YOUtax Blog

Budget 2018: Superannuation

Posted by Rebel Beckett on Jul 11, 2018 10:50:15 AM

Concessional Contribution – pre-tax contributions

Non-Concessional Contribution – after-tax contributions

Spouse Contributions Offset

For the 2016-17FY, when you contribute to your spouse’s eligible super fund you could claim a maximum of $540 as a tax offset, so long as your spouse’s total assessible income did not exceed $10,800. The maximum offset amount gradually reduces for income exceeding $10,800 and completely phases out when income reaches $13,800.

As of 2017-18FY the spouse income threshold will be increased from $10,800 to $37,000. The maximum amount will gradually reduce for income exceeding $37,000 and completely phases out when income reaches $40,000.

If your spouse exceeds their non-concessional contributions cap for that year or has a total super balance equal to or greater than the $1.6 mil general transfer balance cap then you will not be eligible for the tax offset.



Personal Super Contribution Deductions

For the 2016-17FY, an individual (mainly sole traders) could claim a deduction for personal super contributions so long as their income from salary or wages was less than 10% of their total income (among other conditions).

As of July 2017, the 10% maximum earnings condition has been removed allowing individuals under age 75 to claim a tax deduction for personal super contributions.

The contributions claimed as a deduction count towards your concessional contributions cap. In the event your cap is exceeded, you will be liable for extra tax and the excess contributions will count towards your non-concessional contributions cap.

Furthermore, other conditions apply such as age restrictions, work test and the individual must complete a Notice of Intent to Claim a Deduction form and submit to your personal fund.

The government have proposed to improve the integrity of the Notice of Intent processes for claiming personal super contributions. Despite being required to; some individuals currently receive deductions on their personal contributions but have not submitted a notice of intent. This results in the super fund not applying the appropriate 15% tax to their contribution, as the contribution has been deducted from the individual’s income, no tax is paid on it at all.



Low Income Superannuation Tax Offset (LISTO)

The LISTO was introduced July 2017 to replace the Low-Income Superannuation Contribution (LISC).

As of July 2017, eligible people with an assessible income of up to $37,000 will receive the LISTO equal to 15% of their total concessional super contributions capped at $500. LISTO will be paid directly to your super fund account upon the lodgment of your tax return.



Division 293 Income Threshold

As of July 2017, the government lowered the Division 293 income threshold from $300,000 to $250,000. Individuals with income and concessional super contributions exceeding the $250,000 threshold will have an additional 15% tax imposed on the income difference.



Concessional Contributions Cap

As of July 2017, the concessional contributions cap will be reduced to $25,000 per annum. You will be able to carry forward your unused balance to access your unused concessional contributions cap on a rolling basis for 5 years. Amounts carried forward that have not been used will expire after 5 years. The carry forward concept is not eligible for people with a total superannuation balance equal to or greater than $500,000.


Non-Concessional Contributions Cap

As of July 2017, the annual non-concessional contribution cap will be reduced from $180,000 to $100,000. Your non-concessional contribution cap is NIL if your super balance is greater or equal to the general transfer balance cap of $1.6 mil.


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