Superannuation, Age Pension and income tax rules for 2019-20
Happy new (financial) year!
In this special edition we’ve updated all SuperGuide articles that cover the key rules, regulations, rates and thresholds for the 2019-20 financial year, and highlighted some of the key changes that come into place from 1 July 2019.
- SUPER RULES: A number of superannuation rules come into force on 1 July 2019, including the Protecting Your Super reforms, expansion of the Pension Loans Scheme and the introduction of an exemption from the work test for voluntary superannuation contributions in the first income year after retirement. You can now also take advantage of the carry-forward contributions rule for the first time. In the first two articles below you can read overviews of the main rule changes as well as the key rates and thresholds for 2019-2020.
- SUPER CONTRIBUTIONS GUIDES: Our guides for concessional and non-concessional contributions, plus co-contributions and the Low Income Superannuation Tax Offset (LISTO) have all been updated for 2019-2020.
- SUPER AND TAX GUIDES: The super tax rules can seem complicated, particularly in terms of how they apply before and after the age of 60. For your reference we have updated our comprehensive super and tax guides.
- AGE PENSION: The assets and income test and deeming rate thresholds all increase on 1 July 2019, which means that more Australians can receive a full or a higher part Age Pension. The work bonus also increases from $250 to $300 per fortnight, and the Age Pension age increases to 66.
- INCOME TAX: Learn about the legislated income tax rates for 2019-2020, including the low income tax offset (LITO), the low and middle income tax offset (LMITO) and the senior Australians and Pensioners Tax Offset (SAPTO). Note that there were also income tax cuts announced in the 2019 Federal Budget, but those have not yet passed into law.
2019-2020 SUPER RULES AND RECENT CHANGES
Navigating your way around the constant rule changes in the super system is tricky, so here’s our annual list of the modifications you need to know about.
A new financial year brings updated thresholds for a range of super measures. Take a look at the new numbers to check for opportunities.
The rules for making super contributions after age 67 have been relaxed substantially, but you must still meet a work test for one type of contribution.
The Home Equity Access Scheme can be a great way to boost your retirement income by taking a loan from the government against the equity in your home.
The Protecting Your Super Package of reforms start on 1 July 2019. These reforms are designed to protect your super accounts from being eroded by insurance policy fees and premiums that you may not require, as well as help to consolidate your low balance super accounts.
If you haven’t used all your concessional contributions cap in recent years you can use them to play catch-up and get a handy tax concession to sweeten the deal. We explain how.
SUPER CONTRIBUTIONS GUIDES
Concessional contributions make up most of the money going into your super account, so it’s important to understand what these are and how they work.
Making a personal contribution into your super can be a great way to boost your retirement nest egg and enjoy the tax-effective benefits of the super system.
A free co-contribution payment made by the government into your super account can be a great way to boost your super account if you have some money to spare.
The Low Income Super Tax Offset is a government rebate that can help boost your super and make saving for retirement a little easier.
SUPER TAX GUIDES
If you’re eligible and thinking about tapping into your super before you turn 60, it’s worth checking the tax implications first. In some cases, you may be better holding off for a while.
Once you turn 60 and start withdrawing your super, the tax advantages of the super system come into play.
AGE PENSION RATES AND THRESHOLDS
This article details the rules and limits of the Age Pension assets test (how much your savings and other assets are worth), which is one half of the means test (along with the income test) that determines how much Age Pension you could be eligible for.
A common question for those nearing or in retirement is “How much can a pensioner earn before it affects the pension?”.
Recent changes mean Age Pensioners can work and earn additional income to ease cost of living pressures without impacting their pension.
Under the deeming rules, you are ‘deemed’ to earn a certain annual rate of return on your financial assets, regardless of the rate of return you actually earn.
The age at which eligible retirees can start receiving the Age Pension has risen to 67. Bad news if you were born from 1957 on, but the good news is there are no plans to lift the age further.
Age Pension rates increase on 20 March 2024. This article also explains how the Age Pension works, and includes the latest Age Pension rates for residents, non-residents, and the transitional Age Pension.
Our Age Pension calculator gives you an estimate of your potential Age Pension entitlements for the period 20 September 2023 to 19 March 2024.
The amount of tax you pay will depend on your assessable income less a host of tax deductions and offsets. Here are the latest rates and thresholds.
Low-income earners may be eligible to reduce their tax bill by as much as $700, without lifting a finger. Check our guide to who’s eligible and for how much.
If you are eligible for the Age or DVA pension you could be in line for a handy tax rebate, depending on your taxable income and relationship status.