Tax considerations

Understand the types of tax you need to pay on your Cbus Super Income Stream (SIS) account and the relevant rates.

Tax considerations

Tax considerations

Due to Media Super merging with Cbus, Media Super Pension accounts have closed and been moved to a Cbus Super Income Stream.

We appreciate change can bring uncertainty. Please be assured all practical pension product options were scrutinised for benefits and the need to act in the best financial interests of our members.

For members with an existing Media Super Pension account, your benefits have been transferred to a new Cbus Super Income Stream and will continue to provide you with a regular pension payment. You will also enjoy additional benefits, such as:

  • Fortnightly payments in addition to monthly, quarterly, half-yearly and yearly options
  • Additional flexibility on how payments are drawn down from investments
  • Retirement Spending Planner and Advice Services.

Named Money Magazine’s Best Pension Fund for 2022, you’re in great hands with Cbus.

The information on this web page relates to the Cbus Super Income Stream (SIS)

When starting a Cbus Fully Retired or Transition to Retirement (TTR) account, understanding the tax rules that apply is important and can help you maximise your retirement income. Tax is charged at a reduced rate (or concessionally) and different tax rules apply based on your age and the type of SIS account you have.

Your Fully Retired or TTR account balance is made up of two components – the taxable component and the tax-free component.

When you start a Fully Retired or TTR account, we calculate how much of your balance is taxable and how much is tax-free; this proportion is then applied to your income payments.

Investment returns

  • Tax is paid on the investment returns in a TTR account
  • Investment returns in a Fully Retired account are tax-free

Income payments

The amount of tax applied to Fully Retired or TTR account income payments is as follows:

Tax payable
Component of super benefitBelow Preservation AgePreservation Age to 59 (inclusive)Age 60 and over
TaxableTaxable at marginal tax rate#. A tax offset is available for certain disability benefits.Taxable at marginal tax rate# less 15% tax offset.Nil

Lump sum payments

The amount of tax applied if you make a lump sum withdrawal from a Fully Retired account is as follows:

Tax payable
Component of super benefitBelow Preservation AgePreservation Age to 59 (inclusive)Age 60 and over
TaxableThe lower of marginal tax rate and 20% + Medicare levyUp to the low-rate threshold zero tax and the balance taxed at 15%#^Nil

#Plus Medicare Levy

^The low-rate threshold is currently set at $225,000 for the 2021/22 financial year and indexed to Average Weekly Ordinary Time Earnings (AWOTE) in $5,000 amounts (rounded down). It includes the taxable component of all eligible lump sum payments made before you reach age 60, including payments paid to you in different financial years and from different super funds and/or income streams.

Note: Lump sum withdrawals aren’t generally allowed, unless you meet another condition of release that lets you access your benefits from the TTR account in cash.

Death benefits

In the event of your death, the balance of your account is paid to your beneficiary or estate. This payment is called a death benefit.

Lump sum death benefits are tax-free when paid to a tax dependant. The beneficiary must be considered a dependant at the time of your death to qualify.

The taxable component of a lump sum benefit paid to a non-dependant is taxed at a maximum of 15%, plus the Medicare Levy. Where the payment is made to your estate, any tax is dealt with by the estate, and no Medicare Levy is paid by the estate.

Who are tax dependants?

Tax dependants include

  • Spouse
  • Former spouse
  • Child under 18 years
  • Any other person with whom the deceased had an interdependent relationship at the time of death, or
  • Any other person who was financially dependent on the deceased at the time of death.