With the start of the new financial year, all the previously announced changes to the superannuation rules came into force. One of these changes is the reduction in the concessional contribution cap to $25,000. This new limit applies to everybody irrespective of age. Individuals aged 65 or over must still satisfy a work-force participation test in order to contribute.
Because of this decrease it is important for people to review any salary sacrifice arrangements they have in place with their employers. Crucially, the employers compulsory contributions of 9.5% need to be taken into account to ensure there are no excess contributions.
Another important change is the increased ability for individuals to claim tax deductions in their personal tax for superannuation contributions. The previous restriction on employees (who received more than 10% of their income from an employment source) from making personal concessional contributions has been removed. This provides everybody with the same opportunities to receive the tax benefits of superannuation contributions including people whose employers did not offer salary sacrifice arrangements.
If personal tax deductions are wanting to be claimed for superannuation contributions it is essential that the correct documentation be completed and provided to the individual’s superannuation fund.
If you have any questions regarding how the new legislation impacts your superannuation please contact your usual Hanrick Curran specialist or, alternatively, call Clive Todd or Frances Hill on 07 3218 3900.
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.