Tax & super

My Super News

Federal Budget 2017: The wrap up

17-May-2017

The Government largely left superannuation untouched in this year’s Budget. Read on to find out what’s changing, what it means for you, and what our investment experts think of the proposed changes.
Read More

Star performance

12-Apr-2017

We are busily preparing our member's annual statements, but wanted to share these impressive results a little earlier. Investment returns for VISSF members have been very strong this past year... Read More

Contribution Limits

The Government places limits on how much you can invest in your super account each year, before additional tax applies. Members are responsible for ensuring their super contributions don’t breach the caps. Take care, especially if you are planning on investing large amounts. If you think you might be approaching the caps, check with us well before the end of the financial year.

A summary of the above issues is set out in the table below:

Contribution
Type
What is included? Annual Limit If limit exceeded

Concessional Contribution

Employer contributions.

Salary sacrifice contributions.

Contributions you have claimed a deduction on.

However, you must be aged 74 or less. If you are aged 65 to 74 you must meet the work test in the relevant year. ##

$25,000 for 2017/2018*

From 2018/2019, individuals with balances less than $500,000 just before the start of the financial year, may be able to make additional concessional contributions by accessing any unused concessional contributions from the previous five year period.

 

You will be taxed at your marginal rate (including the Medicare levy) plus an excess concessional contributions charge on the amount of the excess. This excess will count towards your non-concessional cap.

You may apply to have the tax liability paid to you from VISSF by completing an ATO 'release authority'.

Non concessional contribution#

Personal contributions for which you do not claim a deduction.

Spouse contributions made on your behalf.

However, you must be aged 74 or less. If you are aged 65 to 74 you must meet the work test in the relevant year. ##

$100,000** per financial year provided your total superannuation balance is less than the transfer balance cap (currently $1.6 million) at 30 June of the previous financial year. However, if you are under age 64 you can bring forward two years of future limits averaged over a three year period, giving you a cap of $300,000 over a three year period.

Excess contributions must be refunded to you and may be adjusted to reflect investment earnings (positive or negative), fees and expenses incurred or made while the excess was in VISSF.                    

Any contributions made in excess of this limit will be taxed at the highest marginal rate.

* Indexed to increase with AWOTE but will only increase on $5,000 increments.

** Is a multiple of the concessional contribution limit so will increase from time to time.

# Certain amounts are excluded from this definition. For example, proceeds from the disposal of eligible small business assets or proceeds from a settlement for an injury resulting in permanent disablement. Consult your adviser if you think these may apply to you.

## You must work for 40 hours during a consecutive 30 day period in order to meet the work test.

Important Note: We recommend you consult with a financial adviser and/or the ATO website (www.ato.gov.au) if you believe these matters are relevant to you.

Concessional contributions

Concessional contributions are contributions made by your employer, by you from your pre-tax salary (salary sacrifice) or contributions you have claimed a tax deduction on.

For the 2017/18 financial year a cap of $25,000 applies.

Concessional contributions are subject to 15% contributions tax in a super fund, however if your concessional contributions exceed the cap in a financial year, the amount in excess of the cap is subject to additional tax at your marginal tax rate (including the Medicare levy) and the ATO will seek payment of this additional tax from you personally. If such a situation arises, you will be able to request the Trustee to release up to 85% of your excess concessional contributions from your super fund to help pay your income tax assessment. You may also be assessed by the ATO to pay an Excess Concessional Contributions (ECC) charge on the increase in your tax liability and a General Interest Charge (GIC) may apply to late payments.

Individuals who have income (including super contributions) of $250,000 or more, pay an additional 15% tax on their super contributions.

Non-concessional contributions

Non-concessional contributions are contributions you make from your after tax salary or from another source of savings that you have already paid tax on.

For the 2017/18 financial year, a cap of $100,000 applies and any excess concessional contributions also count towards the non-concessional cap.

If you are under age 65 you may bring forward two years of non-concessional contributions. This means you can contribute three times the current limit, being $300,000 in one financial year but nothing in the next two years.

From 1 July 2017, there will be constraints so that individuals with a balance of $1.6 million or more will no longer be eligible to make non-concessional contributions. Also from 1 July 2017, you may only bring contributions if your super balance is less than the transfer balance cap (being $1.6 million from 1 July 2017) on 30 June of the previous year. Refer to www.ato.gov.au/super for full details.

If you are the recipient of spouse contributions, these will count towards your non-concessional cap. Government co-contributions and contributions being proceeds from certain businesses, or proceeds of certain payments for personal injury, may not be counted in the cap.        

VISSF is not able to accept non-concessional contributions in excess of the non-concessional contributions cap (determined on a contribution by contribution basis) or where you have not provided your tax file number (TFN). Non-concessional contributions made in contravention of these rules must be refunded to you. Any refund will be adjusted for investment fluctuations, reasonable costs and possible expenses such as insurance premiums.

Non-concessional contributions are not generally subject to tax within the specified cap amounts. If your non-concessional contributions exceed the cap in a financial year, the amount in excess of the cap is subject to additional tax at the rate of 45% plus Medicare and any other applicable levies.

Where you have exceeded the non-concessional contributions cap and you receive an assessment from the ATO, you must request the Trustee to release money from your account to enable you to pay this additional tax.

My Super News

Federal Budget 2017: The wrap up

17-May-2017

The Government largely left superannuation untouched in this year’s Budget. Read on to find out what’s changing, what it means for you, and what our investment experts think of the proposed changes.
Read More

Star performance

12-Apr-2017

We are busily preparing our member's annual statements, but wanted to share these impressive results a little earlier. Investment returns for VISSF members have been very strong this past year... Read More

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