Category Your Guide
June 13, 2020
Bankruptcy and Your Superannuation
Your superannuation is safe, it does not form part of your bankrupt estate
- Monies you have accumulated over time to your Regulated Superannuation Fund, Approved Deposit Fund or Exempt Public-Sector Superannuation Scheme are protected and not available to your bankruptcy.
- During the three years of bankruptcy, the Superannuation Guarantee money your employer pays to your Regulated Superannuation Fund is protected and does not form part of your bankruptcy.
- If you are a high-income earner and will have to pay income contributions during bankruptcy, the Superannuation Guarantee monies your employer pays to your superannuation fund is excluded from your income when working out the amount of income contributions you will be required to pay.
- If you are considering bankruptcy, it is important that you do not apply for access to funds from your Superannuation Fund prior to becoming bankrupt. Funds in your bank account when you become bankrupt will be lost to your bankrupt estate.
- If you are bankrupt and are retired, receiving a pension from your Superannuation Fund, your Superannuation remains safe. The only thing you need to be aware of is that if your pension exceeds the threshold amount for payment of income contributions to your bankrupt estate, you will have to pay those income contributions. It is worth noting that the bankruptcy threshold amount for income contributions is based on after tax dollars, but your pension will most likely be tax free – meaning that the bankruptcy threshold will apply to the pension amount you receive.
- If your Superannuation is with an Industry Fund, you do not need to do anything regarding your Superannuation when you become bankrupt.