30 June. It marks, among other things, the cut-off date to make personal super contributions to your account for the financial year.
Personal contributions are voluntary contributions members make into their super fund in addition to the compulsory contributions made by their employer (currently 9.5% of someone’s salary).
Some people may choose to make personal contributions into their super in order to:
· Try and boost their retirement savings
· Claim as a personal tax deduction to reduce their total tax liability (more on this below).
Follow these 3 steps:
Personal contributions are made as non-concessional contributions. They are not taxed when they go into an account, because they come from income that was already taxed by the government, e.g. a salary.
However, you may be able to claim personal super contributions as a personal tax deduction. This will mean that your personal contributions become concessional contributions and 15% tax is withheld by the super fund to be paid to theATO.
This could then potentially reduce an individual’s income tax liability when lodging a tax return.
To submit a claim, you must complete and submit a Notice of Intent to claim or vary a personal tax deduction form to firstname.lastname@example.org.
Yes, you need to be under 65 to make a personal contribution. If you are between 65 and 74 you must pass the ‘work test’ of working more than 10 hours per week to make a personal contribution.*
As of 1 July 2019, the government introduced an exemption to this rule. If someone is between the ages of 65-74, met the work test last financial year, and had a balance under $300,000 as of 30 June the previous financial year, they may be eligible to make voluntary contributions for the next 12 months.
It depends. You can set up a regularly occurring payment but you must use the same amount, frequency and payment reference when transferring money. However, if you make contributions of varying amounts on varying frequencies, you will need to complete a new personal contribution form each time you make a contribution.
Yes, personal contributions count towards your contributions caps. Non-concessional contributions will be attributed to your $100,000 non-concessional contribution cap per annum.
If you choose to claim a tax deduction for a personal super contribution, the contribution will be counted towards your concessional contributions (before-tax) cap of $25,000.
You may be eligible to bring forward unused non-concessional contribution caps from previous financial years if you’re under 65 and meet the general requirements to do so. For more information please read the ATO’s website.
Additionally, you may also be able to carry forward your unused concessional contributions cap to the next financial year if your balance is less than $500,000 at the end of June in the previous financial year. For more information on eligibility, the ATO’s website has a useful guide.
Please note: all information provided is general in nature and should not be considered personal financial advice as we have not considered your personal circumstances. We recommend you speak to a qualified financial adviser for personal advice.
*Please confirm you are eligible to make contributions to Future Super.