EOFY Superannuation Considerations

Here are some key considerations and actions that you can take to ensure your superannuation strategies are effective, and your savings are maximised.

Changes in contribution limits

Making sure that your contributions are made by Wednesday 27 June will ensure they are received in time, as this year the 30 June falls on a Saturday.
  • The first step is to review if you have any funds available to contribute to super before 30 June and to determine whether your total contributions made to super do not exceed the following caps:
Type of contribution Age at 1 July Contribution Limit
2017-18
Concessional (pre-tax) Age <50 $25,000
Age >50 $25,000
Non-concessional (after-tax) Age >65 $100,000

Those aged between 65 and 75 will need to meet the work test to be eligible to claim the deduction.

The 10% Rule

From 1 July 2017, most individuals under the age of 65 are able to claim a tax deduction for personal superannuation contributions, regardless of their employment status.

The amount of personal deductible contributions that an individual can make is effectively limited to the concessional contributions cap, which includes any superannuation guarantee (SG) payments made by their employer during the financial year. The current rate of SG is 9.5%.

For example, John has had $15,000 contributed to super by his employer under the super guarantee scheme, he can contribute a further $10, 000 and be eligible for a tax deduction. The amount of deduction is limited to your taxable income and cannot give rise to a tax loss.
 
If you wish to obtain a deduction for personal contributions, you must complete and lodge a notice of intent with your fund and receive acknowledgement from the fund within a specific time frame. If you are unsure then be sure to contact the Moore Stephens team who will be happy to assist.

New eligibility criteria for the non-concessional contributions cap

From 1 July 2017, to be eligible to make additional non-concessional contributions, individuals must not have a total superannuation balance that is greater than or equal to the $1.6 million transfer balance cap. Any additional non-concessional contributions will be considered excess non-concessional contributions and subject to excess contribution penalties.

The table below highlights eligibility criteria for non-concessional contribution caps for the 2017-18 financial year.
 
Age of member Total superannuation balance at 30 June 2017 Maximum non-concessional contributions cap
Under 65 Less than $1.4m $300,000 (over 3 years)
$1.4m to under $1.5m $200,000 (over 2 years)
$1.5m to under $1.6m $100,000 (over 1 years)
$1.6m or greater Nil
65 and above
(work test must be met)
Less than $1.6m $100,000 (over 1 years)
$1.6m or greater Nil
 

Minimum Pension

If you’re in pension phase, you must ensure the minimum pension has been paid to you by 30 June. If you do not meet this, your fund will be subject to 15% tax on your pension investment income, rather than being tax-free. Your minimum pension for the 2018 financial year is determined by multiplying your pension account balance as at 1 July 2017 by the percentage factor, based on your age from 1 July 2017.

A breakdown of the percentage factors for each age range, is below.
Age Percentage factors
Under 65 4%
65-74 5%
75-79 6%
80-84 7%
85-89 9%
90-94 11%
95 or more 14%

Superannuation assistance

Superannuation is complex, but implementing the right actions and strategies before June 30 is vital to ensure your superannuation savings are maximised. If you require any assistance, the Moore Stephens team is here to help, feel free to contact Charles Page or Stephen Lennon for any superannuation assistance.