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Low Income Superannuation Contribution (LISC)
What is the LISC?
LISC stands for Low Income Superannuation Contribution and is a Commonwealth Government super payment of up to $500 per financial year to help low income earners save for retirement.
The LISC is 15% of the concessional tax contributions you or your employer make to a taxed super fund if your adjusted total income is below $37,000. The maximum payment you can receive for a financial year is $500 and the minimum is $20. The payment goes into your super, it does not come to you.
From 1 July 2017, The LISC may be replaced with the Low Income Super Tax Offset and will remain at a maximum of $500 per year.
For further information you can go to the ATO website.
Why can't I receive the LISC in Triple S?
Triple S is an untaxed, or tax-deferred scheme so members are ineligible to receive the LISC payment for the employer and salary sacrifice contributions paid into Triple S. So that's why to receive the LISC you need to become a member of Super SA Select.
Triple S compared to Super SA Select
How is this fund different to Triple S?
Super SA Select is a taxed fund and Triple S is an untaxed, or tax-deferred scheme. For some members it can be an advantage to receive the LISC but for others the compounding effect of staying in a tax-deferred scheme may be an advantage. How do I figure it out? Read more and seek financial advice.
Does Super SA Select have the same features as Triple S?
Super SA Select and Triple S share many of the same features, such as the ability for members to salary sacrifice and make after-tax contributions. It must be remembered, however, that they have different rules, especially when it comes to insurance, preservation and taxation. This is why we recommend you read the Product Disclosure Statement and seek professional financial advice before making a decision.
Will I be losing out on anything by leaving Triple S?
It's not a question of losing out but of weighing up the two products and recognising which one is the best fit for your situation. The Super SA Select PDS and this website will help you with this. We also recommend you take advantage of the free information service provided by Super SA's Member Solutions. You should also consider getting professional financial advice.
If I join Super SA Select can I switch back to Triple S once my income exceeds $37,000?
No. Once you choose to become a member of Super SA Select that decision cannot be reversed (subject to the cooling off period). The only circumstance in which you could rejoin Triple S is if you cease SA public sector employment, withdraw your Super SA Select benefit and then recommence employment in the SA public sector.
Why will I still have a Triple S account even though I'm a member of Super SA Select?
When you become a member of Super SA Select you retain your existing account balance and insurance in Triple S. You can roll the account balance into Super SA Select. If you do this 15% tax will be deducted from the untaxed element. Your Triple S account will be maintained for insurance purposes even if you roll your funds out .
Once I become a Super SA Select member can I have my contributions directed to Triple S again?
No. As a member of Super SA Select all future member and employer contributions will be directed to Super SA Select.
Can I leave my existing balance in Triple S?
Yes. However once you elect to contribute to Super SA Select no further contributions can be paid into Triple S. You can roll your Triple S balance into Super SA Select at any time. If you do this 15% tax will be deducted from the untaxed element when received by Super SA Select.
Important considerations when making your decision
Should I just go ahead and join Super SA Select?
Not necessarily . . . for some Triple S members the compounding effect of being in a tax-deferred scheme may outweigh any gains offered by the new LISC. In a tax deferred scheme such as Triple S, all of the money your employer contributes to your super is invested - tax is only deducted when you leave the scheme. And more money is invested which means more returns.
On the other hand . . . some Triple S members may be better off joining Super SA Select and having their employer contributions directed into Super SA Select in order to receive the LISC payment.
Our research suggests that Super SA Select may be the preferred option for members who remain in public sector employment for less than seven years.
So you need to weigh up the two products and recognise which one is the best fit for your situation now and into the future.
Fees and Costs
How much will it cost to join Super SA Select?
No joining fees apply. Fees and charges applicable to Super SA Select are detailed in the PDS.
Do I have to pay an administration fee for my Triple S account as well as my Super SA Select account?
No. Administration fees for Triple S accounts held by Super SA Select members will be waived until 1 January 2016.
Am I entitled to insurance in Super SA Select?
Super SA Select does not offer insurance but you will maintain your Triple S insurance when you join Super SA Select.
How will my insurance premium be paid?
Funds will be transferred from your Super SA Select account into your Triple S account to meet the insurance costs within Triple S.
Super SA Select and tax
Will my Triple S balance be taxed if it is rolled over to Super SA Select?
Yes - 15% tax will be deducted from the untaxed element of the Triple S balance when it is received in Super SA Select. This is not additional tax but funds are taxed on entry in Super SA Select rather than on exit as in Triple S. If funds are withdrawn from Super SA Select before age 60 they may be subject to tax.
If I join Super SA Select do I need to roll out of Triple S?
No. You can choose to join Super SA Select now and leave your Triple S account balance in Triple S. Once you are a Super SA Select member you may choose to roll all your Triple S account balance into Super SA Select. If you do this 15% tax will be deducted from the untaxed element on entering Super SA Select. (NB. This doesn't mean that Triple S is not taxed, just taxed differently.)
How do join Super SA Select?
Simply download the Super SA Select Product Disclosure Statement (PDS). Inside you'll find the application form as well as essential information about Super SA Select. Alternatively you can call our Member Services Centre on 1300 369 315 and we'll send you the PDS.
If you decide you'd like to join Super SA Select complete the application form and return it to Super SA.