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Product

Spirit Super (Default B)

Past 5-year return
6.84

% p.a

FYTD return

0.67

% p.a

Company
Calc fees on 50k

$463

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2022 MyChoice Super
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Balanced (MySuper)

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Superannuation funds we compare at RateCity

Learn more about superannuation

Typically, superannuation funds have three types of insurance for members:

  • Death cover (also known as life insurance) – This pays a benefit to your beneficiaries when you die
  • Total and permanent disability (TPD) cover – This pays you a benefit if you become seriously disabled through illness or injury, and are unlikely to ever be able to work again
  • Income protection (IP) cover – This pays you an income stream for a specified period if you are unable to work due to temporary illness or disability.

Your income protection policy will outline how your insurance covers you. This is usually for a specified percentage of your current regular income (usually 75 per cent of your gross salary) and for a set length of time.

If you are unable to work because of illness or injury, you can make a claim and your income protection insurance will activate. There is normally a waiting period of 30 to 180 days before benefit payments begin, and payments are usually limited to a maximum of two years. After the waiting period, the policy will pay you the agreed amount either until you are able to return to work or for the specified period of time – whichever is sooner.

Who should get income protection insurance?

Income protection is particularly useful for households where one person provides the income. Obviously, if that person is temporarily out of action due to illness or disability, there will be financial strain as a result. This is especially so if you are paying off a mortgage or other significant loans.

Because everyone’s situation is different, it’s worthwhile comparing different types and/or levels of income protection insurance, and to work out your own needs, should you be unable to work for a while. For example, someone with a family and a mortgage will need more cover than a single person living alone.

Remember, too, that you can only insure your income from personal effort or employment. That means you can’t insure income from investments (e.g. shares, long term deposits). The policy will also not pay out for redundancy or unemployment.

Also, if you will have enough money to manage for a while without claiming on your insurance (for example you’ll receive sick pay from your employer), then you may be able to save on your income insurance premiums by choosing a longer waiting period before payments begin.

How much does it cost?

The cost of income insurance will vary, depending on a number of factors, such as:

  • Your age
  • Your job
  • The percentage of your income that you’d like to cover
  • Your choice of waiting period length
  • The illnesses and injuries you need covered
  • Your current health, weight and family medical history
  • Whether you smoke or have previously smoked

What are the pros and cons of income protection insurance through my super?

As with any type of insurance through your super fund, there are factors worth considering. Let’s look at a few:

Pros

  • Usually cheaper – Super funds purchase insurance policies in bulk, so they can offer better deals on premiums. This means that, even when money is tight, you can still get cover
  • Easier to manage – Premiums are deducted automatically
  • May not need a health check – Depending on the fund and the amount of cover you’re after

Cons

  • Limited cover – Not all types of insurance, or levels of cover, are offered
  • Not portable – If you move to another super fund or your employer's super contributions stop, your cover may stop without notice
  • Ends around retirement age – Insurance coverage through super often ends when you reach a certain age (usually 65 or 70), while external policies may cover you for longer.
  • Reduces your super balance – The cost of your insurance premiums are deducted from your super balance, reducing the money available for your retirement
  • Added complexity When you make a claim, you need to satisfy the trustee of the super fund as well as the fund’s insurer in order to receive a payout. In other words, the benefit is not paid directly to you, but to your fund, which then decides whether to release it to you.

You should compare the terms and conditions of the income protection policies on offer from your super fund with those available from outside insurers.

If you decide to obtain income protection insure, make sure you review your policy from time to time, to ensure that your premiums are competitively priced and that the cover you have is still appropriate. For example, you may want to increase your cover if:

  • You’re going to become a parent
  • Your partner stops working
  • You’re taking out a new mortgage

On the other hand, you might be in a position to decrease your level of cover if you start a new job and it comes with increased sick pay.

Frequently asked questions

What happens to my insurance cover if I change superannuation funds?

Some superannuation funds will allow you to transfer your insurance cover, without interruption, if you switch. However, others won’t. So it’s important you check before changing funds.

How do you get superannuation?

You’re automatically entitled to superannuation if:

  • You’re over 18 and earn more than $450 before tax in a calendar month
  • You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

How do you find superannuation?

Lost superannuation refers to savings in an account that you’ve forgotten about. This can happen if you’ve opened several different accounts over the years while moving from job to job.

You can use your MyGov account to see details of all your superannuation accounts, including any you might have forgotten. Alternatively, you can fill in a ‘Searching for lost super’ form and send it to the Australian Taxation Office, which will then search on your behalf.

How do you claim superannuation?

There are three different ways you can claim your superannuation:

  • Lump sum
  • Account-based pension
  • Part lump sum and part account-based pension

Two rules apply if you choose to receive an account-based pension, or income stream:

  • You must receive payments at least once per year
  • You must withdraw a minimum amount per year
    • Age 55-64 = 4%
    • Age 65-74 = 5%
    • Age 75-79 = 6%
    • Age 80-84 = 7%
    • Age 85-89 = 9%
    • Age 90-94 = 11%
    • Age 95+ = 14%

If you want to work out how long your account-based pension might last, click here to access ASIC’s account-based pension calculator.

Is superannuation paid on unused annual leave?

If your employment is terminated, superannuation will not be paid on unused annual leave.

Am I entitled to superannuation if I'm a part-time employee?

As a part-time employee, you’re entitled to superannuation if:

  • You’re over 18 and earn more than $450 before tax in a calendar month
  • You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

How can I increase my superannuation?

You can increase your superannuation through a ‘salary sacrifice’. This is where your employer takes part of your pre-tax salary and pays it directly into your superannuation account. Like regular superannuation contributions, salary sacrifices are taxed at 15 per cent when they are paid into the fund.

When did superannuation start in Australia?

Australia’s modern superannuation system – in which employers make compulsory contributions to their employees – started in 1992. However, before that, there were various restricted superannuation schemes applying to certain employees in certain industries. The very first superannuation scheme was introduced in the 19th century.

Can I choose a superannuation fund or does my employer choose one for me?

Most people can choose their own superannuation fund. However, you might not have this option if you are a member of certain defined benefit funds or covered by certain industrial agreements. If you don’t choose a superannuation fund, your employer will choose one for you.

What is the difference between accumulation and defined benefit funds?

A majority of Australians are in accumulation funds. These funds grow according to the amount of money invested and the return on that money.

A minority of Australians are in defined benefit funds – many of which are now closed to new members. These funds give payouts according to specific rules, such as how long the worker has been with their employer and their final salary before they retired.

Am I entitled to superannuation if I'm a contractor?

As a contractor, you’re entitled to superannuation if:

  • The contract is mainly for your labour
  • You’re over 18 and earn more than $450 before tax in a calendar month
  • You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

Please note that you’re entitled to superannuation even if you have an Australian business number (ABN).

How much extra superannuation can I add to my fund?

There is an annual limit of $25,000 for concessional contributions – that is, money paid by your employer and extra money you pay into your account through salary sacrificing. There is also a limit on non-concessional contributions. Australians aged between 65 and 74 have a limit of $100,000 per year. Australians aged under 65 have a limit of $300,000 every three years.

Who can open a superannuation account?

Superannuation accounts can be opened by Australians, permanent residents and temporary residents. You’re automatically entitled to superannuation if:

  • You’re over 18 and earn more than $450 before tax in a calendar month
  • You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

What are the age pension's age rules?

Australians must be aged at least 65 years and 6 months to access the age pension. This eligibility age is scheduled to increase according to the following schedule:

Date Eligibility age
1 July 2019 66 years
1 July 2021 66 years and 6 months
1 July 2023 67 years

Is superannuation paid on overtime?

As the Australian Taxation Office explains, there are times when superannuation is paid on overtime and times when it isn’t.

Here is the ATO’s summary:

Payment type Is superannuation paid?
Overtime hours – award stipulates ordinary hours to be worked and employee works additional hours for which they are paid overtime rates No
Overtime hours – agreement prevails over award No
Agreement supplanting award removes distinction between ordinary hours and other hours Yes – all hours worked
No ordinary hours of work stipulated Yes – all hours worked
Casual employee: shift loadings Yes
Casual employee: overtime payments No
Casual employee whose hours are paid at overtime rates due to a ‘bandwidth’ clause No
Piece-rates – no ordinary hours of work stipulated Yes
Overtime component of earnings based on hourly-driving-rate method stipulated in award No

Can my employer use money from my superannuation account?

No, your employer can’t touch the money that is paid into your superannuation account.

What are reportable employer superannuation contributions?

Reportable employer superannuation contributions are special contributions that an employer makes on top of the regular compulsory contributions. One example would be contributions made as part of a salary sacrifice arrangement.

What will the superannuation fund do with my money?

Your money will be invested in an investment option of your choosing.

What is a superannuation fund?

A superannuation fund is an institution that is legally allowed to hold and invest your superannuation. There are more than 200 different superannuation funds in Australia. They come in five different types:

  • Retail funds
  • Industry funds
  • Public sector funds
  • Corporate funds
  • Self-managed super funds

Retail funds are usually run by banks or investment companies.

Industry funds were originally designed for workers from a particular industry, but are now open to anyone.

Public sector funds were originally designed for people working for federal or state government departments. Most are still reserved for government employees.

Corporate funds are arranged by employers for their employees.

Self-managed super funds are private superannuation funds that allow people to directly invest their money.

What age can I withdraw my superannuation?

You can withdraw your superannuation (or at least some of it) when you reach ‘preservation age’. The preservation age is based on date of birth. Here are the six different categories:

Date of birth Preservation age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
From 1 July 1964 60

When you reach preservation age, you can withdraw all your superannuation if you’re retired. If you’re still working, you can begin a ‘transition to retirement’, which allows you to withdraw 10 per cent of their superannuation each financial year.

You can also withdraw all your superannuation once you reach 65 years.