INSIGHTS FROM INDUSTRY
DO YOU HAVE EMPLOYEES COMING BACK FROM RETIREMENT? WHAT YOU NEED TO KNOW ABOUT SUPERANNUATION
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ith the increasing pressure being put on our healthcare and aged care systems, we are seeing a significant rise in the number of retired nurses, personal care assistants and other frontline staff, returning to the workforce to help their community.
announced in the 2021 Federal budget is still awaiting legislation.
Supporting their return to work will be an important part of sustaining this vital workforce during challenging times, however you might not be entirely confident of your obligations to them.
Yes, depending on their age they may need to meet the work test—you can find more information on the work test here. Your employees should contact their superannuation fund or a financial advisor to understand their options.
To help you ensure your organisation complies with all relevant superannuation legislation, and to help you answer any questions staff may have, we’ve compiled the following FAQs. We’ve also created a handout for you to provide to your new employees, as a reminder of the top things they need to consider about their finances as they return to the workforce.
Does the employee need a Superannuation Accumulation Account? If the new employee does not have an accumulation account as they are in the Income Stream phase or they withdrew all of their super, you will need to check for a stapled account (post 1 November 2021). This is only required if they have not completed a ‘choice of fund’ form during onboarding. If they do not have a stapled account, the default process can be applied.
Can the employee take the 10 per cent Superannuation Guarantee as cash?
No, if they are earning more than $450 a month, you must pay them the 10 per cent Super Guarantee into an appropriate super fund. As of 1 July 2022, the $450 threshold will no longer apply, and all salary payments will attract Superannuation Guarantee payments. The change to the $450 threshold
Can the employee make extra contributions (salary sacrifice or voluntary contributions)?
Can the employee return to work if they have accessed their super already?
Yes, there are no restrictions for an individual to return to work, even if they have already accessed their superannuation and commenced an income stream. However, if they are under 65 years of age, future contributions to their superannuation accumulation account will be preserved until they retire again, or turn 65. See conditions of release here.
What happens to the employee’s Retirement Income Stream (RIS) if they return to work?
A RIS continues to be paid, adjusted or reduced, depending on the preference of the employee. It may be a good idea for an employee to seek financial advice when they return to the workforce, as their financial situation will have changed since their retirement.
When employees are setup with a new accumulation account, will they receive default insurance?
It is highly likely that employees will receive default insurance, depending on their age. Continued on page 66
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