Important changes to the superannuation rules

Concessional contributions caps 2017/18

With the new financial year underway, it’s a great time to get your salary sacrifice arrangement in place – on top of the regular super guarantee payments made by your employer. This way you’ll be able to maximise your concessional contributions and minimise your tax burden over the course of the next financial year.

However it is important to note that from 1 July 2017, the general concessional contributions cap will drop to $25,000 for all ages.

The higher cap of $35,000, for those who are aged 49 years or older on the last day of the previous financial year (30 June), will not apply from the 2017/2018 year onwards.

Tax deductions for personal super contributions

After 1 July 2017, if you are employed and under 75 years of age, you could claim an income tax deduction for any personal (after-tax) super contributions you make in a financial year.

These amounts will then count towards an individual’s concessional contributions cap and be subject to 15 per cent contributions tax in the fund.

This could help if an employer doesn’t offer the ability to salary sacrifice contributions to super. It could also assist people who are partially self-employed or earning partial wages or salary, which could be through part-time or casual work.

Currently, if you are employed during a financial year, you can claim a tax deduction for personal (after-tax) super contributions you make if the employment income you receive is less than 10% of the income generated from all sources. This test is being abolished from 1 July 2017.

To access the tax deduction, individuals will lodge a notice of their intention to claim the deduction with their superannuation provider. Generally this notice will need to be lodged before they lodge their income tax return. Individuals can choose how much of their personal superannuation contribution to claim a deduction for.


Spouse contributions

Currently, if you make contributions into your spouse’s super account on their behalf you are entitled to a tax offset of up to $540 provided you meet certain conditions.

One of these conditions is that your spouse’s total income (assessable income, reportable employer super contributions and reportable fringe benefits) must be less than $10,800 in the financial year.

From 1 July 2017, the lower income threshold will change from $10,800 to $37,000 (and cut out at $40,000). This means that more contributing spouses will be able to access the tax offset.

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