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Changes to superannuation for the new financial year

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The new financial year brings in some changes to superannuation that everyone should be aware of.

Superannuation guarantee

For the 2014/15 year this has been increased from 9.25% to 9.5%. Both employers and employees should ensure this increase is being complied with.

Concessional contributions

Concessional contributions are those which are taxed at 15% upon entry into the fund. They encompass guarantee payments by employers, salary sacrifice arrangements and personal contributions by self-employed persons.

For the 2014/15 year the caps on this type of contribution has been increased to $30,000 for persons up to age 49 & $35,000 for those 49 & over. If you are salary sacrificing and wish to take advantage of these higher caps, you should make arrangements now. Excess contributions for years 2013/14 and later, are to be included in an individual’s taxable income, with a non-refundable tax offset equal to the 15% tax paid by your fund. They will also count towards the non-concessional cap.

Non-concessional contributions

These are personal contributions made to superannuation that are not taxed upon entry into the fund as they come from ‘after tax’ monies. They are useful for topping up your superannuation balance as you approach retirement.

For the 2014/15 year they have been increased from $150,000 pa to $180,000 p.a, or $540,000 over a rolling 3 year period for individuals under 65. If over 65, you must meet the work test, however you are unable to take advantage of the rolling 3 year rolling benefit. Earnings within superannuation are taxed at a maximum of 15%, or if you are in pension phase & over 60, they are tax free. As such, it could make sense to use this strategy to maximise your returns.

Insurance within superannuation

The changes in this area relate to the types of policies held for total and permanent disability, income protection and trauma. If you hold these types of policies within superannuation, or are considering them, it is recommended you seek the advice of a suitably qualified adviser to ensure your benefits are optimised.

Dragonfly Financial Services ABN 40150460674 is a Corporate Authorised Representative of Financial Services Partners Pty Ltd, ABN 15 089 512 587 AFSL 237590.

General Advice Warning: The information provided in this document is general information only and does not constitute personal advice. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out

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