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Give your super a helping hand

Small changes now, could mean a big change in retirement

It’s your super, your future – here’s how you can give it a helping hand

Depending on your financial circumstances and what you can afford, a modest contribution today may reap big rewards down the track.

Additional contributions into your super (even if it’s a small amount) allow you to potentially build a bigger nest-egg when you retire. 

It's also important to understand the tax implications, if any when contributing into your super fund. You should be aware there are different types of contributions that can be made into your super and limits on how much you can top up your super in the financial year. These are known as contribution caps.

There are two main contribution types:

Concessional contributions are monies that are paid into your super fund with pre-tax income such as employer contributions, salary sacrifice and personal contributions whereby you have claimed a tax deduction. These contributions are generally taxed at 15%. For the financial year 2023-24, the concessional contribution cap is $27,500. 

Non-concessional contributions are monies paid into your super fund using after-tax income such as voluntary personal contributions and spouse contributions. It’s important to note that these contribution types have a contribution cap of $110,000 per year for after-tax personal super contributions in the 2023-24 financial year, for which you do not claim a tax deduction and spouse contributions you receive. If you’re under 75 and eligible, you may also be able to bundle up to three years of non-concessional contributions, or $330,000, under the bring-forward rule. These contributions are generally not taxed when received into your super fund.

If you exceed your super contribution caps, additional tax and penalties may apply.

Refer to the ATO website for more information.     

The benefits of making additional contributions to your super may include:
•    Tax benefits: Your super contributions are taxed at 15%, which is generally a lower rate compared to your income tax rate. To learn more about the new tax rates and thresholds from 1 July 2024 refer to the ATO website.
•    Fund growth: Increasing your super contributions will help your balance grow for your retirement. Since your super can only be accessed under certain conditions of release, this is another way to save by removing the temptation of accessing your funds early.
•    Insurance benefits: Additional contributions into your super can help cover the costs of your premiums. This may help to keep your super balance healthy and stop it being eroded by fees.     

If you would like to make a payment directly into your super fund, click below for more information. 

Make a payment

Refer to your latest payment notice or annual statement to confirm what type of contributions your policy can accept.

What are personal contributions?

Regardless of whether you are employed, self-employed, or not working at all, you can make a top-up contribution to your super from your personal savings or after you get paid. These contributions can be made directly into your super account in addition to the super contributions being made by your employer. 

Generally anyone under 75 can make a personal contribution to their super. However, if you’re aged 67-74 you will need to satisfy a work test if you want to claim a tax deduction for your personal contribution.

To claim a tax deduction, you will need to notify your super fund by completing a notice of intent to claim or vary a tax deduction. Generally, this form must be acknowledged by your fund before you lodge your tax return for the year. 

Access the notice of intent to claim or vary a tax deduction.

There are limits though. Concessional contributions, which include your employer’s Super Guarantee, salary sacrificed amounts, as well as any personal contributions for which you can claim as a tax deduction.        

For this financial year 2023-24, the concessional contribution cap is $27,500. This amount will increase for the 2024-25 to $30,000.
 

What are the different types of voluntary contributions?

Salary Sacrifice

You can arrange for your employer to increase the regular amount put into super from your pay packet before tax is taken out. This method, known as salary sacrificing, may lower your taxable income – allowing you to pay less tax.

In addition, any super top-up that you make in this way will likely be taxed at the concessional rate of 15%. While it will depend on your actual level of income, this can usually be lower than most people’s personal income tax rate making it a tax effective way to boost your super. 

If you’re in a financial position to salary sacrifice, it’s often a good idea to organise this before the start of a new financial year.  

Government Co-Contribution

The Government Co-contribution is designed to help low and middle-income earners boost their super balances for retirement. If you can contribute at least $1,000 after tax into your fund within the 2023-24 financial period, and earn an income between $43,445 and $58,445, you may be eligible for the Co-contribution from the government that can be paid at any time into your super fund. The maximum amount that you can receive is $500.

For the 2024-25 financial year, you need to earn between $45,400 and $60,400 to be eligible to receive a Co-contribution amount.   

To find out if you are eligible to receive a Co-contribution amount, visit the ATO website and use the Super Co-contribution calculator.

Make a downsizer contribution 

If you’re 55 years or older and selling your main residence, you may be able to contribute up to $300,000 into your super using the money from the sale. This is particularly handy if you haven’t had the chance to save enough funds for retirement.

You can do this regardless of your work status, super balance or contributions history. It’s not subject to any work test, upper age limit or other contribution cap, but it may count towards your transfer balance cap. This cap is applicable when you move your super balance from accumulation/super savings into retirement phase. Even better, both you and your spouse can take advantage, meaning you may be able to contribute up to $600,000 as a couple.

To make a downsizer contribution, you must meet the following requirements:

•    You or your spouse have owned the home for at least 10 years before the sale
•    The home is in Australia and is or would be exempt or partially exempt from capital gains tax under the main residence exemption
•    The home is not a caravan, houseboat or any other mobile home
•    You must make this contribution into your super fund within 90 days of receiving the proceeds of sale (usually settlement date) and
•    You have not made a downsizer contribution before.

To read more about this type of contribution refer to the ATO website.

To make this contribution, complete the Downsizer contribution form.

Spouse contributions 

You may be eligible for a tax offset for a contribution made on behalf of your spouse if:

•    Your spouse (receiving the contribution) is under the age of 75
•    You and your spouses are Australian residents
•    A contribution of at least $3,000 needs to be contributed into the spouse’s account in order to qualify for the full amount of the tax offset (i.e. $540)
•    The annual income1 of your spouse (receiving this contribution) is less than $40,000

You may be eligible for a tax offset of up to $540.

To read more about this type of contribution refer to the ATO website.

(1) Broadly, annual income for these purposes is calculated as the sum of the spouse’s assessable income, total reportable fringe benefit amounts and total reportable employer super contributions.

Other caps and thresholds you should know

•    If you have a total super balance of $1.9 million or more as at 30 June of the previous financial year, you can’t make any non-concessional contributions.
•    Your total super balance will need to be below $1.68 million as at 30 June of the previous financial year, to contribute up to three years of annual caps ($330,000) under the bring-forward rule.
•    From 1 July 2023, the amount of super savings that can be transferred into a retirement pension has increased from $1.7 million to $1.9 million, but not for everyone.

Superannuation changes effective from 1 July 2024

•    Concessional contributions will increase from $27,500 to $30,000 for the 2024-25 financial year.
•    The cap for non-concessional contributions will increase to $120,000 for the 2024-25 financial year. Therefore, if you’re under the age of 75 and eligible, you may be able to contribute at least $360,000 fir the 2024-25 financial year.

Accessing your super

When you make super contributions, it’s important to understand that you can only access your super under certain rules, largely known as the conditions of release. For most people, this is when they:   

•    Reach their preservation age and retire, which varies between 55 and 60, depending on what year you were born.
•    Reach preservation age and choose to begin a transition to retirement income stream while still working.
•    Reach age 60 and cease an employment arrangement, or
•    are 65 years old (even if you have not retired).

However, you might be able to access super earlier in some special circumstances. These include permanent incapacity, severe financial hardship, compassionate grounds or if you have a terminal medical condition. Visit the Maturities and Withdrawals page for more information.

 

We're here to help

Superannuation can be a complex area to navigate. Remember also that the value of your investment in super can go up and down depending on where your savings are invested and market conditions. Before making any contributions, make sure you understand and are comfortable with any potential risks. 

To find out more:

•    Contact us online
•    Contact your financial adviser or tax agent
•    Learn how to find your missing super accounts 
•    For additional resources and the Government superannuation calculator visit Moneysmart 

What you need to know

Any advice on this website is provided by Resolution Life Australasia Limited ABN 84 079 300 379, AFSL No. 233671 (Resolution Life), and is general advice and does not take into account your objectives, financial situation or needs. Before acting on this advice, you should consider the appropriateness of the advice having regard to your objectives, financial situation and needs, as well as the relevant product disclosure statement and/or policy document, available from Resolution Life at resolutionlife.com.au or by calling 133 731, before making a decision on whether to acquire, or continue to hold, the product. 

The Target Market Determinations (TMDs) for our financial products (where applicable) can be found at Target Market Determinations (TMDs). The TMDs describe the key features and attributes of an applicable product that affect whether it is likely to be consistent with the objectives, financial situation and needs of consumers in the target market.

Resolution Life is part of the Resolution Life Group and can be contacted via contact us or by calling the phone number mentioned above.