No-one wants to pay more tax than they have to. But did you know there are a number of superannuation contribution strategies that will help improve your overall financial wellbeing AND reduce your taxable income?

As we head (quickly) towards the end of this financial year, it’s definitely worth speaking to your financial adviser to discuss your options. Different strategies suit different situations – this is something your adviser will understand and take into consideration. Some opportunities need to be implemented before June 30th, while others can be incorporated into your EOY financials, so it is important to plan ahead.

Here is a brief outline of how super contribution strategies can assist your tax situation.

Voluntary Salary Sacrifice:

• Best suited to people with a fixed salary or predictable income

• Even if you are already salary sacrificing, it’s worth checking the amount of your contribution and making adjustments where required

Deductible Super Contribution:

• Best suited to people who work casually, on contract, or freelance

• You make a personal contribution to your super, then lodge a NOI (Notice of Intent) to claim part or all of the contribution as a tax deduction

Catch-up Concessional Contribution:

• Good preparation for retirement

• Contribution limit is $25,000. If it is only partially used, the balance can be transferred during the next financial year if the total superannuation amount is less than $500K.

• Not everyone is eligible – be guided by your adviser

Super Contribution Splitting:

• This strategy can be implemented at the end of the financial year

• You can split up to 85% of your concessional contribution with your spouse to maximise the benefit to you both

• Advantages are worth exploring with regards to aged pension, early access to super benefits and creating collective super within a couple

Spouse Contribution Tax Offset:

• Suitable if your spouse has an assessable income of less than $40K

• You may be eligible to make a super contribution on their behalf and claim an 18% tax offset up to $3K

Super Co-Contribution:

• Suited to lower-to-middle income earners

• This provides the opportunity to effectively receive a guaranteed 50% return on your contribution

• If your total income is less than $53,564 and you make a personal super contribution, you may be eligible for a matching benefit of up to 50% of the amount (maximum $500)

Non-Concessional Contribution:

• Not eligible if the Transfer Balance Cap (TBC) is greater than $1.6M

• TBC is the limit applied to super income streams that receive concessional tax treatment

• If you have suffered large losses (such as those experienced due to Covid-19), you may be eligible to apply to make a non-concessional contribution

Pension Refreshing Benefits:

• Your financial adviser will assess and walk you through the potential benefits of refreshing your pension strategy, with regard to creating tax free options and improving your existing aged pension

Early Release Super Benefits:

• As you may have heard, people who have been affected by the recent pandemic through loss of income or employment, are eligible to access a portion of their super

o   $10,000 before July 1st

o   $10,000 from July 1st until September 24th

Simply, there are a variety of superannuation strategies available to reduce your tax liability, increase your super contributions and reduce your personal income tax. Discussing these options with your financial adviser will help ease any EOFY stress you may be feeling, and ensure that your current and future financial wellbeing is optimised as we look forward to the upcoming financial year.

General Advice Warning: The information in this communication is provided for information purposes and is of a general nature only. It is not intended to be and does not constitute financial advice or any other advice. Further, the information is not based on your personal objectives, financial situation or needs. You are encouraged to consult a financial planner before making any decision as to how appropriate this information is to your objectives, financial situation and needs.