New rules for Super Contribution - Raiz Invest

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.

 

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

 

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 Raiz product.

The
information in this website is confidential. It must not be reproduced, distributed
or disclosed to any other person. The information is based on assumptions or
market conditions which change without notice. This will 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.  

Past
return performance of the Raiz product should not be relied on for making a
decision to invest in Raiz 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.

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