The contribution caps this year are again $25,000 for concessional contributions and $100,000 for non-concessional contributions. The bring-forward cap for non-concessional contributions also remains at $300,000.
When making non-concessional contributions, including utilising the bring-forward rules, you will need to consider your total superannuation balance.
If making up to $100,000 in non-concessional contributions, your total superannuation balance must be under $1.6m at 30 June the previous year. Where utilising the bring-forward provisions, restrictions start being imposed from where your total super balance exceeds $1.4m.
Anyone making large superannuation contributions should exercise extreme care to avoid excess contributions. Making sure you do not exceed the contribution caps will save you both money and time of dealing with excess contributions.
Timing of Contributions – if it is not received by the super fund, it is not deductible
To secure a tax deduction for any concessional contribution for the year ending 30 June 2019, remember that all contributions must be received into the super fund’s bank account by 28 June 2019 (30 June falls a Sunday).
This applies to employers making contributions on behalf of employees and for individuals who make a concessional contribution with the intention of claiming it as a deduction in their personal tax return.
Personal superannuation contributions
Most people regardless of their employment arrangement, can claim a deduction for personal super contributions they make to their fund until they turn 75.
Individuals who are aged between 65 and 75 will need to meet the work test to be eligible to claim the deduction.
If you wish to claim a tax deduction for personal contributions made to your super fund, you must complete and lodge a notice of intent with your fund within the required time frame, and have this notice acknowledged (in writing) by your fund. Any contribution also needs to be received by your fund before June 30.
If you are 65 years old or older, you must meet the work test before making any contributions to your fund.
This means you must work at least 40 hours in a 30-consecutive-day period before you can make contributions.
If you are 75 years or over, only mandated contributions (ie Super Guarantee) can be made.
Not making your full superannuation contribution? Now you can catch up
This year is the first year of new measures that enable people who have been out of the workforce, like new Mums, to top up their superannuation.
If you have:
- A total superannuation balance below $500,000 as at 30 June; and
- Not utilised your entire concessional contributions cap ($25,000) for the year
then you can ‘carry forward’ the unused amount on a rolling 5-year basis.
For example, if your total concessional contributions in the 2018-19 financial year were $10,000 and you meet the eligibility criteria, then you can carry forward the unused $15,000 over the next 5 years. You may then be able to make a higher deductible personal contribution in a later financial year. If you are selling an asset and likely to make a taxable capital gain, a higher deductible personal contribution may assist in reducing your tax liability in the year of sale.
- Your total superannuation balance must be below $500,000 as at 30 June of the prior year before you utilise any carried forward amount (within the 5 year term); and
- In some cases, an additional 15% tax can apply (30% total) to concessional contributions made to super where income and concessional contributions exceeds certain thresholds ($250,000 in 2018-19). Your income could be higher than usual in the year when you sell an asset for a capital gain.