Document ID: chunk:federal_register_of_legislation:F2024L00664:schedule:12:p5
Version: federal_register_of_legislation:F2024L00664
Segment Type: schedule
Provision Reference: sch 12 (pt 5/5)
Character Range: 241406–243642

from an untaxed element.

Chloe is 62 years of age and a member of AAFund super fund. She has decided to retire and take some of her super as a lump sum. As Chloe is over 60 years of age, she is over the preservation age.

According to her entitlements, Chloe will receive a super lump sum of $300,000 from AAFund. The super lump sum has a tax-free component of $30,000 and a taxable component of $270,000. Chloe has previously provided her TFN to AAFund.

AAFund does not withhold from the tax-free component of $30,000 but must withhold an amount from the taxable component of $270,000. The taxable component of the super lump sum paid by AAFuan comprises of a taxed element of $190,000 and untaxed element of $80,000.

Amount to withhold:
    1. Amount up to untaxed plan cap = $1,780,000 (2024-25 income year cap amount)
    2. Super lump sum taxable component = $270,000 ($300,000 − $30,000)
    3. Untaxed element of taxable component = $80,000 ($270,000 - $190,000)
    4. Amount to withhold from $300,000 = $13,600 (17% of $80,000)

Note: The untaxed plan cap is indexed annually.

Preservation age

The withholding amount varies depending on whether the payee has reached their preservation age when the payment is made.

Preservation age is determined using your payee's date of birth. For example, if a member was born on 1 October 1964, they reach their preservation age of 60 on 1 October 2024.

The table below outlines the transitional period where the preservation age increased progressively from 55 to 60. As the transitional period has been completed, for the 2024-25 and future income years the preservation age is 60 for all payees born after 30 June 1964. For those payees born before that date, they have already reached their preservation age.

Preservation age
Date of birth       Preservation age
Before 1/7/1960     55
1/7/1960–30/6/1961  56
1/7/1961–30/6/1962  57
1/7/1962–30/6/1963  58
1/7/1963–30/6/1964  59
After 30/6/1964     60

Payment summaries

You must provide a PAYG payment summary – superannuation lump sum to the recipient of the super lump sum within 14 days of making a lump sum payment.

Payment summaries can also be printed using software that conforms to ATO reporting specifications.