Consider your Super before EOFY

Your superannuation policy update in preparation for the end of the financial year

With the re-election of the Coalition government, there is hope in the industry that a policy of stability for superannuation will prevail. This will allow you to focus on managing your financial needs rather than worrying about changing rules.

Before the election, the Coalition did announce some tweaks to the superannuation system that are anticipated to be implemented in the future:

• From 1 July 2020, Australians aged 65 and 66 will now be able to make voluntary superannuation contributions without meeting the work test. Previously this was only available to those below 65.

This change is proposed to apply to bring-forward arrangements allowing individuals to make up to three years’ worth of non-concessional contributions in a single year after 65.

• Increasing the age limit for individuals to receive spousal contributions from 69 to 74.
• Streamlining administrative requirements for calculating exempt current pension income.
• Increasing the maximum number of Self-Managed Superannuation Fund’s (SMSF) members from four to six.

With the end of financial year now fast approaching, and certainty with the Government and its superannuation policies, it is time to ensure everything is in place for your superannuation before 30 June. Below are some strategies that you may need to consider, depending upon your personal circumstances:

• Contributions Caps – review the contributions received to date by your superannuation fund and confirm with your employer the timing of any further contributions before 30 June. Please note, contributions are included in the financial year they are received into the Fund’s bank account. With 30 June falling on a Sunday this year, it would be prudent to make your contribution by Monday 17 June for employer contributions going through a clearing house, or Wednesday 26 June for personal contributions, to ensure they are received by the fund prior to the end of the financial year.

Contributions caps for the current year are $25,000 for concessional (before tax) contributions and $100,000 for non-concessional (after tax) contributions.

• Personal contributions – individuals are now able to claim a deduction for personal contributions. To claim this deduction you should ensure that you are eligible to contribute to superannuation, make the relevant contributions to the fund before 30 June and lodge a notice with your superannuation fund confirming your intention to claim a deduction.
• Co-Contributions – if you meet the relevant work tests and earn less than $52,697, it is worth considering if you can take advantage of the Government’s super co-contribution.
• Pension Payment – if you are in pension phase, ensure the minimum pension amount has been paid before 30 June.
• Payment of expenses – if you manage a SMSF and are in accumulation and/or have a large income item for the 2019 financial year, it may be beneficial to ensure any expenses are incurred and paid before 30 June to ensure they are deductible in the current financial year.
• Rebalancing accounts between spouses – the end of financial years is the perfect opportunity to rebalance pension account between spouses to ensure that balances are as even as possible and maximise the use of the $1.6 million transfer balance account cap.

If you have any questions or would like further information, ensuring you and your fund is well prepared for the end of the financial year and beyond, please call our superannuation division to arrange a time to meet and discuss your particular requirements in more detail.