Super time to cash in
LOOK AT ALL THE OPTIONS TO ENSURE YOU MAKE THE MOST OF YOUR MONEY
Tasty tax refunds await superannuation fund members who can use the final days of the financial year to tweak their savings strategy. Others are in line for a significant boost to their super contributions from July 1, and everyone is being urged to check they have been receiving the money they are entitled to.
Tax-deductible contributions of up to $27,500 are allowed for most super-savers each year, with this cap including compulsory employer contributions and salary sacrifice. So a worker earning an average $90,000 salary potentially has room to pump an extra $18,500 of their own concessional contributions into super – then claim a tax deduction for it.
This money must be received by their super fund by June 30 to qualify for this financial year. Most funds say they cannot guarantee that BPAY and other transfers not made before June 24 will be processed in time, but several will allow people to pay in person or by direct transfer up until June 30, so it’s wise to check with your fund immediately.
“If your contribution isn’t processed by your fund by 30 June the contribution may be allocated to your next year contribution cap,” says dmca advisory financial adviser Alison Stanbridge.
She says people who make these extra contributions must also send their super fund a “notice of intent to claim a deduction” so the money is given the correct tax treatment by the fund.
GAME OF CATCH-UP
Australians are also able to make extra contributions by carrying forward previous unused portions of their concessional contributions cap.
Stanbridge says this practice has been popular among both younger and older clients of dmca, with people welcoming the flexibility.
“You can use unused caps from up to five previous financial years – however, the unused cap amounts only started accruing from 1 July 2018,” she says.
UniSuper advice manager Adam McCarthy says using carry forward concessional contributions is his top tip for tax planning, but warns it is only available to people whose super balance was below $500,000 at June 30, 2021.
“Tax time is a great opportunity to reassess your financial strategy, and superannuation should be a core consideration,” he says.
McCarthy says people can also receive a $540 tax offset by contributing $3000 after-tax to the super account of a spouse who earns below $37,000 a year.
“And should you be earning less than $41,112 per annum, consider making an after-tax contribution of up to $1000 to your super fund to qualify for a government cocontribution of up to $500,” McCarthy says.
ARE YOU BEING PAID?
Industry Super Australia says unpaid super affects more than a quarter of employees and costs workers more than $4.5bn each year, so people should check their super account to ensure they’ve been paid the correct amount.
For 2021-22 minimum employer contributions are 10 per cent of wages. Check your super fund account online, or examine member statements, and speak with colleagues, your employer or your super fund if concerned.
Receptionist Kirsten Priess, 24, looks at her super account up to three times annually – including around the end of the financial year.
“I check that my super is being paid by my employer – due to situations in the past, I always double-check,” she says.
“I know women usually end up
with less super and that might be something I worry about in future – it’s just not as much of a concern right now because I am working full time.”
POSITIVE CHANGES
Issues around women having less super will be partly addressed from July 1 when the $450 minimum monthly income threshold for compulsory super payments is removed, meaning many lowerincome workers with part-time jobs will now receive super.
The compulsory Superannuation Guarantee of 10 per cent rises to 10.5 per cent on July 1, on its way to 12 per cent by 2025.