STUDENT GETS AN AUTOMATIC REFUND
Domenik is a university student and will earn $18,000 as a part-time retail shop assistant in the 2017-18 income year. He will get a superannuation guarantee contribution of $1710 (9.5% X $18,000).
As Domenik will earn below the tax-free threshold of $18,200 for that income year, he may not be required to submit an income tax return.
The ATO receives information about Domenik’s income and his employer’s superannuation contributions from his member contribution statement.
It is reasonably satisfied that Domenik is eligible for the low income superannuation tax offset and makes the payment of $256.50 to his super fund, in effect refunding the 15% contributions tax ($1710 x 0.15).
The offset will normally go into a super account but can be paid in other ways. For example, it can be paid to the individual if they have retired and have no eligible super account, or to the estate if they have passed away.