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Re: DASP with 457 after WHV

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Hello,

 

I came to Australia on a Working Holiday Visa, but am now on a 457. I currently have no plans to leave Australia, but am considering what would happen if I ever do. I have recently learned that my entire super would be taxed at 65%, even though the majority was earned on the 457 instead of the WHV. (As discussed here). (1) Is this information correct? Would my entire super get taxed at 65% instead of otherwise 35% just because I came here on a WHV initially?

 

Obviously, that is a very messed up system. It is unfair and makes no sense in any shape or form! But I what I am wondering is how I best deal with this issue. Unfortunately, I can't find the link I had anymore, but I read information that said this applies to the whole DASP payment when any amount in the super fund was earned while on a WHV. I further found out that one can make seperate DASP claims for seperate super funds. 

So my idea is now, whether I should open a new super fund, that I do not consolidate with my existing one. The second one would only receive contributions from now(457) onwards and would therefore not be "contaminated".

Is that a good idea? (2) Will DASP payments from a second super fund, that only contains 457 contributions, only be taxed with 35% even though I have a second super with contributions attributable to the WHV? Will I still be able to make a second indepent DASP for the first super (then with 65% unfortunately) and get both paid out seperately? Would these super accounts need to be with different fund companies or is it sufficient that they are two seperate accounts?

 

I would appreciate any input on how to save tax in my situation. Please note that I do not consider any part of this plan tax evasion as I am merely trying to be taxed the same rate as everybody else!

 

Thank you,

Max

 

 

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Devotee

Replies 8

Hi @max_fourth_try 

 

Without being able to give you any specific advice, I think you've got your head around the principles:

  1. A super provider will pay a DASP from a super account
  2. If a super account has received any WHM contributions then the entire DASP payment will be taxed at 65%
  3. If a super account has never received any WHM contributions then the DASP payment can be taxed at 35%

I'd suggest talking to your super fund about the way they would approach your situation because they're ultimately the entity that will pay you a DASP payment and you'll want to understand their approach and policies.

 

Here's a couple of links to information on the ATO website:

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

 

9 REPLIES 9
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Best answer

Devotee

Replies 8

Hi @max_fourth_try 

 

Without being able to give you any specific advice, I think you've got your head around the principles:

  1. A super provider will pay a DASP from a super account
  2. If a super account has received any WHM contributions then the entire DASP payment will be taxed at 65%
  3. If a super account has never received any WHM contributions then the DASP payment can be taxed at 35%

I'd suggest talking to your super fund about the way they would approach your situation because they're ultimately the entity that will pay you a DASP payment and you'll want to understand their approach and policies.

 

Here's a couple of links to information on the ATO website:

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

 

Newbie

Replies 7

Hi @JamesF 

 

thanks for your super quick response!

To me it sounds like you're agreeing with me, but hesitate to give advice as to what to do with my super for legal reasons.

 

It might be overkill, but given these circumstances, I would probably prefer having two seperate super accounts at two different fund companies. As you said it depends on their "policies" on how to handle this. But who knows, what if they change their policies in a few years and then that change costs me thousands of dollars. I will nonetheless get in contact with my current super provider to see what their take is on all of that.

 

One last thing question: (3) Can you confirm that at the moment, if an individual has two super funds with different companies, that would result in two seperate DASP payments? Or would these two funds have to coorperate so there is only one DASP per person?

I realise that the actual DASP is not an ATO issue, but you guys obviously process them for tax purposes. So, without giving legal advise, I would basically just like to know if you currently observe people getting seperate payments.

 

I will also contact Immigration to see if they can at least have some sort of notice to people. I find the whole situation to be really messed up. It might be difficult to get that fixed, but at the very least there should be some sort of notice to this legislation when people switch from a WHV to other visas. They would have a list of people who are affected.

 

Thanks,

Max

Devotee

Replies 6

Hi @max_fourth_try 

 

I can appreciate how anxious you might feel about this and super funds are the best place to start to ensure you understand how DASP could apply to the super savings they manage for you.

 

Here's a couple of answers to your questions direct from the ATO website:

  1. On the ATO website page "DASP for working holiday makers" there's a section with the subheading "DASP tax for WHMs" and the first sentance says: "The DASP tax rate will be determined by each super fund individually, as each super fund is making a separate payment."
  2. The ATO website page "DASP and working holiday maker changes – frequently asked questions" is a page aimed at giving general advice to APRA funds and it includes the question "If an applicant has three accounts in a fund, will the fund pay one DASP to the applicant or one fro..." and the answer is "This depends on how the fund usually makes DASP payments. If your fund normally makes one payment then the taxed and untaxed elements of that payment will be taxed at 65%. If your fund pays a DASP from each account then only the payment from the account containing amounts attributable to super contributions made while the applicant was a WHM will be taxed at 65%."

 

Out of curiosity I just had a look at the Dept. Immigration website and searched for "superannuation" to get a sense of what they say and they have this page "Before and after you leave Australia" that talks about accessing super after you leave Australia. I wasn't suprised that they didn't talk about tax but they do link to this page on the ATO website about DASP.

 

Hope this helps

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

Initiate

Replies 5

Hello James

 

Thanks for your reply. After few emails and calls to the ATO, it's seems to be still a really confusing matters for all the parties involve.

 

For my case : I have opened a second superaccount and did a partial roll over of all the money not earn under my WHV. so now i have 2 SUPERaccount, one with the money earn in WHV and another one with all the money earn while in sponsorship. so a clear seperation on this.
I have explain it to both my super account team so they would be aware of it.

 

The question is : should I do 2 seperates DASP form when I leave australia ? to avoid confusion with the superaccount I would rather play safe ...

 

Let me know what you think on this.

 

thank you again for your help

 

Adeline

Devotee

Replies 4

Hi @adelinejeancler 

 

I know this is confusing and I'm sorry you'r having a hard time getting anything definitive.

 

From what I understand you can only complete one DASP form for each super fund where you have an interest. If you have one fund with two accounts then the fund might make one or two DASP payments, depending on their processes, but for each payment your super fund will determine whether any of the DASP payment includes "amounts attributable to" superannuation contributions made under a WHM visa when they decide which tax rate to apply. Ultimately you really need to discuss these processes with your super fund because you'll send them the DASP form (or forms) and they'll make the DASP payment (or payments) and determine which tax rate (or rates) apply. 

 

Just one thing to consider - you said you "did a partial roll over of all the money not earn under my WHV" but you really can't pick and choose which components of your interest you want to transfer when you do a rollover. You can't just tell your fund to "only transfer all contributions of this kind made from this date and none of the earnings that might be attributable to any of these types of contributions". Unfortunately it just doesn't work that way.

 

When you rollover a part of an interest to another account/fund, you're fund will transfer a proportion of your entire interest and this proportion represents a bit of everything you currently have. Consequently, after the rollover you'll have two accounts, each with the same proportions of this and that as the original interest before it was split. This is mandatory for rollovers in terms of the taxable and non-taxable components of your rollover benefit, so it would seem reasonable to me that a super fund would take the same approach in determining the proportions of the interest "attributable to" certain types of contributions.

 

For example: If your original interest is $20,000 and made up of 50% WHM contributions, 50% post WHM contributions then if you transfer $10,000 your fund might consider that $5000 is "attributable to" WHM contributions and $5000 is "attributable to" post WHM contributions. In otherwords, they'll see the rollover as taking a part of one interest and moving it over to a new account in exactly the same proportions as the original account.

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

 

Initiate

Replies 3

Thank you for your fast reply.

 

''Ultimately you really need to discuss these processes with your super fund because you'll send them the DASP form (or forms) and they'll make the DASP payment (or payments) and determine which tax rate (or rates) apply. ''

 

I just talked to the super founds and they advised they will only go with the visa information given by the ATO once DASP form received.

and ATO only says that we ever held a WHV , not the time we hold it or our current visa situation.

 

So even with my found split, I will be taxed 65% because the ATO informations given to the super found will tell them that I had a whv so i need to be taxed 65%. so I'm not sure what can be done at this stage then?

how can ATO tell the superfound we hold many different visa and only 1 year is WHV and not the 6 other years spent in this country and contributing to our super.

 

even with the proof, the visa details/statement , the superfounds will always follow ATO information.

is there any way we can have this process smoother and more understanable between everyone?

 

thanks for your help

 

 

 

 

Devotee

Replies 2

Hi @adelinejeancler 

 

I'm sorry this is such a frustrating process.

 

Just a couple of comments about "ATO only says that we ever held a WHV , not the time we hold it or our current visa situation"

 

The ATO really only facilitates the DASP application process, including checking your immigration, visa and residency status with the Department of Home Affairs (Home Affairs) and providing this information to your super fund if you use the DASP online application system. I'm not an expert on the information Home Affairs maintains about visas, but I would have thought it would include the date each visa was effective from/until. It might be worth checking with them to see what information they hold and whether you can add from/to dates to your visa information if it's missing.

 

If you use a paper form for your DASP claim then you can apply to Home Affairs to issue a Certification of Immigration Status to your super fund which will include WHM visa information. In the paper DASP form you're able to provide the details of all visas you've held while working in Australia, including the date each visa was effective from/until.

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

 

Initiate

Replies 1

Thanks James once again for taking the time to reply to our numerous questions.

I tried to reach out to home affaires, but since it's an internal process they would not share any details.

So back to starting point I guess...

 

If you were us, how would you approache this situation, and how can we make it easy for everyone ?

do we have an expert at the ATO we could reach out that is familiar with this new reglementation and how we should process ?

 

Living in Australia for the past 6 years and just because i worked few months in WHV will cost 65% of my super.

i still have few months left and i really try to understand how i can make sure to be tax correctly. Since the super company just says they follow ATO and once you are saying we held a WHV they cant do anything about it since they dont see any date or current other visa. just the information we held a WHV

 

We are lot of people affected and we all try to understand to best way to approache this.

 

thanks again for your time 

 

Devotee

Replies 0

Hi @adelinejeancler 

 

I'm sorry you haven't been able to get anything really concrete about your situation. Contacting the ATO in writing about your specific situation is the best way to get in touch with an expert on a particular topic and I noticed that there's a page on the ATO website about contacting us for help with the DASP online system, which includes an email address you can use to get in touch.

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

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