What you need to know
With the increasing pressure being put on our health and education systems, we are seeing a significant rise in the number of retired nurses, teachers and other frontline staff, many of them our members, stepping up to help their community and return to the workforce.
These returning members are undertaking an incredibly valuable service, so we at VicSuper believe it is important that as they return to work, we do what we can to ensure their financial wellbeing is supported.
While many Australians continue to do some amount of work post retirement, we understand that many employers may not be 100% confident of their obligations to staff returning from retirement. To support you in ensuring your organisation complies with all relevant superannuation legislation, and to help you answer any questions staff may have, we’ve compiled the below FAQs.
We’ve also created the below flyer for you to provide to your returning staff, as a reminder of the top things they need to consider about their finances as they return to the workforce.
Does the employee need a Superannuation Accumulation Account?
Yes, all employees will need an accumulation account to direct the 10% SG contribution into. Some returning employees may have a Retirement Income Stream, however this cannot accept SG contributions, so they will need to create a new accumulation account.
What do I need to do if they don’t have a Superannuation Accumulation Account?
If the new employee does not have an accumulation account as they are in the Income Stream phase or they withdrew all of their super, you will need to check for a stapled account (post Nov 1). This is only required if they have not completed a “choice of fund” form during onboarding. If they do not have a stapled account, the default process can be applied.
Can the employee take the 10% SG as cash?No, if they are earning more than $450 a month, you must pay them the 10% Super Guarantee into an appropriate super fund. As of 01 July 2022, the $450 threshold will no longer apply and all salary payments will attract SG payments.
Can the employee make extra contributions (salary sacrifice or voluntary contributions)?Yes, depending on their age they may need to meet the work test – you can find more information on the work test on page 8 of the VicSuper member guide. Your employees should contact VicSuper for more information on their options and can access advice on these options free of charge.
Can the employee return to work if they have accessed their super already?Yes, there are no restrictions for an individual to return to work, even if they have already accessed their superannuation and commenced an income stream. However, if they are under 65 years of age, future contributions to their superannuation accumulation account will be preserved until they retire again, or turn 65. See conditions of release on page 11 of the VicSuper member guide.
What happens to the employee’s Retirement Income Stream (RIS) if they return to work?A RIS continues to be paid, adjusted, or reduced depending on the employees wishes. It may be a good idea for an employee to seek financial advice when they return to the workforce, as their financial situation will have changed.
When employees are setup with a new accumulation account, will they receive default Insurance?It is highly likely they will, depending on their age.
What happens to any Centrelink payments or concession cards an employee may currently receive?Centrelink income support payments, like the age pension, have an Asset and Income test applied to determine the amount of support. Concession cards may also be impacted. The employee will need to report any employment income they receive, and this may reduce their Centrelink payment. It may be a good idea for an employee to seek financial advice when they return to the workforce, as their financial situation will have changed.
Don't sit there wondering - our team members are here to help!