Allied Health Podcast Series 1 Episode 12

Superannuation – All you need to know as a Therapy Graduate

In Episode 12, Clare runs you through the basics of Superannuation.

Speaker You’re listening to Allied Health Podcast, talking all things Allied Health with your hosts, Danielle Weedon, physiotherapist, and Clare Jones, occupational therapist.

Clare Jones Welcome back to Allied Health Podcast. This is a really short episode on superannuation. Super is often something it doesn’t seem important as a graduate or early on in your career. However, making the right decision about super at this time can mean a lot more money when you retire. So what exactly is super? Superannuation is money that’s put aside by your employer over your working life for you to live on when you retire. Super is important for the simple reason that the more you save, the more money you’ll have for your retirement. So how much super will you earn? The minimum amount of super an employer must pay is currently 10 per cent of your salary. This is known as the superannuation guarantee or SG for short. Where is your superannuation held? Commonly, your super is held with a superannuation fund and the money is paid directly to the super fund by your employer. Super funds pool your money with other members’ money and invest it for you, with the aim of increasing the amount of money you have held in super. It’s up to you to choose your super fund. In the past, employers determined to fund your super was paid into, but this is no longer the case. So you choose your super fund. You’ve received a job offer. How much superannuation will you be paid? When you’re presented with an offer for a new job, it’s important that you establish the base salary component of the offer separate from the superannuation component. An offer of $70,000, including super, is very different to an offer of $70,000 plus super. If you’re being paid $70,000, including super, you will receive a base salary of $63,636 a year, and $6,363 will be paid into your super account. Whereas if you’re being paid $70,000 plus super, you receive $70,000 a year in salary and $7,000 will be paid into your super account. So just be mindful of this when you’re dissecting out an offer. What should you look for in a super fund? There are a number of things to look for in a super fund, but to keep it simple, I’m going to limit it to three. Performance, insurances, and fees. Let’s start with performance. Some super funds perform better than others, so it’s important to choose a high performing fund. 10 per cent of your salary may not seem like a lot of money now, but if you work for, say, 30 or 40 years, this money really adds up. And if it’s invested well by a super fund, you’ll see a greater return on your money when you retire. All superannuation funds are now required to undergo an annual performance test to determine which funds are not performing well. Performance test results can be found on the APRA website. That’s APRA, and it stands for Australian Prudential Regulation Authority. So before choosing a fund, check out these results to avoid joining a fund that’s not performing well. On to insurances. Superannuation funds can offer three types of insurances, and they’re all life insurances, so there’s life cover, also known as death cover. This pays either a lump sum or an income stream to your beneficiaries if you die or have a terminal illness. TPD Insurance, which stands for total permanent disability insurance. TPD insurance pays your benefit if you become significantly disabled and are likely not to work again. And income protection, in the event that you can’t work due to temporary disability or illness, this insurance will pay you a regular income for a specified period. All three of these insurances are really important, so it’s highly recommended that you research what insurances are on offer when choosing a super fund. And finally, fees. Look at the fees a super fund is charging you to administer your super account, as fees can differ significantly. And again, keep in mind that over 30 to 40 years, fees can really add up. So that’s a wrap for super. As always, if you have any questions, please don’t hesitate to get in touch and thanks for listening.

Speaker We hope you enjoyed listening to the Allied Health Podcast. In the show’s notes you’ll find links to our free recruitment resources, job opportunities and health care marketplace insights. To listen to new episodes, please subscribe via Apple, Google or wherever you find your favourite podcasts and if you’ve enjoyed the show, please give it a five star rating and review. And be sure to tell your therapy colleagues and friends to tune in.