From 1 July 2018, some of the biggest changes to super rules since 2007 commenced, including a raft of new acronyms (TBAR, TBA, TBC, etc). We have put together a summary of the major changes.

Essential super ready reckoner

 

How you get money into super

Concessional (pre-tax) contributionsNon-concessional (after tax) contributions
Compulsory employer contributions (SG)Personal contribution
Salary sacrificeSpouse contribution
Personal tax deductible contributions1Amounts that exceed your concessional cap

1 From 1 July 2018 the 10% rule no longer applies; to claim a tax deduction you must complete a s290-170 ATO form

 

 

Caps on how much money you can get into super

AgeConcessional capNon-concessional cap
75 or over$0$0
65 to 75$25,0002$100,0002
Less than 65 & super balance > $1.6m$25,000$0
Less than 65 & super balance $1.3m to $1.6m$25,000Various3
Less than 65 & super balance > $1.3m$25,000$100,000 or bring forward 3 x $100,000

2 Need to meet the works test of working 40 hours in 30 consecutive days in a financial year

3 Concessional contribution and the bring forward amounts scale down as get closer to $1.6m

 

Tax on your concessional contributions

Adjusted taxable income (ATI)4Tax rate
> $250,00030%
< $250,00015%

4 ATI = taxable income + reportable fringe benefits + investment losses – reportable super contributions (eg salary sacrifice amounts) + concessional contributions

 

Age you can access your super

Date of birthPreservation age
Before 1 July 196051
1 July 1960 to 30 June 196156
1 July 1961 to 30 June 196257
1 July 1962 to 30 June 196358
1 July 1963 to 30 June 196459
After 1 July 196460

 

When you can access your super

Event
Reach your preservation age & retireTemporary or permanent disability
Cease employment & aged > 60Leave Australia permanently
Reach age 65 or olderFinancial hardship or compassionate grounds
Reach your preservation age & transition to retirementCease employment and < $200 in super
DeathTerminal medical condition

 

How much you must to take out of super

Age at 1 July that financial yearMinimum withdrawal
Under 654%
64 to 745%
75 to 796%
80 to 847%
85 to 899%
90 to 9411%
95 and over14%
Maximum withdraw if in transition to retirement is 10%

 

Tax on your super if you die

Who receives the super and typeTax rate
Reversionary pension to spouse or financial dependant50%
Lump sum to spouse or financial dependant0%
Lump sum to non-dependant tax free component0%
Lump sum to non-dependant taxable component taxed element615%
Lump sum to non-dependant taxable component untaxed element630%

5 Where either the deceased or spouse/dependant aged 60 or over

6 This tax highlights the importance of Quantum Financial’s estate planning advice

 

New $1.6m transfer balance cap7

Credits (used towards your cap)8Debits (come off your cap)
Value of super interest supporting income stream from 1 July 2017Commutation of a super income stream
Commencement of new income streams from 1 July 2017 onwardsStructured settlement payments contributed to super (eg personal injury payments)
Value of a reversionary pension if you become entitled to one9Certain payments from family law splits, fraud or void transaction
Notional earnings accruing to excess transfer balance amounts15%

7 Investment gains and losses do not alter the transfer balance cap. Income stream payments do not change the transfer balance cap either.

8 A defined benefit (DB) pension or annuity’s special value is the annual entitlement x 16. For a non-commutable life expectancy or market linked product, the special value is the annual entitlement x the product’s remaining term.

9 You have 12 months to deal with reversionary pension before it counts as a credit towards your cap