I’ve recently been medically retired at 52 years of age and due to illness likely to be successful in TPD claim through my industry super and therefore also gain access to my superannuation. Wondering what is the tax rate on super componnent? As I need $ to live thinking investing in property or stock market may be a preferred option to rolling over. I haven’t applied for Centrelink - single and currently surviving on limited but declining savings. Thanks J

Hi Jen,

Sorry to hear of your health.

You should get in front of an experienced financial adviser as there’s a few moving parts to get the best tax outcome for a TPD claim.

I’d then encourage you to consider using the super system as your vehicle for investing into the share or property markets to provide you an income.

Regards
James

Hi Jen,

The amount of tax payable will depend on a couple of different factors.
1. is the tax components of your existing superannuation
2. is the tax components of the TPD payout (this is calculated using a formula)
Then, how much you actually withdraw.

I would suggest that you are probably best of not withdrawing all of your super now just because you have access to it, because you may end up paying much more in tax than if you just withdraw what you need until you are 60.

You may also find you are better off rolling over the majority of your existing super balance before your TPD claim is paid, to keep those monies separate as they may end up with different amounts of tax free component and you may be best drawing from one over the other while you are under 55 and 60 years of age.

Also, maintaining in superannuation accumulation may provide better ongoing centrelink payments for you.

I would suggest seeking some advice and doing the calculations and go from there.

If you would like to discuss further, you can contact me at glenn@precisionwm.com.au or 1300 200 012.

Cheers

Glenn