Superannuation for the self-employed
Superannuation can be a complex subject, but everyone agrees that the main aim is to help people save money throughout their working life to help fund their retirement years.
Most Australian workers have an automatic, compulsory scheme in place to ensure they’re building super savings—but not everyone qualifies.
If you’re a sole trader/self-employed, or in a partnership and not paying super for anyone else (superannuation is not compulsory), you need to put in some extra effort to get things rolling, although the tax-effective benefits of super savings are available to you.
The Association of Superannuation Funds of Australia (ASFA) states that around 19% of the self-employed have no super, compared with only 8% of employees. Those self-employed who do have super tend to have lower superannuation balances compared with wage and salary earners. However, it’s important to remember that super is a tax-effective way to save money for your retirement. Contributions you make into super for yourself are taxed at 15%, instead of your individual marginal tax rate (which can be much higher).
That’s where we can help. With a ‘Nationwide Super—Personal’ account, you can enjoy the benefits of being a Nationwide Super member, and make regular contributions to your superannuation account—but you just need to understand a few important differences.
- There will be no compulsory super contributions, known as the Superannuation Guarantee (SG) coming from an employer
- You must select an investment option when you join (there is no ‘default’ option)
- Different Death and Total and Permanent Disablement (TPD) insurance arrangements apply, including no ‘default’ cover.
(Please note this is not an exhaustive list).
Joining is simple!
The application form, Product Disclosure Statement, guides and a range of other important documents are available on the Forms page. Just make sure you complete the Nationwide Super – Personal Application Form attached to the PDS.
Managing your account
Once you’ve joined, you’ll also be able to manage your super account online with MemberAccess. Simply click this MemberAccess link and follow the Register Now instructions.
Taking control of your super savings includes making a decision about where your money is invested. At Nationwide Super, you have access to five types of investment options, with a total of 23 different options to choose from. Each option has its own investment objectives, strategies and level of expected risk and return.
You will need to make an investment choice at the time of joining Nationwide Super, and you can switch your options at any time using your MemberAccess account.
Visit our Investments pages for more information to help you determine which option/s may be right for your particular circumstances.
How can I grow my super?
If you are self-employed you can make non-concessional (personal) contributions to a super fund. There are limits on the amount you can contribute each year. You can generally claim up to 100% of any personal contributions you have made throughout the year as a deduction in your tax return.
Low or middle-income Australians who are self-employed may also be eligible to receive support from the Australian Government, to help save for their retirement. If you meet the income thresholds and make a personal contribution to your super fund, the government may make a contribution (called a co-contribution) up to a maximum amount of $500. In addition, if your income is below $37,000 a year, you could receive a refund of the tax paid on your personal deductible contributions, up to a maximum of $500, paid directly into your super account.
Insurance is not automatic or compulsory for our Nationwide Super – Personal account members. This means you will need to apply for insurance cover, which is paid for out of your account.
Types of cover
The types of cover available are Death and/or Total and Permanent Disablement (TPD) cover; and Income Protection cover.
- Death cover—pays a lump sum on your death or the diagnosis of a terminal illness.
- TPD cover—pays a lump sum if you become totally and permanently disabled and are unlikely to ever work again in a job which you are reasonably qualified for by education, training and experience. This cover carries a maximum limit of $5 million.
Death and TPD cover—available in multiples of $10,000 and is offered on a fixed basis, which means your level of cover remains fixed and your premium changes with your age.
The cost of your insurance cover will depend on the amount of cover you request, your gender, your age and occupational rating.
- Income Protection cover—provides a replacement income of up to 85% (including 10% contribution to super) of your income if you are unable to work due to illness or injury. Also known as ‘Salary Continuance Insurance’, it provides a monthly benefit for up to two years or to age 65, depending on your selection and offers various waiting periods to suit your needs.
The premium cost of Income Protection depends on your age, waiting period and benefit period selected, your gender and occupational rating.
Read our PDS and Guides for more details about the Nationwide Super – Personal product and your options.