Time running out to take advantage of higher super contribution caps

The SMSF Association has warned SMSF members wanting to take advantage of the higher concessional and non-concessional contribution caps ending on 30 June 2017 that the money needs to be in their SMSF bank account before the end of the financial year.

“Trustees sometimes leave it until the last minute to make either concessional or non-concessional contributions, only to discover they have left it too late and those contributions become part of the following financial year’s contribution cap,” said SMSF Association CEO John Maroney. Read more...

Super contributions down on uncertainty on policy and slow wages growth

Total superannuation contributions are down over the past twelve months, likely due to uncertainty around policy settings and slow wages growth, according to the FSC/USB State of the Industry report 2017.

The report says that total contributions over the past twelve months are down 1.1% from previous levels, with employer contributions up 0.3% but failing to offset a 1.5% decrease in member contributions.

FSC and UBS ascribe this to slower wages growth and the recent uncertainty around superannuation policy. Read more...

SMSF contributions almost triple ahead of 1 July 2017 changes

Contributions to SMSFs almost tripled in the December quarter of 2016 according to the most recent SuperConcepts SMSF Investment Patterns Survey.

The survey indicates contribution levels to SMSFs increased to $8,550 in the December 2016 quarter – the same quarter that superannuation legislation passed the Parliament – compared to $3,040 in the September quarter.

SuperConcepts Executive Manager Technical & Strategic Solutions Phil La Greca said the increase in contributions was not surprising and anticipated contribution levels to continue to grow up to the changes taking effect on 1 July 2017. Read more...

What is the purpose of super contributions data pass through?

ASFA Superannuation contributions pass through data - SuperStreamASFA, the Association of Superannuation Funds of Australia, has asked what is achieved by proposed regulations which will require super funds to pass through contributions data submitted by employers.

“The release of the draft regulations is the first public indication that the government is giving serious consideration to regulating such a requirement,” said ASFA.

Easier employer contributions reporting under draft regulations

Treasury has released exposure draft regulations for consultation to make employer reporting of contributions data simplerThe Treasury department has released draft SuperStream regulations for consultation which would reduce the number of different super funds too which employers will need to report contributions data. These changes, if registered, would mean that from 1 July 2015 employers would only have to report contributions data to their default super fund, and that fund would give the data to any other applicable super funds.

From 1 January 2014 only super funds with a MySuper product can be an employer’s default super fund. Currently employer must give information about their employees and contributions to their default super fund and any other super funds their employees have chosen. Increasingly this is done under the SuperStream standard. As the Treasury says, this means: Read more...

Work Test for superannuation contributions

The ability of people aged 65 and over to make personal contributions or non-super guarantee contributions is limited by what is referred to as the ‘work test’.

The work test is created by regulation 7.04 of the Superannuation Industry (Supervision) Regulations 1994 – which sets out the requirements for a super fund to accept contributions. Item 2 of the table requires, for a member who is “is not under 65, but is under 70” that:

“if the member has been gainfully employed on at least a part-time basis during the financial year in which the contributions are made” Read more...

CGT Cap for Superannuation: what is it, how much is it?

What is the CGT Cap?

The CGT cap for superannuation contributions is a lifetime contributions cap for some contributions relating to the small business CGT concessions.

The CGT cap is a lifetime cap – an opposed to the annual contribution caps, however it is indexed and these indexed amounts increase a persons lifetime cap. For example, say a member had used $ 1,100,000 of their cap in the 2009/10 financial year – the full amount of their cap. When the cap indexed for the next year their remaining lifetime CGT cap would have increased to $ 55,000, due to the indexation. Read more...

Returning super contributions: age, tfn, fund capped & mistakes

Returning Super ContributionsThere are certain circumstances in which a super fund is required to return a superannuation contribution received:

  • Age restricted
  • Tax File Number
  • Fund Capped Contributions

Though it is also possible for a super fund to return a contribution that was made by mistake.

Age restricted

Regulation 7.04 of SISR creates a number of restrictions around super funds accepting contributions, many of these are related to the members age:

When can a super fund accept a contribution?

 Type of Contribution / Members Age<6565 – 6970 – 7475+
Mandated Employer Contributions (Super Guarantee)YesYesYesYes
Other Employer ContributionsYesYes *Yes *No
Member ContributionsYesYes *Yes *No

*If work test is passed.

If a super fund receives a contribution which it is unable to accept – for example a member contribution from someone over age 75, “the fund must return the amount to the entity or person that paid the amount within 30 days of becoming aware that the amount was received in a manner that is inconsistent [with the subregulation]” – SISR 7.04(4)a. Read more...