Getting your superannuation sorted for 30 June 2017

Published on June 14, 2017 5:46 am, by

As 30th June draws near there are a couple of things you might want to think about with your superannuation.

People with income up to $51,021per year – get up to $500 extra superannuation this year

If you earn less than $51,021 per year and make non-concessional (after-tax) contributions you may be eligible to receive Government Co-contributions. The maximum contribution is $500 for someone that earns less than $36,021 and makes contributions of $1,000. The amount of the co-contribution reduces the more you earn up to $51,021.

If you earn up to $37,000 per year you may also be entitled to the Government Low Income Super Contribution. This is paid based on 15% of the concessional (or pre-tax) contributions you or your employer make to your superannuation fund.

Self-employed – your superannuation contributions may be a tax deduction

If you were self-employed during the 2016/17 year you may be entitled to a tax deduction for superannuation contributions you made for yourself. The deductions are based on the concessional contribution caps outlined below and there are some rules about what constitutes being self-employed which you should check on the ATO website or with your accountant or adviser.

The contributions need to be made on or before 30 June 2017 for them to be deductible – and its always wise to give yourself a bit of extra time to make sure the contribution is received by your superannuation fund on or before 30 June!

People looking to make significant contributions to their superannuation fund

The rules for non-concessional superannuation contributions (these are contributions made from money you have already paid tax on) change on 1st July 2017. Under the current rules, you can make a non-concessional contribution up to $180,000 each year and you can also use the “bring forward rules” to make a contribution of up to $540,000. From the 1st July 2017, the maximum non-concessional contribution will be $100,000 per year and if you use the “bring forward rule” you will be able to contribute up to $300,000. Non-concessional contributions will also be subject to the Eligibility Threshold of $1.6m from 1st July.

If you have been thinking about making a non-concessional contribution to super or you have investments outside super that you have been thinking of moving into your superannuation fund contact your financial adviser straight away, time is running out!

People with superannuation pensions or looking to start one

From 1st July 2017, there is a new limit of $1.6m on the balance you can transfer into a tax-free superannuation pension. Any amounts in excess of $1.6m must be transferred into a superannuation accumulation account (which is taxed at 15%) or withdrawn from the superannuation system. For pension accounts started before 1st July 2017 you must transfer any amount in excess of $1.6m into an accumulation account on or before 30th June 2017.

All superannuation fund members

The concessional contribution caps (these are amounts paid prior to paying tax on the money and include things like employer contributions) are also being reduced. Currently, these caps are $35,000 for those aged 49 and over and $30,000 for everyone else. From 1st July 2017, they will be $25,000 for everyone.

Here is a checklist of things to think about

  • If you earn up to $51,021 and make a non-concessional (after-tax) contribution you may receive Government co-contributions. If you earn up to $37,000 you may also receive the Government Low Income Superannuation Contribution
  • Think about whether you want to maximise your contributions this year and make the most of the current non-concessional (after-tax) contribution caps before they change on 1st July 2017
  • If you have more than $1.6m in a superannuation pension talk to your adviser or superannuation fund about transferring the amount in excess of $1.6m into an accumulation account on or before 30th June 2017
  • Check the value of your concessional contributions for the year to 30th June 2017 and think about whether you should contribute more, on or before 30th June 2017, to make full use of the available amount
  • Check your superannuation contribution arrangements and adjust them if necessary to avoid breaching the new concessional contribution cap of $25,000 that applies from 1st July 2017

This summary has been prepared by MoneyBrilliant Pty Ltd (AFSL 492711). The information in this summary is of a factual nature only. We are not suggesting or recommending that you take any particular course of action in relation to any financial product or service. It does not take into account your personal circumstances or objectives. If you need financial advice or taxation advice you should seek advice from a licensed financial adviser or tax agent. You may also be able to access additional information from the websites of the Australian Securities and Investment Commission (ASIC) or the Australian Taxation Office.

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Peter is the CEO of MoneyBrilliant. He has over 20 years experience in banking, insurance and accounting. Peter has three sons, ranging in age from 16 to 3, is a sport and fitness fanatic and a volunteer firefighter. He is passionate about improving people's lives through making financial services more accessible.

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