The end of another financial year is almost upon us, and with super changes happening, this year is more important than most. Here are some of the things you may need to consider in the lead-up to, and following 30 June:

Make your pension payments

If you’re drawing pensions from your super fund, you need to make sure that you take the minimum pension. Failure to do so will mean that your pension won’t qualify for tax exemption on its earnings. Apart from costing you tax, this year it may also impact your ability to take advantage of transitional capital gains tax relief.

Make personal contributions

With contribution rules changing after 30 June, the current financial year is important for:

  • Concessional contributions

This is the last year you can contribute $35,000 if you’re over 50, and $30,000 if you’re under 50. The limits will be lower next year, so try and take advantage of these more generous limits while they’re still available.

  • Non concessional contributions

The limits are reducing from $180,000 to $100,000 annually, so the current year provides an opportunity to make large contributions before this change. Importantly, those with a total super balance above $1.6 million will not be allowed to make non-concessional contributions after 30 June, so this is their last chance ever.

  • Make a co-contribution

If your income is under $51,021, a co-contribution is available if you make an after tax contribution to super. That is, the government will make a contribution of up to 50c in every dollar contributed, up to a maximum of $500.

Review your salary sacrifice

With the concessional contribution limit reducing, if you are salary sacrificing you will need to review how much you are contributing. In doing this, you need to be aware that the total of the super guarantee and salary sacrificed contributions cannot exceed $25,000. For those who have defined benefit super schemes, the notional contributions that will be assessed against your cap will change, so a full review of your contribution strategy will be required.

Should you split your contributions?

Under the new rules, it may be advantageous for couples to try and have their respective super balances as even as possible. You could, therefore, consider splitting your after tax concessional contributions with your spouse, in order to facilitate this.

Should you continue your Transition to Retirement Pension?

Although these pensions (commenced by someone who isn’t retired) will continue, the tax exemption will cease. While this benefit is lost, it may still be worthwhile continuing the pension. This will depend on the purpose of starting the pension in the first place and your overall strategy.

Don’t miss any opportunities!

As you can see, the end of a financial year can bring with it many important decisions. And as this year is one of change, a failure to plan can result in missed opportunities. That’s why we encourage you to speak with your adviser to ensure that you adapt your strategy for the new financial year.

If you would like more information please call 1300 ELSTON or email info@elston.com.au and an adviser will be in touch.