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 9.25%) will not benefit those employees on fixed remuneration packages. I have heard that … [Read more...]
If you own financial investments and receive the Age Pension, or you hope to claim the Age Pension, then you need to be aware of 2 important changes to the deeming rules for the Age Pension income test. These changes may mean that you’re eligible for a greater Age Pension entitlement. From 1 … [Read more...]
The question is a popular one among prospective retirees, and the answer can be best explained by dividing the question into four parts: What is the Commonwealth Seniors Health Card (CSHC)? Who is eligible for the CSHC? What year of income does Centrelink use when testing for CSHC … [Read more...]
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? A: For the benefit of other readers, I will first explain the background to the new over-60s cap. On 5 April 2013, the federal government announced that it will be introducing an … [Read more...]
For the 2012/2013 year, only one concessional (before-tax) contributions cap exists for all ages, and that cap is $25,000. Before July 2012, we had a concessional cap for under-50s and a concessional cap for those 50 years and over. From the 2013/2014 year, we will have a special concessional cap … [Read more...]
We have received a lot of emails from readers who have expressed their frustration at the unfairness of the proposed pension tax on earnings above $100,000 a year, although a small minority have supported the tax. The common theme for the majority is that many Australians sacrificed and worked … [Read more...]
Note: This list of Q&As was created on 15 April, and will be updated and extended periodically. We will include the date of any future update in this note. An important consideration when reading these Q&As is that the proposed new tax is not yet law, and probably won’t become law until … [Read more...]
Q: Where can I find the spreadsheet where you can calculate how much to put in as a co-contribution, and what the government will pay you in return for that super contribution. In other words the sliding scale of co-contributions. The schedule you refer to can be found at the link here. You … [Read more...]
Q: I am drawing an account-based pension from my SMSF. I am turning 65 in June 2013. Will I need to draw a minimum of 3% or 3.75% for the 2012/2013 year? Or, in other words, what is the determining age, the one at the start of the taxation year, or the age attained in the course of the taxation … [Read more...]
Q: I run our SMSF. I wish to retire at 55. I am a little confused about the 4% minimum rule for pensions. Do I have to withdraw 4% of my total accumulation SMSF fund, or do I move some of the assets into a pension fund and then draw 4% a year (or whatever the pension relief amount is)? A: You ask … [Read more...]
Q: On May 1 2013 I am transferring from accumulation phase to pension phase (I turn 65 on 30 April 2013). Is my super fund subject to tax (for 2012/2013 year) on income earned up until the date of conversion, or is no tax payable because the fund has been converted to pension phase? Earnings are … [Read more...]
Q: I wondered if a SMSF pension that was started at the relief rate of 3%, would it then have to increase to the 4% once the relief period expired, or would it remain at 3% because it was started at that rate? The temporary pension payment relief (75% of the usual minimum pension payments) … [Read more...]
We receive dozens of emails requesting information about moving pension funds from the United Kingdom into an Australian superannuation fund. For the UK to permit an individual to transfer retirement monies to another country, the UK government (more specifically Her Majesty Revenue and Customs, … [Read more...]
I receive a lot of questions from readers seeking information about how the non-concessional (after-tax) super contributions rules work; in particular, how the bring-forward rule works. More recently I have received several emails from readers who have fallen foul of the bring-forward rules and … [Read more...]
Q: I was an Australian citizen, age 37, and had been part of a super fund from about 1993/4. I left Australia in 2001. I see from your 12 legal reasons to cash your super article that I may be able to access my restricted benefit. You write: “Cease employment and have certain pre-1999 super … [Read more...]
