Have you stopped to consider what you can be doing to tax-effectively manage your super? We have compiled the following list of items you may wish to action in the lead up to 30 June 2022.
1. Making a Contribution
The contribution limits for year ending 30 June 2022 are as follows:
| Contribution Type | Contribution Cap |
| Concessional contributions cap (tax deductible contributions) | Annual Cap = $27,500 |
| Non-concessional contributions (undeduced contributions) | Annual Cap = $110,000 or Bring Forward Arrangement = up to $330,000 |
Bring Forward Arrangements (for non-concessional contributions)
Individuals who are under 67 years old may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap in a single year. The amount of “bring forward” that can be accessed is dependent on an individual’s superannuation balance as follows:
| Total Superannuation Balance | Bring Forward Available |
| Less than $1.48m | $330,000 |
| Between $1.48m and $1.59m | $220,000 |
| Between $1.59m and $1.70m | $110,000 |
| Greater than $1.70m | NIL |
Our Contribution Tips
- The work test age is now 67 (previously 65). If you are aged between 67 and 75 you must satisfy a work test (40 hours of paid employment in a 30 day period) before making a contribution;
- Does your total super balance exceed $1.7m? Check your total super balance at 30 June 2021 to determine your eligibility before making a non-concessional contribution;
- Contributions made by EFT or BPAY are not deemed to have been made until the contribution appears in your super fund’s bank account. This could be some days after you initiate the transfer;
- Ensure contributions are physically received by your super fund prior to 30 June 2022; and
- Ensure any contributions made are within your contribution limits, particularly after taking into consideration any contributions already made by your employer(s).
2. Are you over 65 and considering selling your home?
Individuals aged over 65 who have sold their longstanding principal place of residence, may be eligible to contribute up to $300,000 to their Super Fund (without having to satisfy the work test).
The downsizer contribution does not count towards your non-concessional contribution cap and can still be made if you have a total super balance greater than $1.7 million.
Please review our previous article to see whether you meet the eligibility criteria.
3. Carry-forward Unused Concessional Contributions
If you have a total superannuation balance of less than $500,000 at 30 June 2021, you may be entitled to make ‘carry-forward’ concessional contributions in addition to the annual $27,500 concessional contributions cap. Unused amounts of your concessional contributions cap accrued from the 2018/19 financial year can be carried forward for a maximum of 5 years.
Please refer to our previous article for further information on carry forward concessional contributions.
4. Satisfying the Pension Requirements
If you are receiving a pension from your Super Fund, you must withdraw a pension that is within the applicable minimum and maximum limits prior to 30 June 2022.
Due to the pandemic, the ATO temporarily reduced the minimum annual pension requirements by 50%. The reduced minimum continues to apply for both the 2022 and upcoming 2023 financial year. The full set of standard and temporary rates for each age group for the 2022 financial year are outlined in the table below:
| Age | Minimum Payment Rates (Standard) | Reduced Minimum Payment Rates (Temporary) |
| Under 65 | 4% | 2% |
| 65 – 74 | 5% | 2.5% |
| 75 – 79 | 6% | 3% |
| 80 – 84 | 7% | 3.5% |
| 85 – 89 | 9% | 4.5% |
| 90 – 94 | 11% | 5.5% |
| 95+ | 14% | 7% |
If the annual pension drawn is outside of the minimum and maximum ranges, the pension requirements will not be met and your superannuation pension balance will revert back to “accumulation phase” where all income and capital gains are taxed at 15%.
Members also need to be careful to not exceed their maximum pension as penalties apply for illegal early access to superannuation benefits.
5. Director Identification Numbers
If you operate a Self Managed Superannuation Fund (SMSF) you may have a corporate trustee or may be intending to do so. Where this is the case, directors of the trustee company must apply for a Director Identification Number (DIN). A DIN is a unique identification number that once applied for, will stay with a director forever. A main driver of the implementation of the DIN regime is to help address illegal pheonixing activities by increasing Director accountability and traceability.
Applying for a DIN can be completed by the individual and can be done in several ways. Refer to our DIN Fact Sheet for information on how to apply for your DIN.
For further information regarding the DIN regime or applications, please read our previous article and don’t hesitate to get in touch with your Davidsons Team Member.
6. Do you have a Self Managed Superannuation Fund?
If you operate a SMSF, prior to 30 June 2022 it is important to ensure:
- Any prior year management points raised by your auditor have been addressed;
- You have obtained market valuations for any unlisted investments owned by the SMSF (e.g. property);
- The SMSF’s investment strategy has been reviewed and minuted;
- Any property trust profit distributions owing to the SMSF from the 2021 financial year have been paid; and
- Your SMSF has been complying with ATO Event Based Reporting requirements which are applicable in instances such as commencing / stopping a pension and withdrawal of certain lump sums.
Contact Us Today
We are here to support you through your superannuation year end requirements. If you have any questions regarding our Superannuation Tax Tips and you would like further support, please don’t hesitate to contact our Manager of Self Managed Superannuation Funds Simon Abbott on 03 5244 6867.
This article was written by Manager of Self Managed Superannuation Funds Simon Abbott.
Disclaimer: The information provided in this article is factual in nature and objectively ascertainable and, therefore, does not constitute financial product advice. Importantly, the factual information that has been supplied does not take into account your personal circumstances, objectives or goals.
Davidsons is not licensed to provide any financial product advice nor make any recommendations in respect of any financial product. If you require such advice, you will need to consult a financial adviser who is licensed to provide financial product advice before you make a decision on a financial product.
References
Australian Taxation Office (2022, March 25), ‘Contribution Caps‘, Australian Taxation Office, accessed June 8, 2022.
Australian Taxation Office (2022, February 28), ‘Downsizing contributions into superannuation‘, Australian Taxation Office, accessed June 8, 2022.
Australian Taxation Office (2022, April 11), ‘Key Superannuation Rates and Thresholds‘, Australian Taxation Office, accessed June 8, 2022.