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_samw2(Newbie)Newbie
1 Aug 2021

Hi

I was paid out my TPD into my super recently (last tax year). I decided to withdraw it from my super as a lump sum so my tax paid on it was reduced (I am under preservation age). I have done my tax return for it now and was overall taxed (on the taxable amount) about $28k.

my question is: is there generally a tax refund for this?

it would seem a little counter-productive if I end up owing the tax office more given the circumstances / reason of the payout.

note: I do not earn other income including centrelink disability. The only payment I receive is FTB A&B (& I am aware I will have to repay some money to them).

thanks kindly!

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KylieATO(Community Support)Community Support
5 Aug 2021

Hi @samw2,

Super payments have two components (tax-free and taxable). The taxable component has two elements (taxed and un-taxed).

The tax-free component will be tax free regardless of whether you're above or below preservation age, and that part of the payment doesn't need to be declared as taxable income in your tax return.

The maximum tax applied to the taxable component (the 'taxed' element) is 20% plus the Medicare levy which will make it 22%. Your super fund withholds this amount from your payment.

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Most helpful reply

KylieATO(Community Support)Community Support
5 Aug 2021

Hi @samw2,

Super payments have two components (tax-free and taxable). The taxable component has two elements (taxed and un-taxed).

The tax-free component will be tax free regardless of whether you're above or below preservation age, and that part of the payment doesn't need to be declared as taxable income in your tax return.

The maximum tax applied to the taxable component (the 'taxed' element) is 20% plus the Medicare levy which will make it 22%. Your super fund withholds this amount from your payment.

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