Super Reforms – What you need to know

 

Do you have salary sacrifice arrangements in place?

You only have a few months to contribute up to $30,000 in pre-tax contributions (or $35,000 if you are over 50). The Cap for pre-tax or Concessional Contributions will reduce to $25,000 for everyone from 1 July, 2017. Concessional Contributions include employer Super Guarantee Contributions as well as pre-tax personal deductible contributions. 

  1. To avoid penalties, you will need to review your salary sacrifice arrangements prior to June 30, 2017 and check that they are appropriate for the new caps that will be in place from 1 July, 2017.
  2. You may be able to claim your personal contributions as a tax deduction. From 1 July, 2017 it’s not just self-employed people who can claim a tax deduction. Personal Super contributions can also be claimed as a tax deduction. Personal contributions can be used to reach the $25,000 Concessional Contributions Cap.
  3. A Concessional Contribution catch up provision will also be introduced in 2019/20 for Super funds with an account balance of less than $500,000. This will allow you to carry forward any unused portions of pre-tax contribution allowances for up to five years, helping you to build your Super balance.

Concessional Contributions include your employer’s 9.5% contribution and contributions are taxed at 15% (or 30% for income earners with an income over $250,000 from 1 July 2017). If you exceed the Concessional Contributions cap, penalties will apply. All contributions to Super are preserved until you meet a condition of release, such as retirement.

We encourage you to seek professional financial advice to understand how the complexity of reforms may impact on your personal situation and to review appropriate options and strategies aligned to your financial goals.

If you would like advice on how the changes may affect your Superannuation and retirement planning, I encourage you to contact our office on 07 3720 1299 or email admin@wealthfundamentals.com.au so we can help you to make the most of your Super.

Lane Moses Pty Ltd ABN 56 092 186 117 trading as Wealth Fundamentals and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306 Australian Credit Licence No. 357306 trading as Fortnum Financial Advisers.
The information (including taxation) contained within this document does not consider your personal circumstances and is of a general nature only - unless otherwise stated. Wealth Fundamentals strongly suggests that you should not act on it without first obtaining professional advice specific to your circumstances. This information is based upon our understanding of legislation at the time of writing. Such legislation may be subject to change.
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