Australia Migration, Immigration Australia, Migrating to Australia
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Migration Institute of Australia Member
Registration Number 1971 and 2748
Registered to Provide Migration Advice
MARN numbers:
0208366, 0426675, 0641256, 0742456 and 0640237
More info about Immigration Australia, Visa Australia
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Super for self-employed

Superannuation for self employed

Tax savings

There are tax savings on contributions made by self-employed people. There is a tax deduction for the first $3000 paid into a fund, and a 75% deduction for larger amounts up to certain limits, depending on your age:

  • if you are under 35 the limit is $12,651;
  • between 35 and 49 - it's $35,138; and
  • over 50 it's $87,141 (these figures are for 2002/2003 and are indexed annually).

Note. You cannot claim a deduction if you have income from employment and this is more than 10% of your total income.

Which fund is best?

You have a wide choice of possibilities:

  • insurance companies;
  • banks;
  • other financial institutions.

These are generally "public-offer" funds, which means they accept contributions from the public at large.

When you are choosing which fund to use, you should consider:

  • the administration fees;
  • the investment performance and the institution's reputation;
  • insurance cover options etc.

You can also do-it-yourself in a self-managed fund.

Can I get disability/death benefits?

You will need to get information about this from the fund, but in general you can pay an insurance premium to cover this. It should include benefits for total and temporary disability. Usually the premium is simply deducted from your account balance.

Can I choose the investments?

This is usually available in a public-offer fund, although changing investment strategies can involve an additional administrative charge.

Also your participation in this is usually limited. For example, you may be able to choose between stable investment or more risky international equities. The trustee makes the rest of the decisions.

My own fund?

You can set up your own fund, which is called a "self managed fund".

This fund must have fewer than five members (for example, a husband and wife and two children) and give control and responsibility for investment and administration to the members. It is regulated by the Tax Office. Note, the members must be trustees of the fund.

If for some reason, one of the members of the fund cannot be a trustee then, from July 1999 this fund will be called an "approved trustee funds with fewer than five members". This type of fund continues to be regulated by the Australian Prudential Regulation Authority but it does not have to comply with all the requirements of larger funds (for example, providing reports to members).

As a ball-park figure, experts suggest you should have a superannuation balance of al least $70,000 before setting up your own fund.

Make sure you get the advice of an accountant about this

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