The end of the financial year is a great time to take stock of your superannuation and to set up some strategies and goals to help you achieve your ideal retirement.
Generally, your employer will pay an extra 9.5% of your everyday earnings into your super account. You can also make your own contributions on top of these payments to boost your retirement savings and in some cases, lower your taxable income which means more money for you overall.
Salary sacrifice is a simple, effective way to make extra contributions to your super. Because the extra money is taken from your pre-tax earnings and paid into your super account directly by your employer, you may not even notice the deduction. And, depending on your situation, you may enjoy tax benefits associated with a lower taxable income.
It’s important to note that contributions made via salary sacrifice count towards your $25,000 annual concessional contributions cap. It’s also worth considering that in some instances though you may be better off financially if you make contributions from your after tax income.
Our free, online Super Advisor can help you compare the benefits of each option.
After-tax contributions are made with your own savings or after-tax income which you don’t plan to claim a tax deduction on. The annual limit for after-tax (non-concessional) contributions for members with less than $1.6 million in their super as at 1 July of the current financial year is $100,000.
In instances where your account balance is less than $1.4 million as at 1 July of the current financial year and you have not reached your cap for the previous two years, you may be eligible to ‘bring-forward’ unused portions of your after-tax contributions cap to pay up to $300,000 into your super.
For example, if you paid no extra money into your super during the 2016/17 financial year, and $50,000 during the 2017/18 financial year and your account balance on 1 July 2018 was $400,000, you would be eligible to make up to $250,000 of after-tax contributions to your account during the current financial year.
Depending on your circumstances you or your spouse may be eligible to contribute to each other’s superannuation. Spouse contributions can be a useful way to boost your combined savings while reducing your or your partner’s taxable income.
Where your spouse or partner’s assessable income is less than $40,000 for the tax year, you may be able to claim a tax offset of up to $540 when you make a contribution of your own money to your spouse or partner’s super account. The full $540 is available where the receiving partner’s assessable income is $37,000 or less. The offset reduces gradually as spousal income approaches $40,000 at which point the offset will no longer apply.
If your super balance as of 1 July 2018 was less than $1.6million, your assessable income for the tax year is less than $52,697 and you’ve paid at least $1000 of your own after-tax money to your super during the year, you’re eligible for a bonus contribution of up to $500 paid to your super by the Federal Government. The full $500 co-contribution is available to those with assessable income’s less than $37,697 with the amount reducing gradually to $0 for those who earn above $52,697.
Voluntary, after-tax contributions can be made to Hostplus via ongoing direct debit from your bank account. One-off and ongoing payments can also be made through BPAY.
You can arrange a direct debit by completing a Direct Debit Authority Form and returning it to us in the post. This gives us permission to deduct a regular amount at the frequency of your choosing from your bank account until you tell us otherwise.
Every Hostplus account has a unique BPAY reference number so you can make voluntary, after-tax contributions to your super. Check your Digital Member Card, your Member Online Account or your Hostplus statement to find your BPAY details today.
Depending on your account balance as at the start of the financial year and the type of contributions you’re making to your super, there are limits to the amount of money you can contribute.
Currently, before-tax (concessional) contributions are capped at $25,000 per year. Commencing 1 July 2019 individuals will be allowed to carry-forward unused cap amounts. Individuals with a total superannuation balance of less than $500,000, who have not reached the $25,000 cap as at 30 June 2019, will be able to carry forward the unused amounts to contribute in future years. Unused cap amounts will carry forward for a maximum of five years.
After-tax (non-concessional) contributions are capped at $100,000 for members with balances less than $1.6 million as at 1 July 2018.
The Bring Forward Rule allows an individual who is under 65 at the end of the financial year to bring forward up to two financial years’ worth of the non-concessional contribution cap, effectively permitting them to contribute up to three years’ worth of the cap, disregarding the annual cap in each of those financial years.
For example, if an individual under the age of 65 contributed $150,000 as a non-concessional contribution in the 2018/2019 financial year, they would have exceeded the $100,000 non-concessional contribution cap by $50,000 and therefore have triggered the Bring Forward Rule.
They can now put in another $150,000 over the following two years without breaching the cap. Please note, this only applies if your total superannuation balance is less than 1.4 million at the end of the previous financial year.
The Australian Tax Office provide detailed information about contribution limits including helpful fact sheets which may help you to make informed choices about contributing to your super.
Personal contributions should be lodged no later than Monday 24 June to be certain they are received before the end of the financial year.
You can make a personal contribution via BPAY. Your private BPAY details for your Hostplus account can be found on Hostplus Member Online. You’ll find the information you need under Voluntary Contributions in the Member section of the main menu.
The First Home Super Saver Scheme is designed to help Australians to enter the property market. Under the scheme, eligible members can make voluntary contributions into their super account which they can later withdraw to help purchase their first home.
Singles can contribute up to $15,000 per year to a lifetime maximum of $30,000 and couples can contribute a combined total of $30,000 per year to a lifetime maximum of $60,000.
These funds as well as associated investment earnings as calculated by the Australian Tax Office (ATO) can be later withdrawn to assist in the purchase of property. The earning potential combined with tax advantages could boost savings by as much as 30% when compared to a standard savings account*.
*Source: The Australian Government Fact Sheet 1.4 First Home Saver Scheme Budget 2017 available here. You may also access an estimator from the Government website budget.gov.au/estimator to better understand the advantages of saving for a home deposit through super.
The Federal Government introduced the downsizer measure to reduce pressure on housing affordability. The measure allows eligible members aged over 65 to contribute up to $300,000 from the sale of their primary residence (for 10 or more years), without affecting their annual contribution limits or the $1.6 million total superannuation balance cap.
If you need to access the MyGov portal to submit your tax assessment you will need to use the Hostplus fund ABN 68 657 495 890.
If you have changed funds in the last six months you may need to use the previous fund’s ABN.
Members aged up to 64 and those aged 65 to 74 who meet additional work-test criteria, may be able to claim a tax deduction for personal, after-tax, contributions.
Please note, if you are under 18 or over 75, additional restrictions may apply, visit ato.gov.au for more details.
Eligible members can download a Notice of intent to claim form from the ATO which can be posted to Hostplus at Locked Bag 5046, Parramatta NSW 2124.
If you wish to receive your statement via post, please update your communication preference online or contact us
Please note, statements ending 30 June 2019 will be available online and via post from September 2019.
Learn more about contributions including everything you need to complete your tax assessment including Hostplus’ ABN below. You’ll also find helpful information about the First Home Super Saver Scheme and the Downsizer measure for over 65s.