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Getting Your Superannuation In Order Before End Of Financial Year

June 5, 2019
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Getting Your Superannuation In Order

Most people associate the end of the 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 with getting your superannuation in order before end of financial year.

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 end of financial year. June 30th falls on a Sunday 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. 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 time frames 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 last year, and now allow most people, even those who aren’t self-employed, to claim a tax deduction for personal contributions. There are still limits to this process, and criteria that must be met to ensure tax deduction is viable (ie. remember to complete a ‘Notice of Intent’ form).

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 2018 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.

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 $52,687

If your income was under $52,687 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

Make a non-concessional super contribution of up to $3,000 to your spouses’ super and benefit from the tax offset of up to $540. Spouse eligibility rules apply, including the requirement that your spouses income must be less than $40,000.

Split Contributions Between Spouse

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 2017-18 contributions, with the same applying for 2018-19 after 30 June 2019.

Insurance Through Super

Legislation passed in February 2019 will result in members with inactive accounts losing any embedded insurance benefits from 1 July 2019. This was part of a range of measures designed to protect members of superannuation funds from the erosion of the benefits.  To maintain this insurance cover you will need to either make a super contribution to your account within a 12 month period or contact your fund and opt-in to continue this insurance cover.

Minimum pension payments

Clients who have account-based income streams must receive at least the minimum pension payment before the EOFY. However, a minimum payment does not need to be made if the account-based income stream is commenced between 1 June and 30 June.  Also, a pro-rata minimum payment is required if commenced between 1 July 2018 and 1 June 2019.

Lost And Unclaimed Superannuation

Unclaimed and lost superannuation is a significant issue, amounting to billions of dollars 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

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