Pension update In this Issue 2 Why is tax taken from your pension? 2 Accessing Pensioner Services Online 3 What happens to your pension when you die? 3 Do you need to change your address or bank details? 4 Give us your feedback 4 Useful contacts January 2015 / Issue 25 January 2015 pension increase Your pension is indexed twice a year on the first payday in January and July. There are two methods for indexing pensions and the method that applies to your pension depends on your age at the pension indexation date (either 1 January or 1 July). If you are under age 55 at the pension indexation date, your pension will continue to be indexed in line with upward movements in the Consumer Price Index (CPI). If you are 55 or over at the pension indexation date, your pension will be indexed in the same way as age and service pensions are indexed. Age and service pensions are indexed by the greater of the CPI and the Pensioner and Beneficiary Living Cost Index (LCI) measured against a floor percentage of Male Total Average Weekly Earnings (MTAWE). The Australian Bureau of Statistics (ABS) determines CPI and LCI and also measures and reports on MTAWE. If you were under age 55 at 1 July 2014, your gross pension will increase by 0.9%. If you were age 55 or over at the pension indexation date, your gross pension will increase by 0.9%. For more information about how your pension increase was calculated, including examples, please visit dfrdb.gov.au 2 Why is tax taken from your pension? Accessing Pensioner Services Online DFRDB pensions are considered income by the Australian Taxation Office (ATO) and therefore we’re required to deduct tax from your pension according to the relevant Pay As You Go (PAYG) taxation schedules. While you can call or email us for assistance, you may also choose to manage some of your requests online. Pensioner Services Online is available 24 hours a day from the comfort of your home. Through Pensioner Services Online you can: >> view your CPI letters and payment summaries – current and previous financial years are available >> view and change your contact details >> view and change your banking details >> view your fortnightly pension payments, including historical information. Any tax offsets you are eligible for will be taken into account each fortnight when calculating the amount of PAYG deductions from your pension payments, unless you have advised us that you wish to claim these offsets on an annual basis through your income tax return. The applicable tax offsets are based on the tax components that make up your pension and your age, these factors are outlined below: >> a tax free component consisting of member contributions paid to the scheme after 1 July 1983, may also include pre-1 July 1983 contributions. The tax free component of your pension will be taxed at 0%. >> a taxable untaxed component consisting of the employer financed component (employer contributions). If you are aged 55 to 59, the taxable untaxed component of your pension will be taxed at the Marginal Tax Rate. If you are over 60 the taxable untaxed component of your pension will be taxed at the Marginal Tax Rate, less a 10% tax offset. Note: A DFRDB entitlement may include a taxable taxed component if you are over 60 and this is taxed at 0%. If you think you should not be paying tax on your pension you will need to apply to the ATO for an assessment. You can do this by completing a PAYG income tax withholding variation (ITWV) form available at ato.gov.au and submitting it to the ATO. Once the ATO has provided you with an assessment, you can forward this information to us and we will apply any changes to your tax on the next available payday. Do you need Family Law information? If you are a pensioner who is in the process of divorce or separation, you can find some helpful information in the Family Law and splitting super booklet. If you would like to use Pensioner Services Online, simply call 1300 001 877 to receive an Access Number, once we have verified your identity. Thinking of getting back into the ADF? If you return to the Australian Defence Force (ADF) for a second or subsequent period of service, you must advise us before doing so. When you return to the ADF you are required to make an election about which superannuation scheme you wish to remain in, or join, for the period of service before you re-enter. There are various consequences depending on the election you make which are likely to impact you financially. If we do not receive your election before you re‑enter, you will automatically join MilitarySuper by default. Membership in MilitarySuper will then apply to all future re‑engagements and is final and irreversible. More information about your options can be found in the Resuming ADF full-time service (DF09B) factsheet which is available from the DFRDB website. Make your election online You can make your election quickly and easily using the online D100 form. Once you have submitted your election online, you will receive an email confirmation, confirming receipt. If you require information about your superannuation for Family Law purposes, you will need to complete the form Application for Superannuation Information (Form 6). Visit dfrdb.gov.au for more information. The booklet and the form are available at dfrdb.gov.au Cover photo: courtesy of the Department of Defence. 3 What happens to your pension when you die? Although it’s not a topic that is easy to discuss, it may assist your family if you are aware of what happens to your pension after you die, like finding out what benefits may be available to them. The following diagram shows you how you can prepare and what may happen to your pension. You may wish to show it to your family and discuss it with them. Your pension Your pension is only payable to you during your lifetime. Following your death, a reversionary benefit may be payable to your spouse and/or children.* What can you do now? What happens when you die? Talk to your family Spouse benefits It can be very helpful to your relatives if you discuss your pension and provide them with information to help them in the event of your death. You should also leave these instructions with your important documents. Your spouse may be eligible to receive a portion of your pension after your death. Your family should contact us as soon as possible Please let your family know they must contact us following your death so we can cease your pension and avoid any overpayments. By contacting us as soon as possible your family can also assist us to organise any spouse, child or orphan benefits that might be payable to them. Child or orphan benefits If you are survived by a child or orphan they may be eligible to receive a portion of your pension. Estate benefits Depending on the number of years your pension has been paid prior to your death and if there are no eligible dependants, a lump sum benefit may be payable to your estate. * Further information about eligible dependants can be obtained from the Dependant’s benefits (DB01) factsheet available at dfrdb.gov.au Family checklist When the time comes, the following checklist may help your family finalise your affairs: >> ensure DFRDB is notified of the death at the earliest opportunity >> gather important documents such as a Will, birth and marriage certificates and death certificate (when it becomes available) >> gather identity documents outlined in the benefit application form, noting that you can choose to have them verified electronically via the Document Verification System >> complete and submit the benefit application form relevant to your circumstances. Forms are available from the DFRDB website. Do you need to change your address or bank details? You can change your address or banking details through Pensioner Services Online or by contacting us via the contact details below. When changing your bank details please: >> quote your old bank details so we can verify your information >> do not close your existing bank account until your payments start going into your new account. Please ensure your address is up to date by 10 June 2015 in order to receive the July 2015 CPI package. 4 Department of Veterans’ Affairs information The Department of Veterans’ Affairs (DVA) has asked CSC to let pensioners know that DVA is responsible for providing compensation, rehabilitation, health and support services to veterans and their families. DVA has said that if you have served with the Australian Defence Force and have any injury or illness that may be related to your service, you should contact DVA as soon as possible. Lodging a claim early will allow for faster access to rehabilitation, health services, medical treatment, compensation, and other DVA support services. It is also important to note that DVA has advised it will pay for treatment for eligible veterans with diagnosed PTSD, anxiety or depression without the need to establish that his or her mental health condition is related to service. For more information about any aspect of this message, visit dva.gov.au or call 133 254 or 1800 555 254 from regional Australia. Give us your feedback We are committed to providing excellent customer service and value your feedback. We would like to know if you are happy with our service and if there is anything we can improve. You can provide your feedback by email at [email protected] or by phone on 1300 001 877. If you are not satisfied with the service provided, please contact us. A Customer Information Representative will be happy to discuss how we can best resolve your concerns. Useful contacts Australian Taxation Office (ATO) Web Personal tax Superannuation ato.gov.au 13 28 61 13 10 20 Defence Force Welfare Association (DFWA) Web Phone dfwa.org.au 02 6265 9530 Department of Human Services (DHS) Web Older Australians humanservices.gov.au 13 23 00 Department of Veterans’ Affairs (DVA) Web Phone dva.gov.au 13 32 54 Legacy Australia Web Phone legacy.com.au 1800 LEGACY (534 229) Returned Services League of Australia (RSL) Web Phone rsl.org.au 02 6248 7199 Superannuated Commonwealth Officers’ Association (SCOA) Web Phone scoa.asn.au 02 6286 7977 If you would like to make a formal complaint in regard to the service provided please contact our complaints officer on 1300 033 732 or via email at [email protected] Contact details Email: [email protected] Phone: 1300 001 877 Web: dfrdb.gov.au Fax: Overseas callers: Post: 02 6272 9616 +61 2 6272 9626 DFRDB GPO Box 2252 Canberra ACT 2601 Disclaimer Any financial product advice in this document is general advice only and has been prepared without taking account of your personal objectives, financial situation or needs. Before acting on any such general advice, you should consider the appropriateness of the advice, having regard to your own objectives, financial situation or needs. You may wish to consult a licensed financial advisor. Commonwealth Superannuation Corporation (CSC) ABN: 48 882 817 243 AFSL: 238069 RSEL: L0001397 Trustee of the Defence Force Retirement and Death Benefits Scheme (DFRDB Scheme) ABN: 39 798 362 763
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