Super rich SMSFs, contributions guides for 2012/2013, Age Pension changes, Senior Australians Tax Offset, update on off-market share transfers and more
Highlights of the JUNE 2012 SuperGuide newsletter are:
- SUPER RICH: IS YOUR SMSF BIGGER THAN THE REST? A friend of mine claimed that a lot of SMSF members have tens of millions of dollars in assets and earn mega-bucks and don’t deserve the super tax concessions that are currently available. The reality for most SMSF members/trustees is of course very different. Click on the article link below for the real story.
- UPDATED CONTRIBUTIONS GUIDES (2012/2013 YEAR). Our contributions survival guides (for concessional contributions, non-concessional contributions, and co-contributions) are very popular with SuperGuide readers, and we have now updated them for the 2012/2013 year. You can check out the guides by clicking on the links below. You can also access them by clicking on the links at the right-hand side of the home page.
- AGE PENSION: MORE AUSTRALIANS ENTITLED TO PAYMENTS FROM 1 JULY 2012. The Age Pension income and assets tests have been adjusted again which means eligible Australians can own more assets and earn more income and still be eligible for a part Age Pension. Also, those Australians who may have just missed out on the Age Pension due to failing the income test, or assets test, may now be entitled to some Age Pension. Click on the article link below to find out more. Also, for your convenience we have included our updated Age Pension articles on the assets test, income test and latest payment rates, at the end of this newsletter.
- NO TAX IN RETIREMENT BECAUSE YOU SATO. Individuals who have reached Age Pension age have considerable scope to take advantage of the Senior Australians Tax Offset. Click on the article link below to find out more.
- SUPERANNUATION GUARANTEE: WHAT IS THE MAXIMUM AMOUNT THAT MY EMPLOYER MUST PAY? All eligible employees have a right to SG (9%), although the amount of SG you receive is subject to an upper income limit, which is indexed each financial year. Click on the article link to find out more.
- SUPER FUNDS LOSE 2.3% FOR MAY 2012, BUT HOPE TO BREAK EVEN FOR FINANCIAL YEAR. See article link below.
- UPDATE:OFF-MARKET SHARE TRANSFERS FOR SMSFS MAY NOW BE BANNED FROM JULY 2013. Starting date for the potential ban on off-market share transfers has been delayed until July 2013 (from its original start date of 1 July 2012), according to industry speculation. See article link below. We will update this article further when we have written confirmation from the Federal government about the change in timing.
JULY 2012 NEWSLETTER: Expect a BUMPER EDITION for July. Financial advice reforms have now become law (although taking full effect from July 2013), SMSF borrowing rules for property have been relaxed, and accountants will soon be able to give advice with a limited licence. We also expect to share with you, the top-performing super funds for the 2011/2012 year, tips and traps of salary sacrificing, and more.
Thanks again for your support and interest in SuperGuide.
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Recently, I was having dinner with some friends and one friend who works in the superannuation industry commented that DIY super funds, that is, self-managed super funds, were just for the super rich. The friend claimed that a lot of SMSF members have tens of millions of dollars in assets and earn mega-bucks and don’t deserve the super tax concessions that are currently available. The reality for most SMSF members/trustees is of course very different from the perceptions held by this friend of mine. Read more
In March, July and September of each year, the Federal Government changes the rules for claiming the Age Pension… for the better! The Age Pension income test and the Age Pension assets test are adjusted three times a year in line with increases in the Consumer Price Index. Read more
The combination of the Senior Australians Tax Offset and tax-free super for over-60s means that Australians of Age Pension age or over can enjoy even greater tax-free income. Read more
The maximum superannuation contribution base is used to determine the maximum Superannuation Guarantee (SG) contribution that an employer is required to make under the super laws. Read more
The median superannuation growth fund lost 2.3% in value for the month of May, and the median growth fund is sitting on a miserly gain of only 0.2% for the financial year to date (July 2011 to May 2012), according to rating company Chant West. Depending on the performance of investment markets in June, the final results for the 2012 financial year (July 2011 to June 2012) could result in a small overall loss for the year or a small gain. Read more
At the time of writing, the Federal Government is expected to defer the potential ban on off-market share transfers for SMSFs until July 2013 based on industry chatter and as a result of some behind-closed doors industry conversations with the ATO. The only date that is in the public space is 1 July 2012, although industry association, SPAA has predicted that Minister Shorten will make an announcement before the end of June, pushing back the start date to 1 July 2013. Read more
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CONTRIBUTIONS GUIDES (FOR 2012/2013 YEAR)
Superannuation contributions can be divided into two types — concessional (before-tax) and non-concessional (after-tax). Each type of super contribution is subject to a contributions cap (see table below). A contributions cap sets a limit on the amount of contributions you can make in any one year. If you exceed the cap, your excess contributions are likely to be subject to penalty tax. Read more
Non-concessional contributions are more popularly known as after-tax contributions. You may even hear them called ‘undeducted’ contributions. Such contributions are subject to a contributions cap, which sets a limit on the amount of after-tax contributions that you can make in one year (1 July through to 30 June). If you exceed the cap, your excess contributions are likely to be subject to penalty tax. Read more
The Federal Government is giving away money to anyone who makes a non-concessional (after-tax) contribution to their super fund, and who earns less than $46,920 a year (for the 2012/2013 year). The tax-free giveaway is officially called the co-contribution scheme. Read more
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AGE PENSION CHANGES FROM 1 JULY
An eligible individual must satisfy the Age Pension income test, and the Age Pension assets test to receive a full, or part, Age Pension. The assets test threshold for FULL Age Pension entitlements is adjusted only once a year, on 1 July of each year. The additional adjustments to the assets test thresholds in March and September affect Australians seeking a part Age Pension. Read more
An eligible individual must satisfy the Age Pension income test, and the Age Pension assets test to receive a full, or part, Age Pension. The income test threshold for FULL Age Pension entitlements is adjusted only once a year, on 1 July of each year. The additional adjustments to the thresholds in March and September affect Australians seeking a part Age Pension. Read more
The new Age Pension rates, effective from 20 March 2012 are set out in this article. Note that ‘pf’ stands for ‘per fortnight’. The Age Pension rates are adjusted twice-yearly – in March and September. Read more