Tax-free component

From July 1, 2007, super lump-sum and pension payouts are made up of two components: a tax-free component and a taxable component. (See Proportioning rule)

The tax-free component comprises:

* Non-concessional contributions (equivalent to undeducted contributions) from July 1, 2007. No tax deductions had been claimed on these contributions and they were not included in the fund’s assessable income. These are mainly personal, after-tax contributions.
* The so-called “crystallised segment” fixed at June 30, 2007. It covers benefits related to pre-July 1983 service and undeducted contributions before July 2007.

The remaining amount of a superannuation payout is known as the taxable component.
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