We wanted to bring your attention to some updated superannuation rules that came into effect on 1 July 2017 that may create new opportunities this financial year for you, your friends or members of your family.

What is it?

For personal superannuation contributions made on or after 1 July 2017, you no longer have to earn less than 10% of your income from employment (or not have been employed during the financial year) to be eligible to claim a tax deduction. This makes the tax deduction potentially available to those who earn 10% or more of their income from employment for the first time.

This opens up the opportunity to claim a tax deduction for those who:

  • are under the age of 75, and
  • are eligible to contribute to superannuation, and
  • have room left in their concessional contributions cap and
  • have enough assessable income to be able to use the tax deduction.

How do you claim the deduction?

To be eligible to claim the super contribution as a tax deduction, you need to submit a valid ‘Notice of Intent’ form. You will also need to receive an acknowledgement from your super fund before you complete your tax return, start a pension or withdraw or rollover money from the fund to which you made your personal contribution.

Make sure you can utilise the deduction

It is generally not tax-effective to claim a tax deduction for an amount that reduces your assessable income below the threshold at which the 19% marginal tax rate is payable, under $18,200. This is because you would end up paying more tax on the super contribution than you would save from claiming the deduction.

What next?

Step 1 – Find out from your employer or Superannuation fund the total contributions you have made that are included in the $25,000 cap – This includes employer and salary sacrifice contributions.

Step 2 – Check your income is above $18,200.

Step 3 – Have cash that you can contribute to super, remember it’s locked up until retirement.

Step 4 – Organise to make the contribution to your super fund and ensure you complete the ‘Notice of Intent’ form.

Get help if you need it. If you have any questions or need any help, let us know.