As we rapidly approach yet another end of financial year it may be timely for you to consider a little financial “housekeeping”. We have therefore listed a few important considerations depending on your own circumstances.
Firstly, for many individuals Superannuation is often an important consideration at this time of year. So, let’s look at some of the important issues remembering that this may not be relevant to your personal circumstances so it’s very important that you talk to your adviser to determine if they are relevant to you.
- The limit this year (21/22 FY) for personal deductible and employer super contributions combined is $27,500. Important to remember that some people are also claiming deductions on insurance policy premiums that are owned by super, this amount is also included in the $27,500 deductible/employer limit.
- For any contributions to count toward this financial year the contributions need to be made and cleared within the fund prior to 30th June 2022. We normally find that Super Guarantee employer contributions for June will hit your fund after 30 June and therefore only count toward next year’s limits. The same applies to last year’s contributions.
- In some cases, depending on your age, you will also need to meet a work test to make a super contribution.
- The employer super guarantee (SG) rate of super for this financial year is 10% increasing to 10.5% next year.
Other Contributions and Limits
- The Non-Concessional (tax-free) limit for this year is $110,000. Again, this must be deposited before 30 June. Please ensure you have not triggered the 3 year bring forward rule in the previous 2 financial years.
- The cap on the amount of total superannuation that can be converted to a pension is $1.7mil this financial year, for new pensions only.
- The work-test for Non-Concessional Contributions (NCC) has been removed for those aged 65-74. If you or your friends and family fall into this age bracket, speaking to a Financial Adviser now would be of particular benefit.
- It’s important to ensure that you have taken the minimum pension prescribed for 21/22 FY. This rate of pension depends on a combination of your balance as at the start of the financial year as well as your age. Please contact us if you are unsure what this amount is.
- The temporary pension drawdown of 50% has been extended for another 12 months.
New Age Threshold For Downsizers
- The eligibility for downsizer contributions will be lowered from age 65 to 60 in 22/23 FY, allowing retirees to contribute up to $300,000 to their super following the sale of their home. Couples will be eligible to contribute up to $300,000 each. It’s important to note that proceeds from the home sale that are transferred to super accounts will be included in the asset test for Age pension but the principal place of residence will remain exempt from the asset test.
If you would like to discuss any of the above subjects, please call the office on 08 6462 0888.