New rules for Super Contribution
When
you think of super, it may feel so out of reach that people might be assuming
it will be like a pot of gold awaiting them during retirement. That might not
be the case if you aren’t aware of what is going on. There’s no doubt that most
young people are not engaged with it when they should be. A great article by
Caitlin Fitzsimmons goes into this further here on how important it is to get your super
right or see more on our blog ‘Why your Superannuation is still Important when you’re Young’
It’s
also important to keep up to date with the new rules so you can feel in control
of your decisions and any actions to take.
Below
are the new updates on super contribution from 1 July 2017.
All
employees are now eligible to claim personal tax deductions on contributions
Prior
to 1 July 2017, only established self-employed taxpayers or taxpayers that had
little employment income were eligible to claim personal tax-deductible for
their voluntary superannuation contributions.
This
was due to a rule which prevented you from claiming a tax deduction if 10% or
more of your total assessable income came from employment sources.
This
rule has now been removed, meaning you could be eligible to claim personal tax
deductible on voluntary contributions at any time throughout the financial
year, right up until 30 June (depending on your circumstances). This also means
you don’t need to arrange a salary sacrifice with your employers to contribute
or add more if your circumstances allow.
Raiz
also allows you to make voluntary contributions to your superannuation directly
from the App for a range of Super Fund Providers. If your Super Fund provider
is not listed in the App, please let us know and we will get it listed.
Now
your savings in Raiz may be tax deductible*.
Raiz Super is also now available. Engaging, affordable superannuation. You can now invest in the same 6 Raiz portfolios and view all your investments in one place, on your mobile phone. For more information on Raiz fees, click here.
The
new Concessional Contribution cap
Concessional
contributions are the contributions made to your super before your income tax
is taken out. Moving forward, this cap has been reduced to $25,000 and applies
to all taxpayers, regardless of age. In future years, this cap will be indexed
in increments of $2,500.
This
cap includes compulsory employer contributions (SG 9.5%), pre-tax salary
sacrificed super contributions you have arranged with your employer, and any
voluntary contributions you have made.
Rolling
over unused contribution cap
Off
the back of this cap and the ability now for all employees to do tax-deductible
voluntary contributions, there is also a new super rule that allows for a
‘catch up’ claim of unused concessional contributions for following years.
What
this means is that if you don’t use up the full amount of your concessional
contribution cap of $25,000 in a year, the unused amount will be rolled over
and accumulated over a rolling 5-year period. This may provide opportunities to
make higher voluntary contributions in a future year.
For
all these new rules, there are certain eligibility criteria, which are not
trivial, so you do need to check with a tax advisor before deciding to make
voluntary contributions and claim a deduction.
In
additional to these new announcements, for more info on how to use your super
in the future for your first home deposit (1 July 2018), check out the
news here
Don’t have the Raiz App?
Download it for free in the App store or the Webapp below:
Important Information
The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the product.
A Product Disclosure Statement for Raiz Invest and/or Raiz Invest Super are available on the Raiz Invest website and App. A person must read and consider the Product Disclosure Statement in deciding whether, or not, to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.
The information may be based on assumptions or market conditions which change without notice. This could impact the accuracy of the information.
Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz Invest or Raiz Invest Super.
Past return performance of the Raiz products should not be relied on for making a decision to invest in a Raiz product and is not a good predictor of future performance.
*
For the new rules, there are certain eligibility criteria, which are not
trivial, so you do need to check with a licensed tax adviser (or other) before
deciding to make voluntary contributions and claim a deduction.
