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Superannuation and life insurance

A lot of Australians are unaware of the fact that they probably have life insurance provided by their superannuation fund. Due to economies of scale, you are most likely getting a very good deal on your cover, and as such it pays to be aware of a few things that can impact your life insurance.

1. SMSFs need to consider the life insurance needs of their members. However, this does not necessarily mean that the SMSF needs to provide the insurance. A lot of SMSF trustees choose to keep some of their super invested in public funds in order to take advantage of the cheap life insurance.

2. You need to specify who you would like to receive your life insurance payout in the event that you pass away (you need to do the same for your superannuation). It pays to be aware that life insurance payouts to non-dependents tend to attract a hefty tax bill, whereas payouts to dependents are typically tax-free.

3. You can also access income protection insurance in your SMSF. Income protection insurance is especially important for people who have families or large debts (i.e. a mortgage).

Posted on 12 March '15 by , under Super.

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Amnesty means that 24,000 businesses own up to underpaying Aussies superannuation

An amnesty scheme which ended earlier this month has caused around 24,000 businesses to admit to underpayment of their worker's super. A total of 588 million dollars will be distributed to almost 400,00 individuals.

The scheme, which covered payments from the introduction of super in 1992, gave employers the opportunity to come clean without any consequences as long as they paid the unpaid super as well as 10% interest for every year the money was overdue.

The ATO will be directing its attention at any businesses that did not admit fault and these businesses will face severe penalties.

Many individuals are looking to access their superannuation early in order to have support during these times. Although there is criticism of early access to super, this facility has been helpful to many families to keep afloat.

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