Mercy Super - Always for you

What is the flood levy?

 

For the 2011-12 year only, the Federal Government has introduced a Temporary Flood and Cyclone Reconstruction Levy (flood levy) applying to taxable income.  The flood levy is designed to assist affected communities recover from the recent floods by providing additional funding to rebuild essential infrastructure.

 

The flood levy will be payable by individual taxpayers who have a taxable income over $50,000 in the 2011-12 financial year. If you earn PAYG salary and income, the levy will automatically be included in the tax taken out of your salary and wages by your employer. Some lump sum superannuation payments and superannuation income stream payments will also be subject to the flood levy tax.

 

You are exempt from the flood levy if you have been affected by a declared natural disaster that occurred during 2010-11 and are in receipt of an Australian Government Disaster Recovery Payment from Centrelink.

 

For superannuation purposes, if in 2011/12, you claim a lump sum payment with a taxable component of more than $50,000 from your Mercy Super account, or are in receipt of a pension payment with a taxable component over $50,000 whilst you are between preservation age and age 60, we will deduct the flood levy tax from your benefit regardless of whether you may be exempt.  The flood levy tax is payable after all other taxes (if applicable) have been deducted from your account. If you are exempt, you will be eligible to re-claim the flood levy when you lodge your income tax return for the 2012 financial year.

 

How much will you pay?

 

Taxable income	Flood levy on this income
$0 to $50,000	Nil
$50,001 to $100,000	Half a cent for each $1 over $50,000
Over $100,000	$250 plus 1c for each $1 over $100,000

 

Which lump sum superannuation payments are affected?

The flood levy applies to all taxable income. However, superannuation benefits paid to a member over age 60 will not have the flood levy applied.  It will only apply to superannuation benefits with a taxable component of more than $50,000, paid to members under the age of 60.

The following lump sum benefit payments with a taxable component of $50,000 or more will be affected by the flood levy:

• Specified compassionate grounds
• Financial hardship
• Retirement (age 55 - 59)
• Disability payments
• Death payments to non-dependants

 

Lump sum benefit payments that are exempt from the flood levy:

• Retirement (age 60 and over)
• Death benefits to Estates and financial dependants
• Terminal illness benefits
• Departing Australia Superannuation Payments (DASP)

 

How will pension members be affected?

Pension members aged between 55 - 59 years will be liable to pay the flood levy in the following circumstances:

 

• On receipt of regular income stream payments where the taxable component for the year is more than $50,000
• On lump sum benefit withdrawals where the taxable component is more than $50,000

 

Pension members aged 60 and over will not be affected by the flood levy.

 

Please contact Mercy Super on 1300 368 891 if you have any questions in relation to the flood levy.