10 Tips for Getting Your Superannuation in Order Before EOFY

Most people associate end of financial year (EOFY) with getting their taxation in order, when in fact there are many components relating to superannuation that are just as important to address at this time of year. Factors such as contributions, the repercussions of income thresholds, incentives, and tax offsets, and ensuring your beneficiaries are up to date, all come into play. We’ve put together some basic need-to-know information, and with EOFY vastly approaching, we recommend checking in with these factors now rather than at the final hour.

Additional Superannuation Contributions

If you intend on making additional contributions to your super in this financial year, be sure to do so well and truly before the end of financial year. June 30^th falls on a Saturday this year, so make sure you make these contributions well and truly in advance to ensure your super fund receives them before the new financial year commences. Keep in mind electronic funds transfer and/or BPAY can take a number of days to appear in your super account. 

Concessional Contributions

Bear in mind that the maximum concessional contributions that can be made in this financial year is $25,000 – this figure is less than last financial year’s. Concessional contributions include those made by an employer, such as the 9.5% superannuation guarantee, salary sacrifice as well as personal deductible contributions. There are instances where concessional or non-concessional contributions to super exceeds the applied limits, in which case the Australian Taxation Office will issue an excess contribution determination. In the instance that this happens, please contact Inovayt immediately so that we can assist you to address this – there are strict timeframes around doing so and adhering to these will help to minimise penalties applied.

Personal Tax Contributions

The rules surrounding personal tax-deductible contributions have changed recently, and now allow most people, even those who aren’t self-employed, to claim a tax deduction for the personal contributions. There are still limits to this process, and criteria that must be met to ensure tax deduction is viable.

Non-concessional Contributions

This financial year’s maximum contribution amount is $100,000 or up to $300,000 when the three-year bring forward rule is applied. These non-concessional contributions are made from after-tax income or from other savings. With that in mind, if your total superannuation balance as of 30 June 2017 exceeded $1.6m, then you are not permitted to make non-concessional contributions. If your balance was under $1.6m but over $1.4m then the maximum amount under the three-year rule is scaled back. Further, if contributions were made that exceeded $180,000 in the financial years 2015-16 and 2016-17, then the amount you can contribute in the current financial year is reduced.

First Home Super Saver Scheme

If you’re planning on buying your first home, then any voluntary contributions made to your super since 1 July 2017 may go towards this under the First Home Super Saver Scheme.

Income under $51,813

If your income was under $51,813 for this financial year, you derive a minimum of 10% of your income from self-employment or employment, as well as make a personal concessional contribution to your super; you may be eligible for a Government co-contribution of up to $500.

Spouse Contribution Tax Offset

The income limits regarding spouse contributions have been increased, allowing more people to benefit from the tax offset of up to $540 in the instance that they have contributed to their spouse’s super.

Split Contributions Between Spouses

Split contributions between spouses are a good way to equalise super, particularly in light of limitations with super in conjunction with a pension. At present, splits can be made in the following financial year, meaning it’s currently not too late to transfer 2016-17 contributions, with the same applying for 2017-18 after 30 June 2018.

Lost and Unclaimed Superannuation

Unclaimed and lost superannuation is a significant issue, amounting to billions of dollars of which the Australian Taxation Office can hold at any one time. Contact us if you suspect you have lost superannuation and we can assist you in tracking it down and rolling it over.

Death Benefit Nominations

Reviewing your super is a good opportunity to ensure your nominated beneficiaries are relevant and accurate. Remember, your superannuation doesn’t default to your estate in the event that you pass away. You may also want to reconsider any nomination of a child who is no longer a financial dependant as there are significant tax implications for superannuation death benefits paid to non-financial dependants. Should you require more information or clarity on any of these topics, please contact us today on 1300 354 355.