Understanding the super rules from July 2012

With the new Financial Year almost upon us, it is worth a quick review of what the superannuation contribution rules look like before and after 30 June.

2011/12 Financial Year
2012/13 Financial Year
Over 50’s Concessional Contributions Cap
$50,000 limit
$25,000 limit.
Was hoped this would be extended for over 50’s with <$500,000 of super, but proposal has been delayed 2 years.
Under 50’s Concessional Contributions Cap
No change, $25,000
Government Co-Contribution
Dollar matching, maximum $1,000 for incomes below $31,920, phasing out to nil at $61,920
50c matching, maximum $500 for incomes below $31,920, phasing out to nil at $46,920
Low Income Government Superannuation Contribution
A government payment to super, max $500, being a refund of contributions tax for individuals earning up to $37,000
Note 9% compulsory super x $37,000 x 15% contributions tax = $499.50
Contributions tax rate (high earners, assuming within Concessional Contribution limit)
15% (+ 15% where income exceeds $300,000)
Note: where Concessional Contribution limit is exceeded, the excess amount is taxed at a total rate of 46.5%
Tips leading into the new financial year:
  • Over 50’s should revisit their super contribution arrangements in light of the reduced cap.
  • Similarly, those earning between $46,920 and $61,920 who were previously targeting the government co-contribution will now find themselves missing out, and should reassess.
  • Over 55’s who have implemented a Transition to Retirement Income Swap strategy should revisit their plan with their adviser, to ensure optimal draw down and contribution rates.
  • High earners, in view of the additional tax, may need to review their overall retirement savings plans and consider whether greater non-super or after-tax super contribution strategies are worth investigating.
As always, to assess what these changes mean for you in greater detail, please contact AGS Financial Group.

Published : 16 Jun 2012

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