6 minute read
FINACIAL MOMENT
EOFY SAVVY SUPER STRATEGIES
Damian Gibson Financial Adviser, Elevate Wealth Solutions
WITH the end of another financial year fast approaching, it’s time to get your finances in order.
Want to help boost your retirement savings while potentially saving on tax?
Here we will discuss some smart super strategies to consider before the end of the financial year. TAX-DEDUCTIBLE SUPER CONTRIBUTIONS
If you contribute some of your after-tax income or savings into super, you may be eligible to claim a tax deduction.
This means you will reduce your taxable income for this financial year, potentially pay less tax, and boost your super balance all at the same time.
The contribution is generally taxed at 15 per cent in the fund.
Depending on your circumstances, this is possibly a lower rate compared to your marginal tax rate, which could be up to 47 per cent (including Medicare Levy).
Therefore, this could save you up to 32 per cent in tax.
Once you’ve made the contribution to your super, you need to send a valid Notice of Intent form to your super fund and receive an acknowledgement from them before you complete your tax return, start a pension, withdraw or rollover the money.
Keep in mind that personal deductible contributions count towards the concessional contribution cap, which is $25,000 for the 2020/21 financial year.
However, you may be able to contribute more than that without penalty if you did not use the whole $25,000 cap in 2018/19 and 2019/20 and are eligible to make ‘catch-up’ contributions. CONVERT YOUR PERSONAL SAVINGS INTO SUPER SAVINGS
Another way to invest more in your super is to use some of your after-tax income or savings, by making a personal non-concessional contribution.
Although these contributions do not reduce your taxable income for the year, you can still benefit from the low tax rate of up to 15 per cent that is paid in super on investment earnings.
This tax rate may be lower than what you would pay if you held the money in other investments outside super.
Before you consider this strategy, ensure the contribution does not push you over the non-concessional contribution cap, which in 2020/21 is $100,000, or up to $300,000 if you meet certain conditions and your super balance is under $1.6 million.
TOP-UP YOUR SUPER WITH HELP FROM THE GOVERNMENT
If you earn less than $54,837 in the 2020/21 financial year, and at least 10 per cent of that income is from your job or a business, you may consider making an after-tax super contribution.
If you do, the Government may make a ‘co-contribution’ of up to $500 into your super account.
The maximum co-contribution is available if you contribute $1,000 and earn $39,837 per annum or less.
You will receive a lower amount if you contribute less than $1,000 and/ or earn between $39,837 and $54,837 per annum. BOOST YOUR SPOUSE’S SUPER AND REDUCE YOUR TAX
If your spouse is not working or earns a low income, you may want to consider making an after-tax contribution to their super account.
This strategy could potentially benefit you both, as your spouse’s super account gets a boost and you may qualify for a tax offset of up to $540.
You may be able to get the full offset if you contribute $3,000 and your spouse earns $37,000 or less per annum (including their assessable income, reportable fringe benefits and reportable employer super contributions).
If you contribute less than $3,000, or your spouse earns between $37,000 and $40,000 per annum the tax offset available will be lower.
There is no doubt that Superannuation is one of the most effective ways to save for your retirement.
Employing some of these strategies before you retire can have a really positive impact on your super balance.
Before making any contributions to your super, it is important you understand all the associated rules, benefits, and consequences to ensure it is right for you.
A financial adviser will be able to guide you through these strategies and give you confidence in your decision making.
*Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.
Hank Jongen General Manager Services Australia
DID you know Services Australia offers a number of specialist services you can access for free?
One I often refer people to is the Financial Information Service (FIS).
FIS provides free, independent and confidential information, as well as tools and resources to help you make informed decisions about your current and future financial needs.
FIS is available to everyone, not just people getting government payments and services.
The service helps people of all ages and circumstances, to make informed decisions about their finances, particularly people with complex financial situations, or those who are financially vulnerable.
Financial Information Service officers are specialist staff who are available through a national phone service.
They’re located across the country in more than 130 Services Australia service centres, and have an expert understanding of income support payments and financial matters.
FIS officers can help you if you’re managing a change in your circumstances, like being newly employed, being made redundant, dealing with an illness or disability, becoming a parent, getting divorced or becoming a carer.
They can help people who want to save for the future, are returning to work, thinking about or preparing for retirement, receiving compensation payments, or thinking about moving into aged care.
FIS officers can explain: how financial products work how government payments work resources that may help you with your financial matters.
They provide tailored financial information, education and support.
However, they’re not financial planners or financial counsellors, so they won’t promote or provide advice on purchasing investment products.
FIS officers also won’t make decisions about your payments.
To speak to the Financial Information Service, phone 132 300.
Say ‘Financial Information Service’, when prompted for the reason of your call.
This will take you through to a FIS officer who will help you with your situation.
Depending on your circumstances, the FIS officer may book a further face-to-face interview for you, in or near your local Services Australia service centre.
TASMANIAN Refugee Legal Service (TRLS) has been awarded a $7,000 grant from the Harcourts Foundation to help reunite families separated by war and conflict.
The armed Tigray conflict has affected many Tasmanian residents with refugee backgrounds who have family members caught in the conflict, which is ongoing in the Tigray region of Ethiopia.
The grant from Harcourts will help TRLS assist those affected with making applications to reunite with their family members.
TRLS Principal Lawyer Patrick O’Connor hoped they could alleviate some of the distress the conflict, which has reports of significant war crimes, is causing for separated families in Tasmania.
The conflict, which erupted in November 2020 from rising tensions between the Ethiopian government and the Tigray People’s Liberation Front (TPLF), has resulted in around 62,255 Tigrinyian refugees spilling across the border to Sudan.
“Many have family members currently living in refugee camps in Ethiopia, Sudan and Eritrea,” Mr O’Connor said.
UNICEF estimates 1.3 million children cannot go to school due to both the conflict and COVID-19. The region has been without electricity, water and food for several weeks.
“It is hoped that this legal advice and casework will change the pathway of many people’s lives and result in families being reunited and connected again in Tasmania,” Mr O’Connor said.
TRLS will hire an expert lawyer to provide free legal advice, which will help address the recent spike in Tasmanian residents requesting assistance with visa applications for family members from Ethiopia and Eritrea caught in the conflict.
Mr O’Connor said the TRLS legal advice could be the difference between refugees finding safety with family members in Australia when borders reopen or remaining separated and endangered.
He said the TRLS were “very grateful to the Harcourts Foundation.”
“We estimate this project will have a significant impact on the Tasmanian community.”
For more information about Harcourts grant opportunities, visit https://harcourtsfoundation.org/apply/.
For more information about the work of the Tasmanian Refugee Legal Service, visit https:// www.facebook.com/ rlstasmania/ or https:// www.trls.org.au/.
