These days there are many Australian ex-pats living around the world and there is often confusion surrounding what happens to their super when they leave Australia.
Generally speaking, when a resident becomes an ex-pat there will be no impact on their Australian super – the monies can remain with their fund indefinitely. However, should the ex-pat also be a trustee of a self-managed super fund (SMSF), then care must be taken to ensure their move does not make the fund become a non-complying fund.
Temporary residents departing Australia
Temporary residents who have worked and earned super during their stay on a temporary visa may apply for early release of their super as a Departing Australia Superannuation Payment (DASP). There is a 6 month period from the date of departure or expiry of the visa in which the claim can be submitted else the super monies will be transferred to the Australian Taxation Office as unclaimed super money.
Permanent residents departing Australia
Australian citizens and permanent residents of Australia who have super balances must generally leave these monies in Australia, even if they are departing to be a resident in a foreign country. They continue to receive the same tax concessions and the same rules apply to their super monies as if they were still a resident, including the following:
- income tax rates of maximum 15% in accumulation phase and nil in pension phase (generally limited to $1.6m in pension)
- contribution rules such as the work test and contribution caps remain unchanged and continue to apply for both residents and non-residents, with the exception of SMSFs (see below)
- the rules for withdrawal of super also remains unchanged for both residents and non-residents – access to super can be when a member reaches their preservation age and retires, turns age 65, or under the Transition to Retirement rules whilst continuing to work
Please note, any income stream payments must be made to an Australian bank account.
Furthermore, should a non-resident hold life insurance within their super fund, it would be prudent to check if their departure will impact the validity of their policy.
Permanent residents departing Australia to New Zealand
Permanent residents of Australia moving to New Zealand can choose to either leave their super in Australia or transfer it to a New Zealand KiwiSaver scheme from a participating Australian super fund under the Trans-Tasman Retirement Savings Portability Scheme for Individuals.
Members of SMSFs departing Australia
SMSF members departing Australia permanently or for an extended period, may have significant impact on the fund itself. Careful consideration must be given to the funds ability to accept contributions, ongoing compliance and eligibility to receive tax concessions as a complying Australian super fund.
As each fund is unique in its individual circumstances, it would be prudent to seek specific advice to ensure a member’s permanent departure will not impact negatively on the fund.
When a resident of Australia permanently leaves the country to take up residency in a foreign country, generally the rules surrounding accessing super remains unchanged. However, there may be limited circumstances in which one can withdraw their super when they depart. As such, it would be prudent for members to check with all their super funds and inform them of their plans well in advance of their departure.