Boost your super before 30 June 2017

How to maximise your super prior to regulation changes in July 2017.

Make changes today to give your super a boost

Did you know the amount you can contribute to superannuation will decrease from 1 July 2017? Paying extra into your superannuation now may make a big impact later in retirement. It could mean the difference between being able to afford regular holidays or dinners out, and still being able to pay your bills at age 100. Even a little bit may make a difference.

Select your option below to find out how these changes may affect you.

Taken from your salary before tax, such as Superannuation Guarantee.

Any additional contribution you make that you have already paid tax on.

Changes that could impact your transition to retirement.

Ready to boost your super? Speak to one of our super representatives:

Making before-tax contributions

Right now the total amount you can contribute to your superannuation before tax, is capped at:

  • $35,000 per year if you are aged 50 or over.
  • $30,000 per year if you are aged under 50.

Your before-tax contributions include your Superannuation Guarantee contributions, any other employer super contributions, salary sacrificing (if you do this) and any contributions that you have claimed a tax deduction for.

The cap will reduce to $25,000 per financial year from 1 July 2017, regardless of age.

So now might be a great opportunity to take advantage of the current higher cap to boost your super.

There will be additional flexibility from 1 July 2018 if you have less than $500,000 in total superannuation which will allow you to carry forward your unused before-tax (concessional) contributions for up to five years.

Consider contributing from your before-tax salary before the cap changes and boost your superannuation – find out how, or speak to one of our super specialists.

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Making after-tax contributions

Take advantage of the current higher after-tax contributions cap to boost your super before it changes.

From 1 July 2017, the cap on after-tax contributions will reduce to $100,000 per financial year. It’s currently $180,000 for those under 65 years. From 1 July you will also only be able to make after-tax (non-concessional) contributions if your total super balance is less than $1.6 million.

If you have spare cash on hand, whether an inheritance, dividend payments, a bonus or even just change after bills, you might consider contributing this to your superannuation sooner rather than later.

And, if you are aged under 65, you can bring forward up to three years of after-tax contributions, allowing you to invest up to $540,000 in one go. This cap will change to $300,000 from 1 July this year.

Consider making an after-tax contribution before the cap changes and boost your superannuation – find out how, or speak to one of our super specialists. 

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Entering retirement

If you’re retired or about to retire, there are a few changes you should know about.
From 1 July 2017, the maximum amount you can have invested in the retirement phase will be $1.6 million. If you’ve already retired and your balance exceeds this cap you will be required to either:

  • Move the excess back to the accumulation phase or
  • Withdraw the amount as a lump sum by 1 July 2017 or have a tax penalty applied.

Note: This deadline is 31 December 2017 if the excess amount is $100,000 or less.

If you’re currently invested in a Transition-to-Retirement (TTR) pension, from 1 July 2017, the earnings from this pension will be taxed at up to 15% pa (compared to its current tax-free status). You may want to talk to us and evaluate whether this style of pension is still right for you.

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Ready to boost your super? Speak to one of our super representatives:

What are the new superannuation reforms?

In the 2016 Federal Budget, the government proposed significant changes to superannuation. Many of these have since become law and will take effect from 1 July 2017.

The major changes include:

  • The after-tax (non-concessional) contribution limit will drop from $180,000 to $100,000 per year, and you will only be able to contribute if you have a total superannuation balance below $1.6 million^.
  • The before-tax (concessional) contribution limit will drop to $25,000, regardless of age. Previously, those aged under 50 could contribute up to $30,000 per year while those aged 50 and over could contribute up to $35,000 per year.* 

From 1 July 2018, if you have less than $500,000 in total superannuation, you can carry forward your unused before-tax (concessional) contributions for up to five years.

*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%, compared to your marginal tax rate. Note: an additional 15% tax may be payable for higher income earners.

^ Your total superannuation balance will be assessed as at 30 June of the previous financial year to determine whether you are eligible to make after-tax (non-concessional) contributions in the next financial year

Why should I boost my superannuation?

The amount you have in your superannuation at retirement can mean the difference between a modest lifestyle or a more comfortable one with a few luxuries.

  • Making extra payments from your before-tax salary may mean you access a tax rate of 15% (depending on your income level) instead of your marginal tax rate*.
  • And you can save for your retirement faster than relying on your Superannuation Guarantee contributions alone.

*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%, compared to your marginal tax rate. Note: an additional 15% tax may be payable for higher income earners.

Why should I boost my super now?

The superannuation contribution rules change as of 1 July 2017. If you boost your superannuation now, you can take advantage of higher contribution limits on both your before and after-tax contributions. In addition, if your superannuation total is more than $1.6 million, this might also be your last opportunity to make an after-tax contribution.

What is the difference between a concessional and a non-concessional contribution?

A concessional contribution is a payment to superannuation made before tax, and includes the payments your employer might make on your behalf, for example Superannuation Guarantee. It also includes additional payments you make yourself through salary sacrificing or for which you claim a tax deduction.

Concessional contributions are taxed at a rate of 15%, instead of your marginal tax rate*. After 1 July 2017, the concessional contribution cap will be reduced to $25,000 per year regardless of your age.

A non-concessional contribution is a payment made to superannuation after tax. It can be from a range of sources like an inheritance, a property sale or even just additional payments from your after-tax salary. The current cap on these contributions is $180,000 per year or you can contribute up to $540,000 using the bring forward rules if you are under 65 years old. From 1 July 2017, this will decrease to $100,000 per year and up to $300,000 under the bring forward rules for those under 65 years.

*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%, compared to your marginal tax rate. Note: an additional 15% tax may be payable for higher income earners.

Is there an advantage to boosting before-tax (concessional contributions) before 30 June 2017?

Before-tax (concessional) contributions are taxed at 15% per year compared to your marginal tax rate*. Until 30 June 2017, the limit for these contributions is $30,000 per year if you are aged under 50 years and $35,000 per year if you are aged 50 or over. From 1 July 2017, the concessional contribution will be reduced to $25,000 per year, regardless of your age.

*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%, compared to your marginal tax rate. Note: an additional 15% tax may be payable for higher income earners.

I am aged between 50-64 years old with a superannuation balance below $1.6 million. What does this mean for me?

Until 30 June 2017, you have the opportunity to do the following:

  • Make before-tax (concessional) contributions to the total of $35,000 per year. These are taxed at the rate of 15%, compared to your marginal tax rate. *
  • Make after-tax (non-concessional) contributions, such as a lump sum payment from the sale of a property or an inheritance, up to $180,000 or use the three year bring forward rules up to the value of $540,000 (provided you are under 65 years and have not triggered it in recent years).

From 1 July 2017, these contribution caps will change. Before-tax contributions will be capped at $25,000 per year while after-tax contributions will be capped at $100,000 per year or up to $300,000 using the three year bring forward rule for those under 65 years.

*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%, compared to your marginal tax rate. Note: an additional 15% tax may be payable for higher income earners.

I am under 50 years old. What does this mean for me?

Due to impending changes, you have to act soon to maximise your super. Until 30 June 2017, you have the opportunity to do the following:

  • Make before-tax (concessional) contributions from your salary to the total of $30,000 per year (in combination with employer or personal tax deductable contributions). These are taxed at the rate of 15%, rather than your marginal tax rate. *
  • Make after-tax (non-concessional) contributions, such as a lump sum payment from the sale of a property or an inheritance, up to $180,000 or use the three year bring forward rules up to the value of $540,000 (provided you are under 65 years and have not triggered it in recent years).

From 1 July 2017, these contribution caps will change. Before-tax contributions will be capped at $25,000 per year while after-tax contributions will be capped at $100,000 per year or up to$300,000 using the bring forward rule for those under 65 years. You won’t be able to make after-tax contributions if your total superannuation balance is $1.6 million or over. 

*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%, compared to your marginal tax rate. Note: an additional 15% tax may be payable for higher income earners.
 

I am aged between 50-64 years old and my superannuation account is worth more than $1.6 million. How does this affect me?

Until 30 June 2017, you have the opportunity to do the following:

  • Make before-tax (concessional) contributions from your salary to the total of $35,000 per year (in combination with employer or personal tax deductable contributions). These are taxed at the rate of 15%, compared to your marginal tax rate.*
  • Make after-tax (non-concessional) contributions, such as a lump sum payment from the sale of a property or an inheritance, to the value of $540,000 using the three year bring forward rule (provided you are under 65 and have not triggered it in recent years).

From 1 July 2017, you may no longer be able to make after-tax contributions to your superannuation account but you can still make concessional contributions of $25,000 per financial year. If your total superannuation account balance falls below the transfer balance cap (currently $1.6 million and subject to indexation) you may be eligible to make additional non-concessional contributions in the future.

*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%, compared to your marginal tax rate. Note: an additional 15% tax may be payable for higher income earners.

I am 68 years old or over and still working. What does this mean for me?

To continue to make contributions, you will need to pass the work test – this means you will need to have worked 40 hours or more in 30 consecutive days across the financial year.
Until 30 June 2017, you have the opportunity to make the following contributions.

  • Make before-tax (concessional) contributions from your salary to the total of $35,000 per year. These are taxed at the rate of 15%, rather than your marginal tax rate. *
  • Make after-tax (non-concessional) contributions, such as a lump sum payment from a property sale or an inheritance, to the value of $180,000.

From 1 July 2017, these caps will change such that before-tax contributions are capped at $25,000 per year while after-tax contributions are capped at $100,000 per year, provided your total superannuation account balance is less than the transfer balance cap (currently $1.6 million and subject to indexation).

Please note as you are over 65, you are no longer able to use the bring forward rules.

*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%, compared to your marginal tax rate. Note: an additional 15% tax may be payable for higher income earners.
 

I have already retired. I have over $1.6 million in my account-based pension. What does this mean for me?

From 1 July 2017, the maximum amount you can have invested in the retirement phase will be $1.6 million. As your balance exceeds the $1.6 million cap you will be required to either:

  • Move the excess back to the accumulation phase, or
  • Withdraw the amount as a lump sum by 1 July 2017. Otherwise you may have a tax penalty applied.

If your balance exceeds the cap by $100,000 or less, you will have until 31 December to reduce the balance below $1.6 million.

If you’re currently invested in a Transition-to-Retirement (TTR) pension, from 1 July 2017, the earnings will be taxed at up to 15% pa (compared to its current tax-free status). You may want to talk to us and evaluate whether this style of pension is still right for you.  

How do I make extra contributions to my super?

Before making contributions to your super, you’ll need to do the following:

  • Consider your financial situation, what you can afford and what your options are so you can decide whether making extra super contributions is right for you across the short and long term. Bear in mind, there are government restrictions around when you can access your superannuation. If you have a financial adviser, it may be helpful to discuss this with them and the options available to you.
  • Check your current and previous contributions across your superannuation (including if you have multiple accounts). If your super is linked to a Westpac or St George account (like BT Super for Life), you will be able to check this by logging on to your online bank account or otherwise, call us on 132 135.
  • Be aware of the caps on total contributions to your superannuation. 

If you would like to make before-tax contributions:

  • If you are an employee, talk to your employer about your options, such as whether they offer salary sacrificing from your pre-tax salary to your superannuation; or
  • If you are self-employed, you may be able to claim a tax deduction for contributions you make yourself to your superannuation. From 1 July 2017 and pending eligibility, anyone may be able to claim a tax deduction for their financial year contributions, regardless of whether they are self-employed or otherwise. Visit ato.gov.au for the latest information on this.

If you would like to make after-tax contributions:

  • Make your contribution by direct transfer or deposit if your bank account is linked to your superannuation account.
  • Use BPAY to make your after-tax contribution. The instructions and codes for this are available here: https://www.bt.com.au/personal/help/use-bpay.html

Others can also make a contribution on your behalf. If you would like more information on how to do this or making a contribution yourself, speak to one of our superannuation specialists on 132 135.

Where can I login to view my account?

Visit the following links:

If your superannuation is linked to your Westpac Group bank account, other links include:

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The end of each financial year offers opportunities to grow your super. We explain the key strategies involved to give your super a boost before 30 June.
The Easy Rollover tool makes it simple for you to roll over super funds you may have into your BT Super account.
We explain the rules about how much you can contribute into super each year – and when you can start to draw on your super, in line with your age and life stages.

This information is current as at 31 January 2017. This information has been prepared without taking account of your personal objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. The tax position described is a general statement and is for guidance only. It has not been prepared by a registered tax agent. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice. For more information, visit the ATO website.

Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investment held in superannuation. The Government has set caps on the amount of money that you can add to superannuation each year on both a concessional and non-concessional tax basis. There will be tax consequences if you breach these caps. For more detail, speak with a financial adviser or visit the ATO website.

BT Advisers are representatives of Westpac Banking Corporation ABN 33 007 457 141 AFSL & Australian Credit Licence 233714 (Westpac). BT Advice is a Division of Westpac.

©233714 (Westpac). BT Advice is a Division of Westpac Banking Corporation ABN 33 007 457 141. Information as at 19 September 2016.