Important Year-End Super Considerations for 2024-25

Posted on 8 May 2025 | by Allan Hall

ACT NOW to ensure your super is in order before 30 June 2025

Key actions covered in this update:

Personal Contributions
Concessional Contributions
‘Catch Up’ Concessional Contributions
Work Test
Non Concessional Contributions
Minimum Pension 2024/25

Personal Contributions

For those wanting to maximise your personal contributions in 2024/25, please carefully review the limits and information provided below. There is no increase in the contribution limits taking effect from 1 July 2025 however there will be an increase in the Total Superannuation Balance threshold from $1.9m to $2m which is relevant for making non concessional contributions.

Financial Year	Concessional Cap (pre-tax)	Non-concessional Cap (after tax)
	(Employer / Salary Sacrifice Personal Deductible)	(Personal After Tax & subject to Total Super Balance <$1.9m)
2024/25	$30,000	$120,000

Concessional Contributions

Your contributions must be received in your super fund before 30 June 2025 to ensure that:

you are eligible to claim a deduction in 2024/25 for your contributions made;
the contribution is counted against your limit in the correct financial year.

Please remember that 30 June 2025 falls on a Monday so please do not leave your contributions until the last minute. They need to be cleared in the fund’s bank account on 30 June. Please allow at least three days for any interbank transfer to occur. If making contributions to a retail or industry super fund please ensure your contributions are made by 20 June to ensure they are allocated to your member account by 30 June.

Be sure to check the amount of actual employer or personal contributions already received / due to be received in your super fund before making any top up contributions.

‘Catch Up’ Concessional Contributions

These rules commenced on 1 July 2018 so we are now into the sixth year of ‘catch up’ contributions whereby a person with a super balance of less than $500,000 as at 30 June 2024 is able to make a personal concessional contribution in 2024/25 equal to the unused amount of the concessional contribution limits applicable from 2019/20 to 2023/24. Please note that 2024/25 is the last year in which any unused contributions from 2019/20 can be claimed as they drop off after five years.

Financial Year	Applicable limit
2019/20	$25,000
2020/21	$25,000
2021/22	$27,500
2022/23	$27,500
2023/24	$27,500

For example, Sam had employer contributions of $15,000 for each of 2019/20, 2020/21 and 2021/22 and then $18,500 for each of 2022/23 and 2023/24. This means Sam has $50,500 in unused or ‘catch up’ contributions. His total superannuation balance at 30 June 2024 was $380,000. If Sam has higher than normal taxable income in 2024/25, due to say, a capital gain then, in addition to his current year 2024/25 contributions he can contribute an extra $50,500 as a personal concessional contribution before 30 June 2025 to reduce his taxable income. Please contact us if you want to check your unused catch up contribution amount.

Work Test

Any person aged 67-74 must meet the work test before they can claim a tax deduction for a personal contribution. To satisfy the work test, you must work at least 40 hours in a consecutive 30 day period at some time during 2024/25.

Any person aged 75 or older is unable to make personal contributions, their super fund can only accept mandated employer contributions (i.e. superannuation guarantee amounts) on their behalf.

Non Concessional Contributions

It is possible to ‘bring forward’ up to 3 years of contributions in 2024/25 if you were under age 75 on 1 July 2024 and your total superannuation balance at 30 June 2024 was within the thresholds noted below:

Total Super Balance as at 30 June 2024	Age <75 on 1 July 2024
Your Total Super Balance is the combined total of all balances in super funds of which you are a member
Less than $1,660,000	$360,000
Greater than $1,660,000 but less than $1,780,000	$240,000
Greater than $1,780,000 but less than $1,900,000	$120,000
Greater than $1,900,000	$0

Please note for planning purposes that the contribution limits will not change but the bring forward thresholds will change on 1 July 2025 with effect for 2025/26. These changes are noted in the following table below:

Total Super Balance as at 30 June 2025	Age <75 on 1 July 2025
Less than $1,760,000	$360,000
Greater than $1,760,000 but less than $1,880,000	$240,000
Greater than $1,880,000 but less than $2,000,000	$120,000
Greater than $2,000,000	$0

Strategy Tip

If wanting to maximise super contributions, consider contributing only $120,000 in 2024/25 to enable a contribution of $360,000 in 2025/26, provided all eligibility criteria are met.
If wanting to equalise super balances between spouses, consider a withdrawal from the high balance and a contribution into the low balance. This is useful for optimising the member balances to take full advantage of the pension cap and various eligibility provisions associated with a person’s total superannuation balance. It also has the effect of lowering the ‘taxable’ portion of that member’s benefit which reduces any future tax payable on death benefits received by the beneficiaries. Please talk to us if you are keen to learn more about this.

Minimum Pension 2024/25

If you are in pension phase, please check to ensure you have withdrawn your minimum pension for this financial year before 30 June 2025. Where these requirements have not been met your fund will be subject to 15% tax on its pension asset investment earnings, rather than being tax-free.

For our SMSF clients, the amount would have been notified to you in the completion letter in the FY24 financials package. Please contact us if you are unsure of your minimum pension payment for 2024/25.

ALLAN HALL SUPERANNUATION

contributions, EOFY, pension payments, self-managed superannuation SMSF

Important Year-End Super Considerations for 2023-24

Posted on 12 June 2024 | by Allan Hall

ACT NOW to ensure your super is in order before 30 June 2024

These rules commenced on 1 July 2018 so we are now into the fifth year of ‘catch up’ contributions whereby a person with a super balance of less than $500,000 as at 30 June 2023 is able to make a personal concessional contribution in 2023/24 equal to the unused amount of the concessional contribution limits applicable from 2018/19 to 2022/23. Please note that 2023/24 is the last year in which any unused contributions from 2018/19 can be claimed as they drop off after five years.

Financial Year	Applicable limit
2018/19	$25,000
2019/20	$25,000
2020/21	$25,000
2021/22	$27,500
2022/23	$27,500

For example, Sam had employer contributions of $15,000 for each of 2018/19, 2019/20 and 2020/21 and $18,500 for each of 2021/22 and 2022/23. His total superannuation balance at 30 June 2023 was $380,000. If Sam has higher than normal taxable income in 2023/24, due to say, a capital gain then, in addition to his current year 2023/24 contributions he can contribute an extra $48,000 as a personal concessional contribution before 30 June 2024 to reduce his taxable income. The extra $48,000 comprises $30,000 in unused contributions from 2018/19 to 2020/21 and $18,000 in unused contributions from 2021/22 and 2022/23.

Please contact us if you want to check your unused catch up contribution amount.

Non Concessional Contributions

It is possible to ‘bring forward’ up to 3 years of contributions in 2023/24 if you were under age 75 on 1 July 2023 and your total superannuation balance at 30 June 2023 was within the thresholds noted below:

Total Super Balance as at 30 June 2023	Age <75 on 1 July 2023
Your Total Super Balance is the combined total of all balances in super funds of which you are a member
Less than $1,680,000	$330,000
Greater than $1,680,000 but less than $1,790,000	$220,000
Greater than $1,790,000 but less than $1,900,000	$110,000
Greater than $1,900,000	$0

Please note for planning purposes that the bring forward thresholds will change on 1 July 2024 with effect for 2024/25. These changes are noted in the following table below:

Total Super Balance as at 30 June 2024	Age <75 on 1 July 2024
Less than $1,660,000	$360,000
Greater than $1,660,000 but less than $1,780,000	$240,000
Greater than $1,780,000 but less than $1,900,000	$120,000
Greater than $1,900,000	$0

Strategy Tip

If wanting to maximise super contributions, consider contributing only $110,000 in 2023/24 to enable a contribution of $360,000 in 2024/25, provided all eligibility criteria are met.
If wanting to equalise super balances between spouses, consider a withdrawal from the high balance and a contribution into the low balance. This is useful for optimising the member balances to take full advantage of the pension cap and various eligibility provisions associated with a person’s total superannuation balance. It also has the effect of lowering the ‘taxable’ portion of that member’s benefit which reduces any future tax payable on death benefits received by the beneficiaries. Please talk to us if you are keen to learn more about this.

If you are aged 67 to 74 years, you must satisfy a work test in order to be eligible to claim a tax deduction for your personal concessional contributions.

Work Test

To satisfy the work test, you must have worked at least 40 hours in a consecutive 30-day period in the 2023/24 financial year.

If you are aged 75 or over, your super fund is only able to accept mandated employer contributions (i.e. superannuation guarantee amounts) on your behalf.

Minimum Pension 2023/24

If you are in pension phase, please check to ensure you have withdrawn your minimum pension for this financial year before 30 June 2024. Where these requirements have not been met your fund will be subject to 15% tax on its pension asset investment earnings, rather than being tax-free.

For our SMSF clients, the amount would have been notified to you in the completion letter in the FY23 financials package. Please contact us if you are unsure of your minimum pension payment for 2023/24.

ALLAN HALL SUPERANNUATION

compliance, contributions, EOFY, pension payments, self-managed superannuation SMSF, strategy, superannuation

1 July Changes

Posted on 10 July 2023 | by Allan Hall

What you need to know

There are legal, financial, and other changes your business will have to be across very soon. Not sure what they are or what to do? Don’t worry, we have you covered.

It’s been a big year for changes in areas like people management, pay and tax. Here’s a rundown of some key changes that will come into effect 1 July and what they mean for your business and your employees.

1. SUPER GUARANTEE INCREASES

If you haven’t already, then it’s time to get your payroll systems sorted as the superannuation guarantee increases to 11% from 1 July.

Also, make sure you’re across the gradual increases, which will see the super guarantee reach 12% by July 2025.

To work out how this will impact employees’ pay, have a look at whether their contract states their salary is inclusive of superannuation or not.

2. WAGES GO UP

Employees should also be aware that from 1 July, wage increases will come into effect following a ruling from the Fair Work Commission.

For employees who aren’t covered by an award, the minimum wage will go up from 1 July to $882.80 per week, or $23.23 per hour, and will apply from the first full pay period starting on or after 1 July 2023.

For employees covered by an award, minimum award wages will increase by 5.75%, also applying to the first full pay period starting on or after 1 July 2023.

3. FAIR WORK COMMISSION CHANGES

From 1 July 2023, the application fee will increase to $83.30. The fee applies to dismissal, general protections, bullying, and sexual harassment at work applications made under sections 365, 372, 394, 773, and 789FC of the Fair Work Act 2009.

There is no fee to make an application to deal with a sexual harassment dispute under section 527F of the Fair Work Act.

Also effective from 1 July, the high-income threshold in unfair dismissal cases will increase to $167,500 and the compensation limit will be $83,750 for dismissals occurring on or after 1 July 2023.

4. PAID PARENTAL LEAVE CHANGES

From 1 July, amendments to the Paid Parental Leave Scheme will come into effect.

Notably, the Dad and Partner Pay (DAPP) scheme, which currently provides up to two weeks of paid leave, will now be combined with the 18-week paid parental leave scheme. This means eligible parent couples or single parents can share their 20 weeks of leave – aimed at greater gender equity in parental caring responsibilities.

There are other changes, too, such as the whole 20 weeks of leave of instalments can be received flexibly in multiple blocks within 24 months of the child’s birth or adoption date, removing the previous requirement of 12 weeks in one continuous period.

Also, note that employees now have greater rights to request an additional 12 months of leave (24 in total) – and employers need to show reasonable business grounds on which to refuse.

5. CHILDCARE SUBSIDIES

For those who employ parents with young children, it’s worth noting that childcare rebates will change from 1 July. They should result in any employees with a family income of less than $530,000 getting a higher level of subsidy for the cost of childcare.

For example, families earning up to $80,000 will get an increased maximum Child Care Subsidy (CCS) amount, from 85% to 90%. If they earn over $80,000, they may get a subsidy starting from 90%, but it will go down by 1% for each $5,000 of income the family earns.

While these changes are applied automatically, it is worth being aware that they are coming.

6. DOMESTIC VIOLENCE LEAVE INTRODUCED

From 1 February, employers with 15 or more employees were required to provide their employees with 10 days of paid family and domestic violence leave (FDVL) per year.

For smaller employers who employ less than 15 employees, this entitlement will operate from 1 August 2023.

Paid family and domestic violence leave is quite a sensitive topic, and there need to be procedures in place – on everything from how the HR or manager handles requests to the privacy issues around how it gets recorded on a pay slip.

7. PENSION AGE AND ELIGIBILITY INCREASES

For those businesses employing older Australians, it’s worth noting that from 1 July, the pension age will be raised to 67 for those born on or after 1 January 1957.

Not only that but asset and income eligibility tests will also be revamped, which means singles can earn $204 a fortnight and couples $360 a fortnight, before losing their full pension.

8. ENERGY BILL RELIEF ON ITS WAY

With soaring power bills contributing significantly to business operating costs, $650 in bill relief is on its way from July.

The total amount of bill relief will vary by state. To be eligible, your business must be on a separately metered business tariff with your electricity retailer – so if you run a business from home, you probably won’t qualify.

CONTACT ALLAN HALL BUSINESS ADVISORS

Labor Government 2022-23 Federal Budget

Posted on 26 October 2022 | by Allan Hall

Tax & Superannuation Overview

2022–23 Labor Federal Budget Highlights

The Federal Treasurer, Dr Jim Chalmers, handed down the Labor government’s first Federal Budget at 7:30 pm (AEDT) on 25 October 2022.

Despite an uncertain global economic environment, the Treasurer has lauded Australia’s low unemployment and strong export prices as reason for a 3.5% growth in the current financial year, slowing to 1.5% in 2023–24. The Budget projects a deficit of $36.9 billion, lower than the forecast earlier this year of $78 billion.

Described as a sensible Budget for the current conditions, it contains various cost of living relief measures including cheaper child care, expanding paid parental leave and encouraging downsizing to free up housing stock. Key tax measures are targeted at multinationals, particularly changes to the thin capitalisation rules, and changes to deduction rules for intangibles.

Importantly, no amendments have been proposed to the already legislated Stage-3 individual tax rate cuts. Additional funding for a range of tax administration and compliance programs have also been announced. Finally, the fate of a suite of announced but unenacted tax measures, including a few that have been around for at least 10 years, has been confirmed.

The full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au. The tax, superannuation and social security highlights are set out below.

To read our comprehensive Budget report outlining the changes to taxation and accounting, please click below:

FULL BUDGET REPORT

Business

Electric vehicles under the luxury car tax threshold will be exempt from fringe benefits tax and import tariffs.
A number of Victorian and ACT-based business grants relating to the COVID-19 pandemic will be non-assessable non-exempt income for tax purposes.
Grants will be provided to small and medium-sized businesses to fund energy-efficient equipment upgrades.
The tax treatment for off-market share buy-backs undertaken by listed public companies will be aligned with the treatment of on-market share buy-backs.
The 2021–22 Budget measure to allow taxpayers to self-assess the effective life of intangible depreciating assets will not proceed.
Heavy Vehicle Road User Charge rate increased from 26.4 to 27.2 cents per litre of diesel fuel, effective from 29 September 2022.
Australia has signed a new tax treaty with Iceland.
Additional tariffs on goods imported from Russia and Belarus have been extended by a further 12 months, to 24 October 2023.
Ukraine goods are exempted from import duties for a period of 12 months from 4 July 2022.
Technical amendments to the taxation of financial arrangements (TOFA) rules proposed in the 2021–22 Budget will be deferred.
Amendments to simplify the taxation of financial arrangements (TOFA) rules proposed in the 2016–17 Budget will not proceed.
The proposed measure from the 2018–19 Budget to impose a limit of $10,000 for cash payments will not proceed.
Proposed changes in the 2016–17 Budget to amend the taxation of asset-backed financing arrangements will not proceed.
The new tax and regulatory regime for limited partnership collective investment vehicles proposed in the 2016–17 Budget will not proceed.
The Pacific Australia Labour Mobility (PALM) scheme will be expanded and enhanced.

FBT and tariff exemptions for electric vehicles

Electric vehicles under the luxury car tax threshold ($84,916 for 2022–23) will be exempt from fringe benefits tax and import tariffs. To qualify for the exemption, the electric vehicle must not have been held or used prior to 1 July 2022. Legislation introducing the FBT exemption is before the Senate.

The FBT exemption ultimately provides an opportunity for individuals to purchase an electric vehicle under a salary sacrifice novated lease arrangement. Without the FBT exemption, any benefit of this type of arrangement can be negligible. This is especially the case when an employee’s business use percentage is very low or nil. A salary sacrifice arrangement effectively a saving for the user of an electric vehicle, as the payment of the vehicle will reduce their income tax. Along with the FBT savings, consumers of electric vehicle will also benefit from the removal of a 5% import tariff.

Despite the FBT exemption, an employer will still be required to report employees’ reportable car fringe benefits in the employees’ reportable fringe benefits amount. This reportable amount is part of the payment summary reporting requirements and is used to calculate various tax rebates and thresholds.

More business grants to non-assessable non-exempt income status

State-based business grants handed out during the COVID-19 pandemic are assessable income to the recipient unless the government places that grant in a special exclusion category. The government has announced the following Victorian and ACT business grants to be non-assessable non-exempt income for tax purposes:

This announcement is in addition to several other state-based business grants that have been give non-assessable non-exempt status since the beginning of the COVID-19 pandemic.

Energy efficiency grants for SMEs

Grants will be provided to small and medium-sized businesses to fund energy-efficient equipment upgrades.

The grants will be available to support studies, planning, equipment and facility upgrade projects that improve energy efficiency, reduce emissions or improve management of power demand. The government will provide $62.6 million over 3 years from 2022–23 for this measure.

Fuel tax credits — heavy vehicle road user charge increased

The Heavy Vehicle Road User Charge rate has been increased from 26.4 cents per litre to 27.2 cents per litre of diesel fuel, effective from 29 September 2022.

The previous rate of 26.4 cents per litre was announced in the 2021–22 Budget and commenced on 1 July 2021. The increased rate will reduce expenditure on the Fuel Tax Credit from the 2022–23 income year.

Individuals

The amount pensioners can earn in 2022–23 will increase by $4,000 before their pension is reduced, supporting pensioners who want to work or work more hours to do so without losing their pension.
To incentivise pensioners to downsize their homes, the assets test exemption for principal home sale proceeds will be extended and the income test changed.
The income threshold for the Commonwealth Seniors Health Card will be increased from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples.
The Paid Parental Leave Scheme will be amended so that either parent is able to claim the payment from 1 July 2023. The scheme will also be expanded by 2 additional weeks a year from 1 July 2024 until it reaches 26 weeks from 1 July 2026.
The maximum Child Care Subsidy (CCS) rate and the CCS rate for all families earning less than $530,000 in household income will be increased.
The current higher Child Care Subsidy (CCS) rates for families with multiple children aged 5 or under in child care will be maintained.
Legislation will be introduced to clarify that digital currency (or cryptocurrencies) will not be treated as foreign currency for income tax purposes.

Superannuation

Eligibility to make a downsizer contribution to superannuation will be expanded by reducing the minimum age from 60 to 55 years.
The 2021–22 Budget measure that proposed relaxing residency requirements for SMSFs and small APRA-regulated funds (SAFs) from 1 July 2022, has been deferred.
The 2018–19 Budget measure that proposed changing the annual audit requirement for certain self-managed superannuation funds (SMSFs) will not proceed.
A requirement for retirement income product providers to report standardised metrics in product disclosure statements, originally announced in the 2018–19 Budget, will not proceed.

Minimum age to make downsizer super contributions reduced

Eligibility to make a downsizer contribution to superannuation will be expanded by reducing the minimum age from 60 to 55 years.

The downsizer contribution allows an individual to make a one-off post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home.

Both members of a couple can contribute and the contributions do not count towards non-concessional contribution caps.

The measure will take effect from the start of the first quarter after Royal Assent of the enabling legislation.

Proposed changes to SMSF residency requirements — deferred

The 2021–22 Budget measure that proposed relaxing residency requirements for SMSFs and small APRA-regulated funds (SAFs) from 1 July 2022, has been deferred.

The proposed measure relaxes the residency requirements for SMSFs by extending the central control and management test safe harbour from two to five years for SMSFs. In addition, the active member test will also be removed for both SMSFs and SAFs.

The change will allow members to continue to contribute to their superannuation fund whilst temporarily overseas, ensuring parity with members of large APRA-regulated funds.

This measure will now take effect on or after the date of Royal Assent of the enabling legislation.

Income threshold increased for Commonwealth Seniors Health Card

The income threshold for the Commonwealth Seniors Health Card will be increased from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples.

The government will also freeze social security deeming rates at their current levels for a further 2 years until 30 June 2024, to support older Australians who rely on income from deemed financial investments, as well as the pension, to deal with the rising cost of living.

This measure delivers on the Labor government’s election commitments as published in the Plan for a Better Future.

Need help?

If you would like assistance to interpret these changes and how they may affect your individual or business circumstances, please contact your Allan Hall Advisor on 02 9981 2300.

CONTACT ALLAN HALL

Increase to CSHC income test legislated

Posted on 11 October 2022 | by Allan Hall

Cheaper healthcare more accessible for eligible self-funded retirees

Key points

Recent legislation will increase the Commonwealth Seniors Health Card (CSHC) income test thresholds
Income test limit thresholds will increase to $90,000 for a single person and $144,000 for couples (combined)
The CSHC provides access to valuable health concessions for older Australians.

The CSHC is a concession card that provides access to cheaper healthcare and other discounts and can be valuable in reducing the cost of living for self-funded retirees. Generally, the CSHC is accessible by persons of Age Pension age but who are not eligible for the Age Pension due to either the assets test or income test.

The CSHC is valid for 12 months and is reissued on 1 August each year provided eligibility requirements continue to be met. The eligibility test for the CSHC is different to the Age pension in that it does not have an assets test. The Services Australia webpage identifies the criteria to get a CHSC card.

Retirees who have a partner must provide details of their partner’s income in the application as they will be assessed as a couple.

The incoming increase in income test thresholds is a material increase which the Government expects will lead to more than 44,000 additional self-funded retirees being able to access the CHSC card in the first year, increasing to 50,000 by 2026-27.

What income counts?

To meet the CSHC income test currently a retiree must earn no more than $61,284 a year for a single person and $98,054 a year for couples (combined).

The CSHC income test is based on adjusted taxable income (ATI), usually evidenced by the tax notice of assessment plus any other income documents required to determine the person’s ATI
The reference tax year used is typically the tax year immediately preceding the current tax year, except if an individual has not received their notice of assessment for that year, then the tax year immediately preceding will be used
For couples, both individuals must use the same tax year.

An individual’s ATI includes a range of criteria which can be reviewed here.

What are the benefits?

The main benefit of the CSHC is that it provides access to the following valuable health concessions:

cheaper medicine under the Pharmaceutical Benefits Scheme (PBS)
bulk billed doctor visits
a refund for medical costs when the Medicare Safety Net is reached.

The value of these CSHC’s health concessions to retirees depends on their individual use of Medicare and PBS medicines.

State or territory governments and local councils may also offer additional discounts to CSHC holders on other expenses such as utility bills, rates and public transport. However, these are not as widespread or significant as those for the Pensioner Concession Card (PCC) which is provided to individuals receiving an Age Pension.

The CSHC can be applied for via the Services Australia website at https://www.servicesaustralia.gov.au/how-to-claim-commonwealth-seniors-health-card.

CONTACT ALLAN HALL SUPERANNUATION

ACT NOW Super Contributions for YE 30 June 2022

Posted on 15 June 2022 | by Allan Hall

Employer Contributions

Employers please note: if you intend to claim a tax deduction in 2021/22 for your employees’ June 2022 quarter super contributions, please ensure you make the payment as soon as possible so as to allow enough time for the contributions to be processed through the superannuation clearing house and allocated to your employee’s super accounts.

Otherwise please ensure the contributions are made by mid-July to ensure you meet the due date deadline of 28 July 2022.

Please note: Employers should turn their attention to managing the superannuation guarantee (SG) increase which comes into effect 1 July. Read more »

Personal Contributions

If you are seeking to maximise your personal contributions in 2021/22, please carefully review the limits and information provided below.

Financial Year	Concessional Cap	Non-concessional Cap¹
	(Employer / Salary Sacrifice Personal Deductible)	(Personal After Tax & Subject to Total Super Balance <$1.7m)
2021/22	$27,500	$110,000

Your contributions must be received in your Fund on or before 30 June 2022 — the reasons are twofold to ensure that:

you are eligible to claim a deduction in 2021/22 for any personal concessional contributions made;
the contribution is counted against your limit for the correct year.

We suggest you make your contributions as soon as possible to allow enough time for the contributions to be processed and allocated to your account, particularly as super fund administrators are extremely busy at this time of year.

Be sure to check the amount of actual contributions already received / due to be received in your super fund before making any top-up contributions.

If making tax deductible personal contributions, please ensure you submit a Notice of Intention to Claim a Deduction for Super Contributions form to your fund as soon as possible and check to ensure they issue you with an Acknowledgement of Receipt notice. You cannot claim a tax deduction without this receipt from your fund.

(1) Regarding the non-concessional cap, you may be eligible to ‘bring forward’ up to 3 years of contributions in 2021/22 if you were under age 67 on 1 July 2021 and meet certain criteria:

Total Super Balance as at 30 June 2021	Age <67 on 1 July 2021	Age 67-74
	Maximum contribution allowable
Your total super balance is the combined total of all balances in super funds of which you are a member	No work test required for a person aged <67 at time of making the contribution	Work test is required
Less than $1.48m	$330,000	$110,000
Greater than $1.48m but less than $1.59m	$220,000	$110,000
Greater than $1.59m but less than $1.7m	$110,000	$110,000
Greater than $1.7m	$0	$0

Please note for planning purposes that changes will take effect for the 2022/23 financial year whereby the work test will be abolished for non-concessional contributions and any person under the age of 75 will be able to make non-concessional contributions and make use of the bring forward thresholds noted in the above table.

For anyone under age 67 wanting to optimise their super contributions, they may choose to contribute only $110,000 in 2021/22 to enable them to contribute $330,000 in 2022/23, provided all eligibility criteria is met.

Work Test Changes from 1 July 2022

If you are aged 67 to 74 years, you must satisfy a work test in order to be eligible to contribute to super for 2021/22. To satisfy the work test, you must have worked at least 40 hours in a consecutive 30-day period in the 2021/22 financial year before the super fund is eligible to accept your contribution.

The work test shall be abolished from 1 July 2022 for those aged 67 to 74 making non-concessional or CGT retirement exemption contributions. It still must be met however for those making personal contributions for which they intend to claim a personal tax deduction.

If you are aged 75 or over, your super fund is only able to accept mandated employer contributions (i.e. superannuation guarantee amounts) on your behalf.

Government Co-contributions

If you are a low or middle-income earner, less than age 71 on 30 June 22 and make a non-concessional contribution of at least $1,000 to your super fund, the Government may also make a co-contribution up to a maximum of $500. If your total income is equal to or less than the lower threshold of $41,112 for 2021/22 and you make a non-concessional contribution of $1,000, you will receive the maximum co-contribution of $500. You will not receive any co-contribution if your income is equal to or greater than the higher threshold of $56,112 for 2021/22. If your total income is between those thresholds, the payment will be pro-rated. The ATO calculates your total income by adding:

assessable income
reportable fringe benefits total
total reportable super contributions reduced (but not below zero) by any excess concessional contributions

minus:

assessable first home super saver released amount
allowable business deductions.

‘Catch Up’ Contributions

A reminder that these rules commenced on 1 July 2018, therefore we are into the fourth year of ‘catch up’ contributions whereby a person with a super balance of less than $500,000 as at 30 June 2021 is able to make a personal concessional contribution in 2021/22 equal to the unused amount of the $25,000 limit from 2018/19, 2019/20 & 2020/21.

For example, John had employer contributions of $15,000 for each of 2018/19, 2019/20 & 2020/21. His total superannuation balance at 30 June 2021 was $380,000. If John has higher than normal taxable income in 2021/22, due to say, a capital gain then, in addition to his 2021/22 contributions he can contribute an extra $30,000 as a personal concessional contribution before 30 June 2022 to reduce his taxable income. The extra $30,000 comprises $10,000 in unused contributions from 2018/19, 2019/20 & 2020/21.

Minimum Pension Withdrawals

If you are in pension phase, please check to ensure you have withdrawn your minimum pension for this financial year before 30 June 2022. Where these requirements have not been met your fund will be subject to 15% tax on its pension asset investment earnings, rather than being tax-free.

Please note, in March 2020 the Government halved the minimum annual payment required for a number of superannuation income streams, including account based pensions for the 2019/20 and 2020/21 financial years. The Government since extended the 50% reduction on pension minimum withdrawals for the 2021/22 and 2022/23 financial years as well.

For our SMSF clients, please contact us if you are not sure of your minimum pension requirement for 2021/22.

Super changes from 1 July 2022

Posted on 5 April 2022 | by Allan Hall

The changes outlined below were proposed in March’s Federal Budget and come into effect from 1 July this year.

If you’d like to talk with someone about how these changes could affect you, please contact Allan Hall’s Superannuation Team.

Change	Before 1 July 2022	From 1 July 2022 onwards
You’ll no longer need to earn $450 or more in a calendar month to receive Employer Super (SG) contributions from your employer	A person has to earn at least $450 in a month to be eligible for Employer Super (SG) contributions.	The minimum earnings threshold of $450 per month will no longer apply. This means all employees, regardless of how much they earn, are entitled to receive Employer Super (SG) payments into their super accounts.
The withdrawal limit for the First Home Super Saver Scheme (FHSSS) is increasing	The maximum you can save and withdraw using your super account under the FHSSS is $30,000.	The maximum you can save and withdraw is increasing from $30,000 to $50,000.
The age you can make Downsizer contributions is reducing	People aged 65 and over can contribute up to $300,000 to their super following the sale of their home. Couples could be eligible to contribute up to $300,000 each.	You will be able to make downsizer contributions from age 60 instead of age 65.
Changes to the work test for people between age 67 and 74	People aged 67 to 74 can only make extra super contributions (ie not SG contributions) if they meet the Work Test rules. The work test To meet the work test you must be employed for at least 40 hours over 30 days. (The 30 days must all be in the same financial year the contributions are made).	You won’t need to meet the Work Test when making extra contributions. Instead, you will only need to meet the Work Test (or work-test exemption) if you claim a tax deduction on personal contributions.
The age you can use the Bring-forward contributions rule is increasing	The Bring-forward contributions rule allows you to contribute up to three years of after-tax contributions ($330,000) in any one year if: • you’re aged 67 or younger, and • have a total super balance less than $1.48 million.	You will be able to use the Bring-forward contributions rule up to age 74 instead of up to age 67.
The minimum pension drawdown amount won’t be changing.	In 2019, the government temporally reduced the minimum pension drawdown amounts by 50%. This was in response to the economic effect of COVID. The minimum pension drawdown is the minimum amount you must withdraw from your pension account each year. This amount depends on your age and is a % of your total balance.	The government had planned to return the minimum pension drawdown amounts back to pre-COVID levels from 1 July 2022. It has now extended the reduced minimum pension drawdown level for another year. This means the drawdown amounts will stay the same for the 2022 financial year.

General Advice Warning

The information in this brochure is of a general nature only and does not take into account your personal objectives, financial situation or specific needs. We recommend that you consider your own financial position, objectives and requirements and seek advice from an authorised financial adviser before making any financial decisions.

Allan Hall Business Advisers Pty Ltd is a Corporate Authorised Representative of Allan Hall SMSF Advisory Pty Ltd ABN 71 608 966 276 AFSL 485203. Allan Hall Financial Planning Pty Ltd is an Authorised Representative of Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323.

11 Tax Facts About Superannuation

Posted on 11 October 2021 | by Allan Hall

Compared to other investment structures, super is widely considered to be one of the most tax-effective investment structures available from a wealth accumulation and cash flow generation perspective.

Although not a comprehensive list, below are 11 of the top tax facts about super.

Please note: Each tax fact isn’t covered in detail (only a brief snapshot is provided), other important considerations go with each. For example, it’s important to consider things such as contribution eligibility, and conditions of release. To discuss how any of the below may be relevant to your situation, talk to your Financial Adviser.

Super investment structure

Overview

When investing via super, it’s important to understand that there is an accumulation phase and a retirement phase. From a life stage perspective:

Accumulation phase generally coincides with the time in your life where contributions are being made to your super, and you are accumulating wealth via these contributions and investment earnings. Nearing retirement, some of us may commence a transition to retirement income stream (TRIS).
Retirement phase generally coincides with the time in your life where you are using the wealth you have accumulated to help fund your retirement lifestyle via either a retirement income stream, lump sum withdrawals, or a combination of both.

With the above in mind, from a tax perspective, the tax facts listed below are grouped according to their relevance to each phase. For example, the tax facts regarding contributions are underneath the title ‘Super (accumulation phase)’, as contributions can’t be made to a super account in retirement phase.

Super (accumulation phase)

Investment earnings in your super. Investment income is generally subject to a maximum of 15% tax. And, capital gains on assets held for longer than 12 months receive a 1/3 (33%) tax discount, which effectively reduces the tax rate to 10%.
Concessional (pre-tax) contributions to your super. The amount contributed is reduced by a tax of 15% (contributions tax). When considering salary sacrifice and personal deductible contributions (types of concessional contributions), this tax of 15% may be lower than your marginal tax rate. Please note:
1. If you have income and concessional contributions totalling more than $250,000, you can pay an additional 15% tax (called Division 293 tax) on some or all of your concessional contributions.
2. If you have adjusted taxable income of $37,000 or less, you may be eligible to receive the low-income super tax offset (up to $500).
3. Making concessional contributions to pay for premiums for certain insurance held through super can reduce contributions tax.
Non-concessional (after-tax) contributions to your super. The amount contributed isn’t reduced by a contributions tax. Please note:
1. If you have total income less than $54,837, you may be eligible to receive the Government co-contribution (up to $500).
2. If you make a spouse contribution (i.e. non-concessional contribution to your spouse’s super), you may be eligible to receive the spouse contribution tax offset (up to $540). The receiving spouse’s income must be less than $40,000.
Insurance in your super. Your super fund trustee can generally claim the insurance premiums as a tax deduction, reducing the tax paid by your super fund trustee on your concessional contributions and super earnings. The tax saving is often rebated to your super account, effectively reducing the premium cost by 15%.
Saving for a home deposit via your super. If you make voluntary contributions, you may be eligible to withdraw all or part of these contributions plus associated earnings for use as a deposit via the First Home Super Saver Scheme. Please note:
1. The maximum amount that can be withdrawn is $15,000 of voluntary super contributions per financial year made since 1 July 2017 (up to a total of $30,000 across all years). The amount that can be withdrawn is 100% of eligible non-concessional contributions, 85% of eligible concessional contributions, plus 85% of associated earnings. Tax is payable on the associated earnings and concessional contributions portion of the withdrawal (taxed at marginal tax rates, including the Medicare Levy, less a 30% tax offset).
Small business capital gains tax (CGT) concessions. If you are considering selling a small business or the assets it uses, you may be eligible for CGT concessions that help reduce the taxable capital gain associated with the sale, and build your super retirement nest egg in the process. Please note:
1. You may be able to contribute amounts from the CGT 15-year asset exemption and retirement exemption to your super, without using your non-concessional contributions limits.
Pension payments from your super. Pension payments from an accumulation phase transition to retirement income stream (TRIS) are generally tax-free if you are aged 60 or over. If you are under age 60, the taxable portion of pension payments is taxed at your marginal tax rate, less a 15% tax offset.

Super (retirement phase)
Investment earnings in your super. Investment income and capital gains are generally tax-exempt. Please note: The transfer balance cap, which is currently set at $1.6 million (indexed) per person, limits the amount of super benefits that can be transferred to retirement phase.
Pension payments from your super. Pension payments received from a retirement income stream (eg account-based pension or retirement phase TRIS) will be tax-free to you if you are aged 60 or over at the time of receiving the pension payment.

Super (accumulation or retirement phase)
Lump sum withdrawals from your super. Any lump sum withdrawals made after 60 years of age are generally tax-free. If you make a lump sum withdrawal and you are aged between preservation age and 60, the taxable component of the lump sum is taxed as follows:
1. The amount up to the low rate cap amount (currently $215,000) is tax-free.
2. The amount above the low rate cap amount is taxed at 15% (plus the Medicare Levy).
Passing away and your super:
1. A death benefit lump sum paid to a nominated beneficiary who is a tax dependant is received entirely tax-free. If the beneficiary is a tax non-dependant, then any tax-free component is tax-free, but the taxable component is taxed at 15% (taxed element) or 30% (untaxed element), plus the Medicare Levy.
2. Income payments from a reversionary death benefit income stream paid to a nominated reversionary beneficiary who is an eligible pension recipient dependant are received entirely tax-free if you or the reversionary beneficiary are aged 60 years or over at the time of your passing. If both you and the reversionary beneficiary are under 60 at the time of your passing, the pension payments from the reversionary death benefit income stream are taxed as follows:
  1. the tax-free component is tax-free, and
  2. the taxable (taxed element) component is taxed at marginal tax rate plus Medicare Levy, less 15% tax offset.

However, when the reversionary beneficiary turns 60, the pension payments from the reversionary death benefit income stream are tax-free.

Talk to us

Each tax fact outlined above isn’t covered in detail (only a brief snapshot is provided) and other important considerations go with each. For example, it’s important to consider things such as contribution eligibility, and conditions of release. To discuss how any of the 11 tax facts about superannuation may be relevant to your situation, give us a call. We would love to hear from you!

General Advice Warning

The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Mark O’Connell, Robin Bell and Allan Hall Financial Planning Pty Ltd are Authorised Representatives of Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323.

Is Super Worth the Hype?

Posted on 27 September 2021 | by Allan Hall

As Financial Advisers we talk about superannuation a lot.

So much so that it probably becomes a fuzzy word people don’t even hear any more. And the younger you are, the less interested you probably are.

But superannuation is super important. It is likely to be the biggest investment you will have in your lifetime, unless you own a mortgage-free home.

It’s also what will keep you afloat when you retire – which for some of us is a choice, for others it’s a choice made for us due to illness, or the inability to continue to carry out our normal work duties or due to financial hardship.

Without a regular deposit of wages or salary into your bank account, how will you afford to pay your bills, buy food and clothes and keep your car running? Have you have been lucky and wise enough to establish a few back-up options during your working years?

The Association of Superannuation Funds of Australia’s (ASFA) estimate of how much money you’ll need in retirement, depending on your lifestyle is in the table below. This is how much it estimates you need to have every single year you are retired.

ASFA Retirement Standard	Annual living costs
Couple – modest	$40,829
Couple – comfortable	$62,828
Single – modest	$28,254
Single – comfortable	$44,412

Source: ASFA Retirement Standard, for those aged around 65 (March quarter 2021, national)

There are also guidelines for the lump sum couples and singles need sitting in their superannuation account upon retirement for a comfortable lifestyle. These guidelines assume that the retiree/s will draw down all their capital, and receive a part Age Pension – which not everyone is eligible for, so it’s recommended you speak to your Financial Adviser about your situation.

Category	Savings required at retirement
Couple – comfortable	$640,000
Single – comfortable	$545,000

Source: https://www.superannuation.asn.au/ArticleDocuments/269/ASFA-RetirementStandard-Summary-2018.pdf.aspx?Embed=Y All figures in today’s dollars using 2.75% AWE as a deflator and an assumed investment earning rate of 6 per cent

If you know what your superannuation balance is currently, how old you are and approximately how many working years are left, you can use the above tables to figure out how you are tracking in terms of reaching a comfortable super balance to live a comfortable retirement lifestyle. Keep in mind these are averages and estimates. You, as an individual, may have higher needs, greater expectations of your retirement lifestyle, a desire to retire early or be disadvantaged by not receiving super when you have taken time out of the workforce to have children – all of these factors will impact the amount you will need tucked away in superannuation.

With all this information, what can you do about increasing your superannuation balance so you hit your target by retirement age? If you are currently employed you would be receiving the super guarantee from your employer which for many years was paid at 9.5% of your salary (unless you have an employer that pays above minimum, lucky you!) and rose to 10% on 1 July 2021. It is set to rise again to 10.5% on 1 July 2022.

In addition to the superannuation guarantee there are other options you can consider if you are eligible such as government co-contributions to super, spousal contributions, contribution splitting and the low-income super tax offset. Your Financial Adviser can have a conversation with you about how these strategies may help you increase your super balance.

Hopefully, this article has provided some useful information, and you’re hyped up to take greater notice of your super balance because when your working days are over, it’s going to really matter to you.

If you would like to discuss super strategies, or review your financial plan, we would love to hear from you.

General Advice Warning

Mark O’Connell, Robin Bell and Allan Hall Financial Planning Pty Ltd are Authorised Representatives of Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323.

ACT NOW to ensure your super is in order before 30 June 2025

Key actions covered in this update:

Personal Contributions

Concessional Contributions

‘Catch Up’ Concessional Contributions

Work Test

Non Concessional Contributions

Minimum Pension 2024/25

ACT NOW to ensure your super is in order before 30 June 2024

In this article:

Personal Contributions

Concessional Contributions

‘Catch Up’ Concessional Contributions

Non Concessional Contributions

Strategy Tip

Work Test

Minimum Pension 2023/24

What you need to know

There are legal, financial, and other changes your business will have to be across very soon. Not sure what they are or what to do? Don’t worry, we have you covered.

1. SUPER GUARANTEE INCREASES

2. WAGES GO UP

3. FAIR WORK COMMISSION CHANGES

4. PAID PARENTAL LEAVE CHANGES

5. CHILDCARE SUBSIDIES

6. DOMESTIC VIOLENCE LEAVE INTRODUCED

7. PENSION AGE AND ELIGIBILITY INCREASES

8. ENERGY BILL RELIEF ON ITS WAY

Tax & Superannuation Overview

Need help?

Cheaper healthcare more accessible for eligible self-funded retirees

Key points

What income counts?

What are the benefits?

Employer Contributions

Personal Contributions

Work Test Changes from 1 July 2022

Government Co-contributions

‘Catch Up’ Contributions

Minimum Pension Withdrawals

Related reading

Compared to other investment structures, super is widely considered to be one of the most tax-effective investment structures available from a wealth accumulation and cash flow generation perspective.

Although not a comprehensive list, below are 11 of the top tax facts about super.

Super investment structure

Overview

Super (accumulation phase)

Talk to us

As Financial Advisers we talk about superannuation a lot.

So much so that it probably becomes a fuzzy word people don’t even hear any more. And the younger you are, the less interested you probably are.