As we approach the end of yet another financial year, we recommend that you take time to consider what steps you can be taking to tax effectively manage your superannuation.
1. Making a Contribution
The contribution limits for the year ending 30 June 2023 are as follows:
|Contribution Type||Contribution Cap|
|Concessional contributions cap |
(tax deductible contributions)
|Annual Cap = $27,500|
|Non-concessional contributions |
|Annual Cap = $110,000 or|
Bring Forward Arrangement = up to $330,000
Bring Forward Arrangements (for non-concessional contributions)
Individuals who are 75 years old or younger 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 for 2023
- If you are an individual, you no longer need to meet a work test to make non concessional contribution;
- Individuals that are aged between 67 and 75 must satisfy a work test (40 hours of paid employment in a 30 day period) if they are to make concessional contributions (employer or personal contributions claimed as a tax deduction);
- If your total super balance exceeds $1.7 million, we recommend you check your total super balance at 30 June 2022 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. If you are making contributions close to 30 June, make sure you allow enough time for them to clear and be physically received by your super fund prior to 30 June 2023.
- Ensure any contributions made are within your contribution limits, particularly after taking into consideration any contributions already made your employer(s).
2. Are you over 55 and considering selling your home?
New rules starting 1 January 2023 have lowered the age by which you can access the downsizer contribution measures to age 55 (previously age 60).
Individuals aged over 55 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 is not a non-concessional contribution and will not count towards your contribution caps. It 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 2022, 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 2023.
The temporary 50% reduction in the minimum annual pension requirements continues to apply up until 30 June 2023. The full set of standard and temporary rates for each age group for the 2023 financial year are outlined in the table below:
|Age||Minimum Payment Rates |
|Reduced Minimum |
Payment Rates (Temporary)
|65 – 74||5%||2.5%|
|75 – 79||6%||3%|
|80 – 84||7%||3.5%|
|85 – 89||9%||4.5%|
|90 – 94||11%||5.5%|
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 effectively revert back to the “accumulation phase” from 1 July of that financial year, where all investment 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. Do you have a Self Managed Superannuation Fund?
If you operate a Self Managed Superannuation Fund (SMSF), prior to 30 June 2023 it is important to ensure:
- Any prior year management points raised by your auditor have been addressed;
- You have obtained sufficient and appropriate evidence to support the annual trustee assessment of the market value of all unlisted investments owned by the SMSF. With property investments being one of the most common unlisted investments, the ATO have indicated that only one form of evidence (such as a real estate kerbside valuation) is generally NOT sufficient on its own and must be accompanied with another form of evidence (such as comparable sales);
- The SMSF’s investment strategy has been reviewed to ensure the fund’s investments are still in line with the strategy. Ideally, this review should be noted by the trustees annually in writing (minuted) as evidence of the review;
- Any property trust profit distributions owing to the SMSF from the 2022 financial year have been paid;
- 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; and
- For individuals receiving employer contributions into their SMSF, you may need to update your employer with a new Electronic Service Address (ESA). The Australia Post ESA has been discontinued and will need to be changed to a new provider from 1 July 2023. If you require any assistance with making this change, please contact our office.
Contact Us Today
We are here to support you through your superannuation year end requirements. If you have any questions regarding Superannuation 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.
Australian Taxation Office (2022, August 22), ‘Contribution Caps‘, Australian Taxation Office.
Australian Taxation Office (2022, December 15), ‘Downsizing contributions into superannuation‘, Australian Taxation Office.
Australian Taxation Office (2023, April 5), ‘Key Superannuation Rates and Thresholds‘, Australian Taxation Office.