Super is on the up, are you taking advantage?
12 May 2014
By Trent Daly
With many recent changes to superannuation, it is important to be informed about how the new legislation will affect you and your family.
Some changes to superannuation went into effect on 1 July 2013. For example, employers must now make compulsory annual contributions of 9.25% of salary, into each employee's superannuation fund - an increase of 0.25%. Additionally, if you were aged at least 59 on 30 June 2013, your concessional contributions cap increased from $25,000 to $35,000. Such changes could make a significant difference in the last few years of your working life.
The next major changes are scheduled to go into effect from 1 July 2014 and will have an even greater impact on even more Australians. If you are over the age of 50, you will be eligible to make annual concessional contributions (or before tax contributions) of up to $35,000. If you are under the age of 50, your contribution limit will be raised from $25,000 to $30,000.
See the table below for the schedule of changes.
|Financial year||Age 60 and over||Age 50 to 59||Under age 50|
Additionally, the non-concessional contributions cap will increase from $150,000 per person per annum to $180,000. If using the three year bring forward rule, the cap will rise from $450,000 for to $540,000. Superannuation is a great, tax-effective way to save, but ensure you are aware of changes in order to best use them to your advantage and avoid penalty taxes. Always seek professional financial advice before making any changes to your contributions or salary sacrifice. The new legislation can work to your benefit, but errors can be costly.
To learn more about Trent, view his online profile.