Superannuation issues are some of the most important considerations to keep in mind as the end of the financial year approaches.
Spouse contributions
The spouse super tax offset allows higher earning taxpayers who contribute super for their non-working or low income earning partners to be eligible for a tax break.
To be eligible for this benefit the lower earnings spouses’ income, total reportable fringe benefits, and reportable employer superannuation must have been less than $13,800 in the financial year.
Salary sacrifice
A salary sacrifice arrangement is where an individual agrees to forego part of their future salary or wages in return for their employer providing benefits of a similar value. Salary sacrifice contributions count towards an individual’s concessional contributions cap.
Government co-contributions
The Government co-contribution scheme is an initiative for Australians to make a bigger commitment to their super savings and to give individuals more money to add to their superannuation fund.
Eligible Australians who earned less than $33,516 in the 2013/2014 financial year will receive 50 cents for every dollar, up to a maximum of $500, of after-tax money that they contribute to their super account.
Individuals who earn over $33,516 will have their Government co-contribution reduced by around three cents for every dollar over that amount, up until it reaches zero at $48,516.
To be eligible individuals must under 71 years, and make at least one personal super contribution and be a permanent resident or citizen.
Concessional contributions
The 2014-15 financial year will see an increase in the concessional contributions cap. The present cap of $25,000 will increase up to $30,000.
The indexation will not apply to the temporary higher cap of $35,000 currently available to those individuals 59 and over as at 30 June 2013 (for 2013-14). However, the temporary higher cap will extend to individuals who are 49 and over as at 30 June 2014, and will apply for the 2014-15 financial year.
Non-concessional contributions
The indexation of the concessional contributions caps has some flow-on effects the non-concessional contributions cap. Therefore, from 1 July 2014 the non concessional contributions cap will increase from $150,000 to $180,000.
Call the team at Leenane Templeton if you wish to discuss super contributions further.
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