Element untaxed in the fund

Part of what is termed as the “taxable component” of a superannuation payout from July 2007.

From July 1, 2007, super lump-sum and pension payouts are made up of two components: a tax-free component and a taxable component. In short, whatever is not the tax-free component is the taxable component of the payout. (See Proportioning rule)

The taxable component of a super payout is divided into:

* Element taxed in the fund. These are super savings on which tax has already been paid in the fund. This element includes earnings of a super fund that have been taxed and contributions (such as salary- sacrificed contributions) which have been taxed on entering the funds.
* Element untaxed in the fund. No tax has been paid in the hands of the fund. It includes deductions received for life insurance coverage held through the fund and certain super savings from unfunded public-sector super schemes that have not been subject to earnings tax.
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