Benefits

Debts affecting your benefit

Depending onyour situation, there are four types of debts that might affect your benefit.These are:

  • early release debt
  • surcharge debt
  • no TFN contributions tax debt
  • contributions arrears debt

Early release debt

In certain circumstances, members can gain early access to part of their benefit if they are experiencing severe financial hardship or need to apply on compassionate grounds.

The Trustee applies strict criteria, based on Commonwealth superannuation legislation, before approving requests for the early release of benefits. For full details on the early release of benefits, see STC Fact Sheet 2: Early release of superannuation benefit on grounds of severe financial hardship or STC Fact Sheet 6: Early release of superannuation benefits on compassionate grounds.

Any early release amount paid will create a corresponding debt account, which will be subject to interest applied at the Fund Earning Rate.

Surcharge debt

Until 30 June 2005, Commonwealth surcharge tax on notional employer contributions was payable by high-income earners where their annual taxable income plus reportable fringe benefits and employer superannuation contributions exceeded an annually adjusted income threshold.

You must still pay any surcharge debt that you have in respect of contributions made prior to 1 July 2005. You may make progressive payments to the debt account. Any debt account you have accrues interest on 30 June each year at the Commonwealth 10-year bond rate.

You can find further information about the superannuation surcharge in STC Fact Sheet 1: Information about the Commonwealth contributions surcharge.

No TFN contributions tax debt

If you have not provided us with your tax file number (TFN), Commonwealth legislation requires superannuation funds to pay additional income tax (34% on top of the 15% contributions tax already paid) on assessable contributions we receive from members who have not provided their TFN.

If additional tax has been paid in regards to your employer contributions, a no TFN contributions tax debt account balance will be shown on your annual statements. You may be able to have some of the amount reduced if you subsequently provide your TFN as the fund can recover any no TFN contributions tax paid in the three years prior to the TFN being provided. For more information in relation to taxation, please refer to STC Fact Sheet 3: Taxation.

If you are eligible to receive Additional Employer Contributions (AEC) and have not provided the Fund with your TFN the same taxation rules outlined above will apply. However, rather than creating a debt account your AEC account will be reduced on 30 June each year by the amount of applicable tax.

Contribution arrears debt

Contributions arrears can occur for a number of reasons, such as deferral of contributions during a period of leave without pay. Other reasons include a change in employment status (for example, going from part-time to full-time work) or a delay in your employer adjusting contribution deductions from your salary after a salary increase.

Interest is payable on arrears and is calculated at the scheme's Fund Earning Rate which is compounded annually. For more information, please refer to SSS Fact Sheet 22: Contribution arrears.