Superannuation Facts; Superannuation can be complex at times, below I have put together some tables that help clarify the current financial year figures on Super contributions, Super Benefits and Income streams paid from a Super fund. Many of the figures are set each year by the government and will vary from year to year as displayed in the tables below.

 

CONTRIBUTIONS to SUPER ACCOUNT:

Superannuation Guarantee (SGC)– contribution maximums:

The maximum superannuation contribution employers are obliged to pay employees under the Superannuation Guarantee (SG) liability they will incur for employees. If an employee’s income exceeds the Annualised maximum for the current year 2011 - 12, then the employer only has to make compulsory SG contributions up amount below in the current financial year.

Income year

Per quarter

Annualised

2011/2012

 $  43,820

 $175,280

2010/2011

 $  42,220

 $168,880

2009/2010

 $  40,170

 $160,680

2008/2009

 $  38,180

 $152,720

 

The Superannuation Guarantee Charge is payable if employer contributions are not paid by the 28th of each month after the end of the Quarter it is due in each financial year

 

Non-concessional contributions cap – (Not claiming a tax deduction):

If you’re under age 65 at 1 July of the financial year, you can bring forward future contributions of two years worth ($150,000 each year) of non-concessional contributions. As an example, a person under age 65 would can contribute non-concessional contributions totaling $450,000 in the 2011/2012 financial year without exceeding their non-concessional contribution cap.

NB:

Could not make any more contributions for next 2 full years.

If you are aged 65 or over, you cannot ‘bring forward’ your entitlements to make non-concessional contributions. If you’re aged 65 to 74 you’ll have a non-concessional contributions cap of $150,000 for the 2011/2012 financial year

Financial year

Cap Bring-forward rule

2012/2013

$150,000

$450,000

2011/2012

$150,000

$450,000

2010/2011

$150,000

$450,000

2009/2010

$150,000

$450,000

2008/2009

$150,000

$450,000

In the above table please bear in mind that the $450,000 contributed in one year attracts the averaging rules and means you cannot contribute again for three years.

 

Concessional Contribution Caps – (tax deduction)

Financial year

Cap Transitional up to 50 years old

cap for over-50s

2011/2012

$25,000

$50,000

2010/2011

$25,000

$50,000

2009/2010

$25,000

$50,000

2008/2009

$50,000

$100,000

 

Co-contribution from Government:

To help you save for your retirement, the Government may give you money to add your super balance. It’s called the Government co-contribution and it will add to your super balance with a compounding effect until you retire. Of course the money will still compound after you retire until nothing left !

 

The co-contribution matching rate is 100% of the non-concessional (after-tax) contributions that you make, but note that the maximum co-contribution that you can receive is $1,000. Note that the thresholds are the same 2010/2011 and 2011/2012 years

 

Co-contribution thresholds

Income year

Lower income threshold

Upper income threshold

2011/2012

$31,920

$61,920

2010/2011

$31,920

$61,920

2009/2010

$31,920

$61,920

2008/2009

$30,342

$60,342

 

Sample of government Co-contribution for current financial year 2011 - 12

 

Your total Gross income 

Your contribution 

Government contribution

Maximum up to this Amount

 $    31,920.00

 $      1,000.00

 $     1,000.00

 

 $    35,000.00

 $         897.00

 $        897.00

 

 $    40,000.00

 $         731.00

 $        731.00

 

 $    45,000.00

 $         564.00

 $        564.00

 

 $    50,000.00

 $         397.00

 $        397.00

 

 $    55,000.00

 $         231.00

 $        231.00

No entitlement above this amount

 $    61,920.00

 $                -  

 $              -  

 

 

Contributing to Super:

The following tests apply to determine whether a super fund can receive a contribution for a member.

Age of Member

Test

Below 65

·        No test applies – see above for contribution caps

65 to 69

·        Member must have been gainfully employed for at least 40 hours in a period of not more than 30 consecutive days in that financial year; or

·        Contributions are mandated (award or SG)

70 to 74

·        Member must have been gainfully employed for at least 40 hours in a period of not more than 30 consecutive days in that financial year; or

·        Contributions are mandated (award)

75 and over

·        Contributions are mandated (award)

 

Spouse Contribution:

From 1 July 2007, contributions made directly by an individual into their spouse’s account will be counted against the receiving spouse’s non concessional contributions cap. A tax rebate of up to $540 may be available for up to $3,000 of superannuation contributions made by a tax payer (contributor) on behalf of a non-working or low income spouse.

 

The rebate is available to a person who makes spouse contributions where:

• the person has a spouse

• the contributor makes personal contributions on behalf of their spouse (whether the spouse is gainfully employed or not)

• person contributing does not claim a tax deduction

• both spouse and contributor are Australian residents

• spouse’s assessable income is less than $13,800 p.a.

 

Contributions made for a receiving spouse cannot be transferred to the contributing tax payer.

For taxation purposes, spouse contributions are treated as follows:

• non-concessional (but these contributions will be preserved)

• tax free when withdrawn (interest on these amounts may be taxed)

• not subject to 15% contributions tax, and

• not surchargeable.

 

CGT cap amount:

This table relates to where you sell a business and wish to rollover the Capital Gain with respect to the sale of the business into complying Superannuation fund. Many issues of who controls the business at point of sale come into play.

 

Income year Cap

                  

2011/2012

$1,205,000

2010/2011   

$1,155,000

2009/2010

$1,100,000

2008/2009

$1,045,000

NB:

SIS rules apply to this strategy being allowable, please call New Wealth Directions to discuss this strategy to see if it is appropriate, to your needs.

 

INCOME STREAMS

Minimum pension payments:

An account-based pension requires the member to withdraw a minimum amount each year based on your age and account balance as at 1 July.

Age

Percentage factors

2011/2012 year

2010/2011 year

2009/2010 year

 

 

50% Reduced Minimum Percentage factors

55-64

4.00%

3.00%

2.00%

2.00%

65-74

5.00%

3.75%

2.50%

2.50%

75-79

6.00%

4.50%

3.00%

3.00%

80-84

7.00%

5.25%

3.50%

3.50%

85-89

9.00%

6.75%

4.50%

4.50%

90-94

11.00%

8.25%

5.50%

5.50%

95 or older

14.00%

10.50%

7.00%

7.00%

 

A 10% maximum payment applies to Transition to Retirement Income Streams.

The taxable component of an income stream is taxed at the member’s marginal tax rate, subject to the following tax offset arrangements:

Age of Member

Paid from SMSF (taxed fund)

Below preservation age

No tax offset available

At or above preservation age

15% tax offset available on taxable component

Age 60 year of above

Non-assessable non-exempt income (tax-free)

 

SUPERANNUATION BENEFITS

Lump Sums

Lump sum withdrawals from a self-managed super fund (taxed fund) are tax-free if the member is age 60 or older at the time of withdrawal. If the member is under 60, the follow rates will apply:

Element

Tax (excluding Medicare levy)

Tax-Free

NIL

Taxable

 

Below Preservation age

20% maximum

At or above preservation age but below 60

Nil on first $165,000; balance at 15% maximum

·        see annual threshold information in the table below:

 

Financial year

Amount of cap

2011-12

$165,000

2010-11

$160,000

2009-10

$150,000

2008-09

$145,000

2007-08

$140,000

 

Employee Contributions; Employees with assessable income plus reportable fringe benefits of $27,000 pa or less can claim a rebate equal to 10% of their rebated contributions (up to $1,000). Maximum rebate is $100 (10% x $1,000). Rebate reduces by 2.5 cents per dollar over $27,000. No rebate once assessable income plus reportable fringe benefits equals $31,000 pa.

 

Super Guarantee (SG)

Financial Year

Min Employer Support

2011 – 2012 current year

9%

2002 - 2003 and onwards

9%

2001 - 2002

8%

2000 - 2001

8%

1999 - 2000

7%

Penalties apply to employers who fail to submit their SG contributions by the 28th of the month following the end of quarter. Required to complete an SG statement by the 28th of the second month after the end of quarter and pay the SG charge (SGC) liability.

 

This SGC consists of:

• the shortfall in the SG contributions for the quarter

• the interest at 10% p.a. on the shortfall up to the date the statement and payment is 
   submitted; and

• $20 administration charge/employee where a shortfall exists.

From 1 January 2006, contributions made after the due date maybe used to offset the

SG shortfall.

 

The minimum salary that requires Superannuation Guarantee to be paid in 2011 - 2012 is $450 per month. There are some exceptions to this !

 

In all circumstances it is advisable the employer check with the Superannuation Guarantee Help Line on 13 1020.