Legislation changes for super accounts
The amount of money that we can add to your super before-tax will reduce (concessional contributions cap)
The maximum amount you can add to your super before-tax in any one year is $25,000 for all individuals for the 2017-18 financial year (the work test may apply for those between age 65 and 75). Previously the cap was $35,000 for people aged 50 years and older, and $30,000 for everyone else.
If you exceed the $25,000 cap after 1 July 2017, any excess contributions will be taxed at your marginal rate and subject to a late tax payment charge. You will have the option to pay any additional tax from your super account, or from your personal savings.
Catch up provisions will be possible where concessional contribution caps have not been reached in previous years for those with total super balances under $500,000. The catch up provisions however do not come into effect until 1 July 2018.
The amount of money you can add to your super after-tax will reduce (non-concessional contributions cap)
The maximum amount you can add to your super using after-tax money is $100,000 for the 2017/18 financial year (for people with super balances below $1.6 million) as at 30 June 2017.
If you are under the age of 65 you can bring forward two years' contribution caps, giving you a cap of $300,000 over three years. There are transitional arrangements in place if you already triggered the bring-forward rule prior to 1 July 2017, with the table below outlining the impact of the rule changes.
For those aged between age 65 and 74 you can still make after-tax contributions as long as you satisfy the work test requirements (40 hours in 30 consecutive days within the financial year of contribution).
Earn under $37,000 per year?
The Low Income Super Contribution (LISC) has been replaced by the Low Income Super Tax Offset (LISTO) effective 1 July 2017. In essence, there will be no changes to how this works – only the name!
If you earn equal or less than $37,000 per year, you may receive a tax refund of up to $500 paid into your super account. This will happen automatically – the ATO will determine if you’re eligible and will make the payment.
IMPORTANT NOTE: If we don’t have your Tax File Number (TFN) on file then the payment can’t be made. Please check if you have provided Statewide Super with your TFN by calling 1300 65 18 65 or by logging onto your secure online account.
Do you earn over $250,000?
If your adjusted taxable income is over $250,000, you may have to pay an additional 15% tax on any before-tax contributions made to your super. This is known as the ‘Division 293 tax’ and has been reduced from $300,000, effective 1 July 2017. This assessment is done automatically – the ATO will determine if you’re impacted and provide an opportunity for the additional tax payment to be deducted from your super account.
Earn less than $40,000 and your partner wants to boost your super?
If the answer is ‘yes’ to both of the questions above, then your partner may be eligible to receive a ‘spouse offset.’ The maximum rebate is $540, if you earn less than $37,000 and your partner contributes at least $3,000. The tax offset is gradually reduced if your income is above $37,000 and completely phases out if your income is above $40,000.
IMPORTANT NOTE: If you are over 65, then you may need to meet other conditions. Simply call 1300 65 18 65 for all the details.
Do you want to add money to your super and claim a tax deduction?
If you are eligible to contribute into super – then here’s some good news!
From 1 July 2017, anyone can make personal super contributions (up to the annual limits) and claim a tax deduction in their tax return.
This was previously restricted to those who were largely self-employed, but is now available to anyone who is able to contribute to super (up to age 65, or between age 65 and 75 and meeting the work test).
This is great news if you want to reduce your taxable income or capital gains tax, and have not maximised your concessional contribution cap.
Are you departing from Australia after a working holiday?
From 1 July 2017, those on a Working Holiday Maker Visa in Australia will pay 65% tax on their Departing Australia Superannuation Payment (DASP) when leaving the country. The tax applicable on other Departing Australia Superannuation payments is 35%.
Are you set to receive the government co-contribution? Read on!
From 2017-18, the amount of government co-contribution reduces on a sliding scale for every dollar of your total income over $36,813 and cuts out altogether for those with a total income exceeding $51,813. There are also additional requirements to receive a government co-contribution from 2017-18:
- a total super balance less than $1.6 million as at 30 June 2017 (for the 2017-18 financial year)
- not breaching the after-tax contributions cap.
Other requirements are listed in our How Super Works booklet.
Anti-detriment payments are no longer paid
From 1 July 2017, Statewide Super (and all other super funds) can no longer pay anti-detriment payments on death benefits to eligible beneficiaries.
IMPORTANT NOTE: Should a fund member pass away on or before 30 June 2017, we can still include an anti-detriment payment for eligible beneficiaries. Statewide Super has until 30 June 2019 to pay the benefit.
Legislation changes for Salarylink accounts
Tax changes that may affect your superannuation contributions
There has been some recent tax changes that may affect your superannuation contributions. To learn more read the Important information for Salarylink members documents.
Legislation changes for pension accounts
Want to start a superannuation pension?
This is known as the ‘Transfer Balance Cap’. The maximum amount that you can transfer into your pension account is $1.6 million for the 2017-18 financial year. It is important to note that this cap applies to the combined amounts in all of your pension accounts (excluding Transition to Retirement accounts) and will be indexed in line with CPI.
You have the ability to make multiple transfers, as long as it is below the $1.6 million cap. Any existing money in your pension account (as at 30 June 2017) will be counted toward the ‘transfer balance cap.’
However, please note that investment earnings do not contribute towards the transfer balance cap (e.g. your pension account exceeds $1.6 million due to investment earnings).Conversely, you can’t ‘top up’ your pension account if you have already used your cap and your pension account balance drops below $1.6 million (due to investment losses or pension payments).
IMPORTANT NOTE: If you’re worried that you might be near the cap, you may wish to speak to the experts at Statewide Super Financial Planning who can assess your current situation. Simply register online or call 1300 65 18 65 to make an appointment.
Do you have a Transition to Retirement (TTR) income stream?
Investment earnings within transition to retirement income streams were tax exempt up to 30 June 2017. From 1 July 2017, a 15% tax rate applies to investment earnings on transition to retirement accounts. The tax treatment of income paid by transition to retirement income streams will remain unchanged.
The information provided contains general advice which does not take into account your specific objectives, financial situation or needs. You should consider the appropriateness of this general advice with regard to your personal circumstances, obtain independent financial advice, and consider the applicable Product Disclosure Statement (PDS) and Target Market Determination (TMD) before making an investment decision.