Since Superannuation Guarantee was introduced 22 years ago, the long-term return generated on the typical ‘balanced’ super fund account has been 7.2% a year.
For the 2013/2014 year, the concessional contributions caps for over-60s has jumped to $35,000, while the concessional cap for everyone else remains at $25,000.
In July 2013, the federal government introduced a temporary concessional contributions cap of $35,000 for over-60s which has been expanded to 50-somethings from July 2014.
Q: Where do I go to find a calculator that helps me work out how much co-contribution I will be entitled to, and how much super I need to contribute to get that co-contribution?
Q: Do you need to be 60 at July 1 or could you turn 60 any time in 2013/2014 to take advantage of the new $35,000 cap?
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 $49,488 a year (for the 2014/2015 year). The tax-free giveaway is officially called the co-contribution scheme.
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.
Non-concessional contributions are more popularly known as after-tax 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.
Q: I work for myself but I also have a part-time job. I have been told that even though I receive SG from my part-time employer, I can also make tax-deductible super contributions. Is that true? And if it is true, how does it work?
You can expect some difficult conversations between employers and employees in coming months as some salaried employees discover that the Superannuation Guarantee (SG) increase of 0.25% (taking the SG rate to 9.5%) will not benefit those employees on fixed remuneration packages.
