Superannuation: what you need to know this financial year

The laws around superannuation are constantly changing. Whether you're an SMSF trustee, thinking about becoming one, or simply contributing via your employer, it's important to stay on top of these laws to understand how they might affect you. Below we outline the what you can contribute to your superannuation, the minimum you need to withdraw from your superannuation if you're in pension phase, and other handy bits of information for the 2015 financial year. 

 
Both concessional and non-concessional contribution caps have increased

Want to contribute extra money to your superannuation? The Contribution Caps (basically, how much you contribute before the law around any tax benefits or consequences will take effect) have changed. 

Concessional contributions cap 

The term 'concessional contributions' refers to contributions that receive special tax treatment. Concessional contributions are before-tax contributions which can include employer contributions, individual tax-deductible contributions and contributions made under a salary sacrifice arrangement.

Two of the three concessional contribution caps have increased:

Financial year

General cap 

People aged 49 or over on the last day of the previous financial year

People aged 59 or over on 30 June 2013

2015

$30,000

$35,000

$35,000

2014

$25,000

$25,000

$35,000

2013

$25,000

$25,000

$25,000

Non-concessional contributions cap

The non-concessional contribution cap (any money you want to contribute to your superannuation fund after you've paid tax on it) has increased from $150,000 to $180,000:

Financial year

Cap

2015

$180,000

2014

$150,000

2013

$150,000

You might also be interested in reading What SMSF trustees need to know about the new ATO penalties

 
Excess concessional contributions will no longer be taxed

From 1 July 2013, excess concessional contributions will no longer be taxed. Instead, the excess is simply added to the individual’s personal taxable income and taxed at marginal tax rates. However, a charge is applied to the additional tax liability as a result of having excess concessional contributions included in your return, which acknowledges that the tax is collected much later than normal income tax. This is known as the Excess Concessional Contribution Charge. More detail can be found on the ATO website here.

 
Earn less than $49,488? Take advantage of the Super Co-Contribution 

If you earn less than $34,488 in assessable income for the 2015 financial year, the federal government will pay 50c for every dollar contributed to your fund. This is paid up to a maximum of $500 and applies to non-concessional contributions only.

The super co-contribution does not apply if you earn more than $49,488, but if you earn in between these numbers then you may still be eligible for contribution, albiet reduced. Want to see if you are eligible? Here's a handy calculator on the ATO website here.

 
The Low Income Super Contribution is continuing until 2017

Originally thought to be changing this year, the Low Income Super Contribution will now continue until the 2017 financial year. If you earn less than $37,000 a year and your employer makes concessional super contributions on your behalf, then you can expect a refund of the contributions tax deducted from your super account. You don’t need to do anything in order to receive this contribution: if you are eligible it is automatically calculated for you by the Tax Office.

 
Does your spouse earn less than $13,800?

You may be entitled to a maximum tax offset of up to 18% on contributions up to $3,000 each financial year if your spouse’s assessable income was less than $13,800. The contributions must be non-concessional and made to a complying fund.

 
The Super Guarantee has increased

The Super Guarantee (SG) – which requires employers to provide sufficient super support for their employees – has increased from 9.25% to 9.5% from 1 July 2014.

 
Earn over $300,000? Pay attention to the Division 293 tax threshold

From 1 July 2012 onwards, individuals whose income for surcharge purposes is over $300,000 are subject to extra tax on their concessional contributions at 15% (thereby reducing the tax concession received). The Tax Office gathers the required information from the individual income tax return and issues an assessment where applicable. If you think this may apply to you, more details on the calculation of Division 293 Tax can be found on the ATO website here.

 
For those receiving a pension, here's a table outlining the minimum pension withdrawals:

Age (at 1 July or pension commencement date if commenced during year)

Minimum % withdrawal

2013-2014 and 2014-2015 income years

Under 65

4%

65–74

5%

75–79

6%

80–84

7%

85–89

9%

90–94

11%

95 or more

14%

 

Find out more about our SMSF administration service: learn How Rivkin Super works, read our Rivkin Super FAQ, or schedule a call with me here.

comments powered by Disqus

DISCLAIMER: Rivkin aims to provide clear and simple information to those visiting our website. If any part of this disclaimer does not make sense, please phone Rivkin and ask to speak with a member of our Dealing and Relationship Management Team. Rivkin provides general advice, securities and derivatives dealing services and accounting administration services. Rivkin does not provide advice that takes into account your, or anybody else's, investment objectives, financial situation or needs. We strongly suggest that you consult an independent, licenced financial advisor before acting upon any information contained on this website. Investing in and trading securities (such as shares listed on the ASX) and/or derivatives (such as Contracts for Difference or 'CFDs') carry financial risks. CFDs carry with them various additional risks that differ from more simple securities such as fully-paid company shares. Some of these risks include not owning the underlying instrument from which a price is being derived, settling trades 'over the counter' with a financial institution rather than on a stock exchange, and using leverage to gain access to trades that may have a higher face value than your initial deposit. This risk of leverage means that it is possible to lose more than your initial investment. Our aim is to create more life choices for our clients, which means improving the wealth of clients throughout many market cycles by nurturing a relationship spanning many years. If you are not comfortable with your understanding of the risks involved before using a Rivkin product and service, please contact our office to seek further information or a Product Disclosure Statement, or make an appointment to sit with one of our friendly financial experts. It is in our interest for your Rivkin experience to be a rewarding and comfortable one. Rivkin is a trading name of Rivkin Securities ABN 87123290602, which holds Australian Financial Services Licence No. 332 802.