There were three recent changes to superannuation rules, legislated by the Federal Government, which may help you save for retirement.
From 1 July 2017, the low income super contribution (LISC) was replaced by the low income super tax offset (LISTO).
The details are essentially the same: those earning less than $37,000 a year can expect a refund of 15 per cent of their yearly concessional (pre-tax) contributions, up to a maximum $500. This effectively means most low-income earners will pay no tax on their superannuation contributions.
How it works: If you are eligible, all you need to do is lodge your tax return with the ATO. They’ll assess it, work out your adjusted taxable income and pay the LISTO directly into your super account for you. If you do not have to lodge a tax return, the ATO will work out whether or not you are eligible and pay the LISTO directly into your super account.
More spouses are now able to top up the superannuation of their lower-income earning spouse and claim up to $540 as a tax offset. From July 1, the spouse income threshold for the spouse tax offset increased from $10,800 to $37,000 (The tax offset amount will gradually reduce for income above $37,000 and completely cuts off when your spouse’s income reaches $40,000).
How it works: Spouse contributions need to be made to a complying superannuation fund or a retirement savings account (RSA) on behalf of the receiving spouse (married or de facto). Additional eligibility conditions apply and these contributions count towards the receiving spouse’s non-concessional contributions cap. QIEC Super accepts spouse members and spouse contributions.
From 1 July 2017, all individuals under the age of 65, and those aged 65 to 74 who meet the work test, are able to claim a tax deduction for personal contributions made to eligible superannuation funds (up to the concessional contributions cap).
Previously, an income tax deduction for personal contributions was only available to people who earned less than 10 per cent of their income from salary or wages. This limited the ability for people in certain work arrangements to benefit from additional concessional contributions to their superannuation.
How it works: To make a personal contribution to QIEC Super you can make a payment from your nominated bank account via Direct Debit or BPAY. To access the tax deduction, you can lodge a notice of your intention to claim the deduction with QIEC Super (or the superannuation fund where your personal contribution was made). Generally, this notice will need to be lodged before you lodge your income tax return. You can choose how much of your contributions to deduct. You will need to download this form from the ATO.