(b) 65 years for unrestricted access to superannuation.
The Australia’s Future Tax System Review recommended that the preservation age be raised to 67 years. In what ways, if any, do existing age settings provide incentives for retirement for mature age persons, rather than continued workforce participation? What changes should be made to address these incentives?
Question 17. In practice, how do the ‘transition to retirement’ rules encourage continued mature age participation in the workforce? What changes, if any, should be made to these rules to encourage continued workforce participation?
Question 18. In practice, do persons of preservation age have sufficient access to the ‘transition to retirement’ rules? If not, what measures could improve such access?
Taxing superannuation benefits
133. The tax rate on superannuation benefits depends on a member’s age, whether benefits are taken in lump sum or income stream form, and whether the superannuation fund is exempt from paying tax on contributions and earnings. Benefits from non-concessional contributions (including spouse contributions) and government contributions and co-contributions are tax-free regardless of these factors.
134. In most cases, persons aged 60 years and over are not required to pay tax when they receive superannuation benefits—irrespective of whether benefits are disbursed as lump sums or income streams. Tax-free superannuation for persons 60 years and over was introduced in July 2007 as an incentive for people to stay in the workforce. The Australian Government commented that:
As superannuation benefits would no longer be assessable income, there would be an incentive to continue to work while drawing down on superannuation as people will pay less tax on their work income.
135. However, it is possible that a relatively large sum of tax-free benefits may provide a person 60 years and over with an incentive to retire. Tax-free benefits may conversely constitute a ‘pull’ into retirement.
136. The Tax Review did not examine this issue, as its Terms of Reference directed that it reflect Australian Government policy to ‘preserve tax-free superannuation payments for the over 60s’. It did note, however, that the Australian Government ‘may wish to consider whether the age for tax-free superannuation should increase in line with future increases in the preservation age’.
137. Persons who have reached preservation age but who are under 60 years old can generally withdraw lump sum amounts up to a ‘low rate cap’ amount of superannuation tax-free. The low rate cap is a lifetime limit. In 2011–12 it is $165,000. Amounts above the low cap rate are taxed up to 15% (plus Medicare levy). Benefits paid as an income stream to persons in this age bracket are assessable income taxed at marginal rates (plus Medicare levy) less a 15% offset. The Tax Review considered that the taxation of benefits for this age group should not change.
Question 19. What changes, if any, should be made to the taxation of superannuation benefits to remove barriers to work for mature age persons?
Other barriers to work in superannuation
138. There may be other barriers to work for mature age persons in the superannuation context which the ALRC has not identified in this Issues Paper. The ALRC is interested in hearing from stakeholders about any other ways in which superannuation laws present barriers to work.
139. For example, there may be certain barriers to work for members of defined benefit schemes. Defined benefit schemes pay benefits according to a formula based on factors such as years of service, age and salary—unlike accumulation funds which are based on contributions and earnings. Defined benefit schemes are declining—most are closed to new members.
140. In particular, there may be certain incentives for early retirement for some Australian Public Service employees in defined benefit or ‘hybrid’ funds, such as the ‘54/11’ incentive for some members of the Commonwealth Superannuation Scheme (CSS). As explained by the Australian Public Service Commission, this incentive arises
where a member would be disadvantaged if they remain in employment until age 55 or later by reason that their deferred benefit on resignation before age 55 can be significantly higher than their benefit on retirement at age 55.
141. Similarly, the Public Sector Superannuation Scheme (PSS) has certain design features that may support early retirement for some older scheme members—although analysis has found that the impact is small. The scheme also does not enable members to access TTR rules.
142. Both schemes are closed to new members—the CSS since 1990 and the PSS since 2005.
Question 20. What other changes, if any, should be made to superannuation laws, including tax laws, to remove barriers to mature age participation in the workforce?
 Super Systems Review Panel, Super System Review (2010), pt 1, 15.
 Australian Government, Stronger Super— Government Response to the Super System Review (2010), 3.
 The Treasury, Towards Higher Retirement Incomes for Australians: A history of the Australian Retirement Income System since Federation (2001), 83.
 R Hanegbi, ‘Australia’s Superannuation System: A Critical Analysis’ (2010) 25 Australian Tax Forum 303, 312. See also The Treasury, Australia’s Future Tax System: The Retirement Income System—Report on Strategic Issues (2009), 30. In the former article, Hanegbi challenges the assumptions on which this position is based.
 FaHCSIA, Australia’s Future Tax System: Pension Review Background Paper (2008), 116. See also R Hanegbi, ‘Australia’s Superannuation System: A Critical Analysis’ (2010) 25 Australian Tax Forum 303, 312–313; The Treasury, A More Flexible and Adaptable Retirement Income System (2004), 2.
Superannuation Industry Supervision Act 1993 (Cth) s 52.
Superannuation Industry Supervision Act 1993 (Cth) s 3(1).
 ‘Types of super funds’, ASIC, Moneysmart website <www.moneysmart.gov.au> at 19 April 2012. These are also known as ‘defined contribution funds’.
 As discussed below, ‘non-concessional contributions’ do not receive concessional treatment at the contributions stage.
 The Treasury, Australia’s Future Tax System—The Retirement Income System: Report on Strategic Issues, 3.
 Ibid, 19.
 Ibid, [2.4].
 R Hanegbi, ‘Improving our superannuation regime: a post-Henry review look at superannuation taxation, raising superannuation balances and longevity insurance’ (2010) 25 Australian Tax Forum 425, 441.
 R Hanegbi, ‘Australia’s Superannuation System: A Critical Analysis’ (2010) 25 Australian Tax Forum 303, 314, referring to E Cox, ‘Financing our Futures—How Privatising Retirement Discriminates Against Women’ (2007) 26(3) Dialogue 42.
 See in particular R Hanegbi, ‘Australia’s Superannuation System: A Critical Analysis’ (2010) 25 Australian Tax Forum 303.
 Richard Denniss, ‘Super Rort for Wealthy’, Canberra Times (Canberra), 4 February 2012, <www.canberratimes.com.au>.
Income Tax Assessment Act 1997 (Cth) ss 292-25, 292-165, 995-1.
 Ibid ss 292-90, 292-165.
 The 15% concessional tax rate applies to ‘most contributions made by the self-employed’: R Hanegbi, ‘Australia’s Superannuation System: A Critical Analysis’ (2010) 25 Australian Tax Forum 303, 307.
 These contributions are taxed similarly in the fund as non-concessional contributions but do not fall into this category: Income Tax Assessment Act 1997 (Cth) s 292-90(2)(c)(i).
Superannuation Industry (Supervision) Regulations 1994 (Cth) reg 5.01(1).
Superannuation Guarantee (Administration) Act 1992 (Cth) s 19(2).
 Ibid s 27(1).
Superannuation Guarantee (Administration) Amendment Act 2012 (Cth) s 2; sch 1. The Act received royal assent on 29 March 2012.
 Commonwealth of Australia, Parliamentary Debates, House of Representatives, 2 November 2011, B Shorten—Assistant Treasurer and Minister for Financial Services and Superannuation), 1243.
 See also Superannuation Industry (Supervision) Regulations 1994 (Cth) regs 1.03, 7.01. ‘Gainful employment’ is employment or self-employment ‘for gain or reward in any business, trade, profession, vocation, calling, occupation or employment’: reg 1.03.
 The rules are provided for in Ibid reg 7.04.
 Australian Government, Tax Policy Statement: Stronger Fairer Simpler—A Tax Plan for our Super (2010), 26.
 The Treasury, Australia’s Future Tax System: Final Report (2010), Rec 20.
 The Treasury, Australia’s Future Tax System—The Retirement Income System: Report on Strategic Issues, [2.4].
Income Tax Assessment Act 1997 (Cth) ss 290-60(1); 290-80(1).
 Ibid subdiv 290-C.
 Ibid subdiv 290-A.
Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Act 2012 (Cth) sch 5.
 Revised Explanatory Memorandum, Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011 (Cth), [5.5].
Superannuation Industry (Supervision) Regulations 1994 (Cth) div 6.7. Non-concessional contributions made before 5 April 2007 can also be split: reg 6.41(3).
Superannuation Industry (Supervision) Act 1993 (Cth) s 10.
Superannuation Industry (Supervision) Regulations 1994 (Cth) reg 6.45.
 Ibid regs 6.40, 6.44.
 Ibid reg 6.44; APRA, Prudential Practice Guide: SPG 270—Contribution and Benefit Accrual Standards for Regulated Superannuation Funds (2012), .
 Eg, CCH Australia, Australian Superannuation Commentary (2012), [2-980].
 See Income Tax Assessment Act 1997 (Cth) subdiv 290-C.
Superannuation Industry (Supervision) Regulations 1994 (Cth) reg 7.04.
Income Tax Assessment Act 1997 (Cth) s 290-230.
 Ibid s 290-235(2).
 Ibid s 995-1(1).
 Ibid s 290-230(3).
Superannuation Industry (Supervision) Regulations 1994 (Cth) reg 7.04(1).
 Explanatory Memorandum, Superannuation (Government Co-Contribution for Low Income Earners) Bill 2003 (Cth), [1.4].
Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (Cth) s 9.
 B Shorten, ‘Superannuation Measures as Part of the Mid-Year Economic and Fiscal Outlook’ (Press Release, 29 November 2011).
Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (Cth)s 6(1). This restriction is intended to limit the cost of superannuation tax concessions: The Treasury, Australia’s Future Tax System: The Retirement Income System—Report on Strategic Issues (2009), 32.
 This measure is provided for in the Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Act 2012 (Cth), which received royal assent on 29 March 2012.
 Ibidsch 4. The income figure relates to adjusted taxable income.
 Australian Government, Tax Policy Statement: Stronger Fairer Simpler—A Tax Plan for our Super (2010), 13.
Debates, House of Representatives, 2 November 2011, 12417 (B Shorten—Assistant Treasurer and Minister for Financial Services and Superannuation), 12418.
 Australian Government, Tax Policy Statement: Stronger Fairer Simpler—A Tax Plan for our Super (2010), 2. Taxation and superannuation contributions are discussed in more detail below.
Income Tax Assessment Act 1997 (Cth) s 295-160.
 See R Hanegbi, ‘Improving our superannuation regime: a post-Henry review look at superannuation taxation, raising superannuation balances and longevity insurance’ (2010) 25 Australian Tax Forum 425, 428.
Income Tax Assessment Act 1997 (Cth) s 292-5.
 Australian Government, A Plan to Simplify and Streamline Superannuation—Detailed Outline (2006) 27, 30, Explanatory Memorandum, Tax Laws Amendment (Simplified Superannuation) Bill 2006 (Cth), [1.11].
 Explanatory Memorandum, Tax Laws Amendment (Simplified Superannuation) Bill 2006 (Cth), [1.12].
Income Tax Assessment Act 1997 (Cth) subdiv 292-B; Superannuation (Excess Concessional Contributions Tax) Act 2007 (Cth) s 5.
Income Tax (Transitional Provisions) Act 1997 (Cth) s 292-20.
 Australian Government, Fact Sheet: Superannuation—Concessional Contributions Caps (2011).
 B Shorten, ‘Superannuation Measures as Part of the Mid-Year Economic and Fiscal Outlook’ (Press Release, 29 November 2011). See also Australian Government, Concessional Superannuation Contribution Caps for Individuals aged 50 and over (2011).
Income Tax Assessment Act 1997 (Cth) subdiv 292-C; Superannuation (Excess Non-concessional Contributions Tax) Act 2007 (Cth) s 5.
Income Tax Assessment Act 1997 (Cth) s 292-85(3)–(4). Specifically, the person must be under 65 years at any time in the relevant financial year: s 292-85(3)(b).
 Ibid s 292-85(4).
 Ibid s 292-85(3).
 The Bull, How to dump $450,000 into your super in one year <www.thebull.com.au> at 11 April 2012.
Explanatory Statement, Superannuation Industry (Supervision) Amendment Regulations (No. 1) 2007 (Cth), item 80.
Superannuation Industry (Supervision) Regulations 1994 (Cth) reg 7.04(3). This provision refers to members’ ages on 1 July of the relevant financial year.
 Ibid sch 1 item 106.
 Ibid reg 6.01.
 Australian Government, A Plan to Simplify and Streamline Superannuation—Detailed Outline (2006), x.
Superannuation Industry (Supervision) Regulations 1994 (Cth) reg 6.01(7).
 Ibid sch 1 item 101.
 Ibid regs 1.05(11A)(a); 1.06 (9A)(a); 6.01; sch 1 item 110.
 Ibid reg 6.01. This reflects the underlying policy that the rules are ‘not intended to provide people with a vehicle to dissipate their superannuation savings excessively before retirement’: Explanatory Statement, Superannuation Industry (Supervision) Amendment Regulations (No. 2) 2005 (Cth).
 ATO, Transition to retirement—information for superannuation professionals (2006).
Superannuation Act 1976 (Cth) s 79B; Superannuation Industry (Supervision) Regulations 1994 (Cth) regs 6.01, 6.19A.
 See The Treasury, Australia’s Future Tax System: Final Report (2010), pt 2, 131.
 The Treasury, Australia’s Future Tax System—The Retirement Income System: Report on Strategic Issues, 17l.
 The Treasury, Transition to Retirement Consultation Paper, 2004, 4.
 The Treasury, A More Flexible and Adaptable Retirement Income System (2004), 10.
 Ibid, 10.
 D Shirlow, ‘Bringing the use of TTR pensions closer to home’ (2011) (4) CCH Australian Superannuation News .
 Most superannuation funds are taxed on their contributions and earnings: R Hanegbi, ‘Improving our superannuation regime: a post-Henry review look at superannuation taxation, raising superannuation balances and longevity insurance’ (2010) 25 Australian Tax Forum 425, 431; ‘Key factors that affect how your super payout is taxed’, ATO website <www.ato.gov.au> at 11 April 2012. Funds that are more likely to be untaxed include ‘certain public sector funds or schemes, such as government funds for public servants’ ATO website <www.ato.gov.au> at 11 April 2012.
Income Tax Assessment Act 1997 (Cth) 307-135; subdiv 307D. Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Act 2012 (Cth) sch 4, item 2, s 12B.
Income Tax Assessment Act 1997 (Cth) s 301-10. Disbursements to members over 60 years from untaxed funds are taxed, albeit at a lower rate than those under 60 years. Income Tax Assessment Act 1997 (Cth) subdiv 301-C.
 Australian Government, Budget Stategy and Outlook—Budget Paper No. 1 (2006-07), 1–11.
 ‘Terms of Reference’, The Treasury, Australia’s Future Tax System <www.taxreview.treasury.
gov.au/Content/Content.aspx?doc=html/home.htm> at 11 April 2012.
 The Treasury, Australia’s Future Tax System—The Retirement Income System: Report on Strategic Issues 17.
Income Tax Assessment Act 1997 (Cth) s 301-20.
 Ibid s 307-345; ‘Low cap rate amount’, ATO website <www.ato.gov.au> at 11 April 2012.
Income Tax Assessment Act 1997 (Cth) s 301-20.
 Ibid s 301-25.
 The Treasury, Australia’s Future Tax System: Final Report (2010), 117.
 Super Systems Review Panel, Super System Review (2010), pt 2, 176. The review also states that in 2009 ‘only 2 per cent of members of large APRA funds were in ‘pure’ defined benefit funds, (that is, funds where all members receive only a defined benefit on retirement) 39 per cent were in ‘hybrid’ funds (funds that offer both defined benefit and accumulation benefits to an individual member, or more commonly have some defined benefit members and a much larger number of pure accumulation benefit members)’.
 See footnote above for a definition of hybrid funds.
 ‘Superannuation and mature-aged APS workers’, Australian Public Service Commission website <www.apsc.gov.au> at 19 April 2012.
 Management Advisory Committee, Organisational Renewal (2003), Commonwealth of Australia, 4.
 Public Sector Superannuation Scheme and Australian Reward Investment Alliance, Fact Sheet: Transition to Retirement (2007).
 ‘Commonwealth Superannuation Scheme’ and ‘The Public Sector (PSS) Superannuation Scheme’, Department of Finance and Deregulation, Website <www.finance.gov.au> at 11 April 2012.