Year-end to do list - Superannuation

Personal contributions

If you are looking at making personal superannuation contributions for 30 June 2021, there are a few reminders to be conscious of, including the following:

• For those aged 67–74 wanting to make a personal deductible contribution in 2020–21, you are still required to meet the work test. The work test requires you to be gainfully employed for at least 40 hours during any consecutive 30-day period of the financial year.
• Your concessional contributions cap in order to maximise your contributions for the year is $25,000.
• Don’t forget to provide a section 290-170 notice to your superannuation fund advising of your intention of claim a personal tax deduction for the contribution. A failure to provide this notice, or receive an acknowledgement of receipt of this notice from the trustee of the fund, will result in no deduction being available.

Carry forward unused concessional contributions

From 2019–20, carry-forward rules allow you to make extra concessional contributions – above the general concessional contributions cap – without having to pay extra tax.
The carry-forward arrangements involve accessing unused concessional cap amounts from previous years. An unused cap amount occurs when the concessional contributions you made in a financial year were less than your general concessional contributions cap.

To use your unused cap amounts you need to meet two conditions:

• Your total super balance at the end of 30 June of the previous financial year is less than $500,000.
• You made concessional contributions in the financial year that exceeded your general concessional contributions cap.

The amount of unused cap amounts you will be able to carry-forward will depend on the amount you have contributed in previous years, starting from 2018–19. You can use caps from up to five previous financial years and will expire after this. For example, a 2018–19 unused cap amount which is not used by the end of 2023–24 will expire.

If, after applying all your available unused cap amounts, you still have excess concessional contributions, you may need to pay extra tax.

Employer contributions

A reminder for employers that superannuation contributions are deductible only once ‘paid’. While the June 2021 quarter superannuation guarantee contribution is not technically due until 28 July, many employers look to pay their June quarter superannuation contributions before 30 June to secure a tax deduction this year. Remember, merely accruing your superannuation contributions in your financial accounts is not enough to secure a deduction. The ATO has ruled that the contribution must be received by the fund to have been ‘paid’, so make sure that sufficient time has been allowed for the contributions to get to the fund.

If you have any queries, please contact us.

Paul and Helder