Depending on your individual situation, there are three types of debts that might affect your benefit:

  • Early release debt
  • Surcharge debt
  • No TFN contributions tax debt.

Early release debt

If some of your scheme benefit is released prior to retirement due to financial hardship or on compassionate grounds, it will create a corresponding debt account.

The balance of this account increases over time because interest is charged on the account at the Fund Earning Rate.

The balance of this debt account will be deducted from your full benefit entitlement when it is paid. If you defer your benefit, the debt will be deducted from the deferred benefit before it is deferred.

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 and STC Fact Sheet 6: Early release of a superannuation benefit on compassionate grounds.

Surcharge debt

Until 30 June 2005, members who were high income earners paid a Commonwealth surcharge tax if their annual taxable income plus reportable fringe benefits and employer superannuation contributions exceeded an annually adjusted income threshold.

The surcharge tax was abolished from 1 July 2005; surcharge tax is no longer payable on notional employer contributions made on or after this date.

However, you must still pay any surcharge debt you accrued in respect of contributions prior to 2005. This debt balance accrues interest each 30 June with the debt charged interest at the Commonwealth 10-year bond rate on that day.

For more information please refer to STC Fact Sheet 1: Information about the Commonwealth Contributions Surcharge.

No TFN contributions tax debt

If you have not provided us with your TFN, the Fund is liable to pay additional income tax (34% on top of the 15% contributions tax already paid) on assessable contributions (such as employer and salary sacrifice contributions) made on your behalf. Following recent changes to the State Authorities Superannuation Act 1987, the Trustee requires member benefits to be reduced by the no TFN contributions tax amount, to enable the Fund to recover the additional tax paid.

If you have a no TFN contributions tax debt amount showing on your Annual Benefit Statement, you may be able to have the amount reduced if you subsequently provide your TFN. This is because the Fund can recover any no TFN contributions tax paid in the three years prior to you providing your TFN.

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.

If you have not provided your TFN, you should consider doing so by contacting Customer Service.

For more information, please refer to STC Fact Sheet 3: Taxation.

In certain circumstances, members can gain early access to part of their benefits. Strict criteria, based on Commonwealth superannuation legislation, are applied by the Trustee before a request for the early release of benefits is approved.

This early release of benefits may be available to you on compassionate grounds for one of the following reasons:

  • to pay for medical treatment or medical transport
  • to make mortgage repayments to prevent the sale of your home
  • to pay for modifications to your home or car to accommodate your special needs or those of a dependant
  • to pay for expenses associated with palliative care for yourself or a dependant
  • to pay for death, funeral or burial expenses associated with a dependant.

To meet Commonwealth requirements, you are required to complete a statutory declaration to say that you do not have the financial capacity to meet the expenses that your application is based on.

For full details on the early release of benefits, see STC Fact Sheet 6: Early release of superannuation benefits on compassionate grounds.

Establishment of a debt account

Any early release amount paid will create a corresponding debt account which will have interest at the Fund Earning Rate applied to it. The balance of this debt account will be deducted from your full benefit entitlement when it is paid.

Your debt account and changes to it during the year will be shown on your Annual Statement.

Members can gain early access to part of their benefits if they are experiencing severe financial hardship. The Commonwealth superannuation legislation stipulates strict criteria which must be applied by the Trustee before a request for the early release of benefits can be approved.

These include:

  • Written evidence must be provided from Centrelink confirming the receipt of income support for a continuous period of six months, or a cumulative period of nine months after reaching age 55 and you are not gainfully employed at the time of the application.
  • The completion of a statutory document and additional evidence which supports your inability to meet reasonable and immediate family living expenses.

These requirements are included in STC Fact Sheet 2: Early release of superannuation benefit on grounds of severe financial hardship

Establishment of a debt account

Any early release amount paid will create a corresponding debt account which will have interest at the Fund Earning Rate applied to it. The balance of this debt account will be deducted from your full benefit entitlement when it is paid.

Your debt account and changes to it during the year will be shown on your Annual Statement.

How much can be released?

Under Commonwealth requirements, the maximum amount of a benefit that may be released is $10,000 (before-tax) in any 12 month period. The minimum amount that must be left in the scheme is $1,200, unless all of the benefit can be released.

In general, the before-tax amount released to you cannot exceed the value of your accrued withdrawal (resignation) benefit entitlement at the date of the release.

Aside from these limits, the amount that may be approved for release will be determined by the Trustee.