All taxable benefits from the Defence Force Retirement Benefit Fund comply with relevant taxation laws under the Superannuation General Provisions Act (as specified by the IRC).

Below are details about how and when taxes are applied to superannuation – both accumulation and defined benefit schemes.

Tax on payments

Not all of your retirement benefit is taxed. Tax will apply only to the:

  • government-funded part of the benefit
  • interest credited to your account.

Your 6% contributions are not taxed when you’re paid the retirement savings because these contributions have already been taxed.

Tax rates and conditions

Below are the tax rates and conditions for all authorised superannuation funds on payment of retirement savings:

Years that a member has contributed Tax rate
Less than 5 years Marginal tax rates
5 - 8 years 15%
9 - 14 years 8%
15 years or more 2%
7 years or more (and is aged 55 or more) 2%
Member is deceased or permanently disabled 2%

Tax on pensions

Under the Income Tax Act 1959,retirement pensions are defined as an income, so they are subject to salary and wages tax.