Australia’s Superannuation is awesome!You’re going to love it. It blows the US 401K out of the water.
So why do I say that? Employer contributions are compulsory. Not only are contributions compulsory but the percentage of each contribution is 9% your “ordinary time earnings”. That’s just crazy! I remember feeling so luck to have up to 3% matching back in the States. Read more about your employers contributions here.
If you are moving to Australia with a valid visa that allows you to work in Australia, you will automatically qualify for a superannuation fund. In fact, anyone between the ages 18 to 69 that gets paid more than $450 a month qualifies for a superannuation. That just blows my mind to think that back when I first started working I could have had started saving for my retirement without me actually doing anything. That 9% would have really added up by now!
The superannuation fund is similar to a 401K as far as restrictions go. For example, you cannot access your super fund until the age of 65 or you will be fined and the money you take out will be taxed. Don’t worry, if you worked in Australia as a temporary resident, you may be eligible to claim your super money after leaving Australia but you will have to pay tax on your super when you close the account.
Claiming Your Superannuation Once You Have Left Australia
Temporary residents can apply to have their supers paid out once they have left Australia permanently. It’s really not so hard to do but you will end up paying Australian tax on the bulk sum of your superannuation.
To receive your superannuation once you move back home you will first need to call your super fund while still in Australia and let them know you are moving back home. Most likely they will send you a form that will need to be filled out and sent back. Be sure that they have your US mailing address on record or whatever address you will be at once you have left Australia, even if it’s your mom’s address or a close friend. A PO Box will not work, it needs to be a residential address. You can always change it once you have a more permanent address. This is important as your check will be mailed out to whatever address they have on file.
It takes some time to receive you super and you need to be physically out of the country with your visa cancelled by DIAC. If you move before your visa has expired you can request DIAC to cancel your visa. There is a fee to have it cancelled though so you might want to keep some funds in an Australian back account and use that to pay for it or you can use a credit card. You will also need to get certified copies of all your entry and departure stamps for Australia in your passport.
To start the process you can fill out your DASP (Departing Australia Superannuation Payment) online. You DASP form then sits and waits to hear from DIAC that you have sent in your 1194 form cancelling your visa. DIAC lets the Australian Tax Office (ATO) know that you have left Australia and are not going to be paying taxes anymore. The ATO in turn sends the DASP form and your cancelled visa status to your super fund letting the them know it’s ok to release your funds.
If you are moving close to the day your visa expires then you can actually get away with doing nothing as once your visa has expired and if you have completed your DASP form online, the whole process mentioned above with be set in motion. Your super will then contact you either by email or phone and send out a check to your current address which hopefully you have changed to a current address back home.
This might not be the best option, kind of leaving things a little to open for my taste. A simply call to your super fund manager and they will walk you through what needs to be done. Don’t worry, they deal with this issue a lot and will break it down to easy to follow steps.
Can you keep your superannuation in Australia even if you don’t live there?
No you can’t. DIAC is very good at keeping the banking institutions up-to-date on your visa status.
Remember that UBank account with the killer interest rate I mentioned above? Yeah, you can’t keep that open either. Sorry. Once you start having “off shore accounts” you start living in a very sticky area that can lead to serious trouble with the IRS resulting in large fines. Besides Australia, will not allow you to have bank accounts unless you are a current resident with a valid visa.