2013 Super changes that are now law
If you’re earning less than $37,000 each year, the government co-contribution is now limited to $500 as part of the Low Income Super Contribution scheme. Your entitlement will be calculated and contributed to your fund when you lodge your income tax return.
Since 1 July 2013, the Super Guarantee (SG) rate has increased from 9% to 9.25% of your ordinary earnings. Make sure you check your next superannuation statement to ensure this increased amount has been deposited by your employer.
Age limits for the SG have been removed so provided you meet eligibility criteria, you will continue to qualify for the SG beyond age 70.
If you are over 60 years of age this financial year your concessional contributions cap will increase from $25,000 to $35,000 p.a. From 2014/15, those over 50 may contribute up to $35,000.
If your annual income is above $300,000, the contributions tax has increased from 15% to 30% and was backdated to apply from 1 July 2012.
As an employer you must increase your SG contributions from 9% to 9.25%. You will also be required to make SG contributions to all eligible employees aged 70 years or over.
Employers with 20 or more employees must introduce the new data and e-commerce standard from 1 July 2014. If you have fewer than 20 employees you have until 1 July 2015. To learn more, the ATO website www.ato.gov.au provides further information.
Excess contributions can be refunded and will be assessed at marginal tax rates. In addition, excess amounts will attract an interest charge.
The SMSF supervisory levy will increase to $259 and will move from an arrears payment to being paid in advance.
SMSF trustees are required to consider insurance within the super fund as part of the overall investment strategy. After July 2014, the type of insurance cover will be limited to benefits that are consistent with normal superannuation release conditions such as death or a terminal illness. If you have been considering trauma or income protection cover inside your super fund, speak with your financial adviser about establishing this cover before 30 June 2014.
Tighter administration and governance rules cover:
- auditor registration,
- related party transactions,
- illegal early release,
- investment strategies,
- asset separation and valuation.
Please contact us for further details on how these changes might affect you.