MLC Life Cover Super MLC Personal Protection Portfolio

Using yourinsurancePenalty tax on excessive contributionsIf you exceed the contribution limits, significant penaltytaxes may be charged by the Australian Taxation Office atthe rate of 31.5% for excessive concessional contributionsand 46.5% for excessive non-concessional contributions.Also, excess concessional contributions count towardsyour non-concessional contribution limit, so if you exceedboth limits then both lots of penalty tax may be charged. Ifyou are issued with a tax assessment from the AustralianTaxation Office you will need to pay the amount due to theAustralian Taxation Office within 21 days.It is your responsibility to pay the tax liability to theAustralian Taxation Office on time.How are LCS benefits taxed?Generally, any benefits received by you from age 60 orpaid to your dependents on your death are tax free. Taxmay be payable by you if you receive a benefit before age60 or payable by your beneficiary if a death benefit is paidto a non-dependant.Where required to by law, MLC will deduct any tax, duty,impost or the like from a benefit payment and forward it tothe relevant authority.Are benefit payments fromMLC Super Estate Optimiser taxed?Any tax that may apply to a death benefit payable tobeneficiaries depends on a number of factors such as theform of the benefit (lump sum or pension), timing and thedependency status of your beneficiaries. In general, if adeath benefit is paid as a lump sum to a tax dependant(which includes a Spouse, Minor Child and DependentChild) the full amount is tax free. If the death benefit isinstead paid as a pension to a tax dependant, the incomereceived from the pension will be tax free if either thedeceased or the recipient is aged 60 or over. Otherwise,the pension income payments will generally be taxed atthe recipient’s marginal rate less a 15% tax offset.Should you provide your Tax File Number?Yes. Whilst you’re not legally required to provide your TaxFile Number, if you do not provide your Tax File Numberyour application for LCS cannot be accepted. In the eventan LCS policy is issued and a Tax File Number is notprovided by you on request, MLC may cancel the policy.You should also be aware that:• MLC and the Trustee are authorised to collect yourTax File Number under the Superannuation Industry(Supervision) Act 1993.• It is not an offence to decline to notify MLC and theTrustee of your Tax File Number.• If you do not notify MLC and the Trustee of your Tax FileNumber, they may not be able to now or in the futurelocate or amalgamate and identify your benefits in orderto pay you any benefits.• MLC and the Trustee are allowed to use your TaxFile Number only for lawful purposes, in particularif paying out monies, identifying and amalgamatingsuperannuation benefits for surcharge purposesand for other approved purposes. The approvedpurposes and the consequences of not notifying a TaxFile Number may change in the future as a result oflegislative changes.• Your Tax File Number will be disclosed to theCommissioner of Taxation. Your Tax File Number willalso be passed to another superannuation provider ifyour benefits are being transferred, unless you informMLC and the Trustee in writing not to pass on your TaxFile Number. Your Tax File Number will not otherwise bedisclosed to any other person.As the tax rules for death benefits are complex, youshould seek professional tax advice about which option(lump sum or account-based pension) is preferable foryour beneficiaries.Page 62 MLC Life Cover Super and MLC Personal Protection Portfolio PDS