How much can you contribute to super before 30 June 2019?
As we approach 30 June, there are a few things to remember… and check… when it comes to superannuation contributions.
**Concessional Contributions **
These are the contributions paid to a super fund for which a tax deduction will be claimed. (Typically, Employer Contributions and Personal Deductible Contributions).
If you are under 65 – Between you and you employer, a maximum of $25,000 can be contributed this year.
**Note: **you can top up your employer contributions with any amount up to a total of $25,000. The 10% rule, that prevented this in the past, has been scrapped. If this is of interest to you, call us for more details.
If you are 65 or over – you must meet a work test before a super fund can accept contributions on your behalf (other than super guarantee payments, of course). You must have been gainfully employed for a period of 40 hours in a consecutive 30-day period.
If you pass the work test, concessional contributions of up to $25,000 can be made on your behalf. If you are unsure and wish to speak to someone before making a contribution, do not hesitate to contact us.
**Non-concessional Contributions **
These are the contributions for which no deduction is claimed.
The annual non-concessional contributions cap is $100,000.
The 3-year bring forward provisions mean that some people may be able to contribute up to $300,000 (and forgo making further non-concessional contributions in the following 2 years)
**But wait, there are rules **
If you are over 65, you must meet the work test as described for Concessional Contributions above. If you meet a work test, the maximum you may be able to contribute is $100,000 (the 3-year bring forward provisions are not available to you).
Your Total Superannuation Balance also plays a role in determining whether you can make non-concessional contributions.
If your Total Superannuation Balance at 30 June 2018 was more than $1.6million – you cannot make any non-concessional contributions this year.
If your Total Superannuation Balance at 30 June 2018 was between $1.5million and $1.6million, you can make a maximum amount of $100,000 non-concessional contributions (regardless of your age but remembering the work test for those over 65).
If your Total Superannuation Balance is between $1.4million and $1.5million, and you are under the age of 65, you can make non-concessional contributions of $200,000 (2-years’ worth of non-concessional contributions).
If your Total Superannuation Balance is below $1.4million, and you are under the age of 65, you can make non-concessional contributions of $300,000 (3-years’ worth of non-concessional contributions.
This is, of course, dependent on you not having triggered the 3-year bring forward rule at some time during the 2016-17 or 2017-18 financial years.
Of course, you should always check, check, check… there may well be a technicality, exception or circumstance which may prevent or allow you to make non-concessional contributions. Please call us to discuss this, if you are uncertain.
Cordner Super Advisory (AFSL 502431) can assist you with information and provide personalised or general advice in all areas of superannuation within your SMSF. Please see our Financial Services Guide here