The first issue to be aware of is the reduction in super contribution limits that start from 1 July 2017.
(This includes your employer contributions, salary sacrifice and personal deductible contributions) have been lowered from $35,000 or $30,000 to $25,000 per annum.
Have been reduced to $100,000 per annum.
People with existing salary sacrifice arrangements need to be wary of being pushed over the reduced limits. Those who have been using a Transition to Retirement strategy, which generally includes the member making salary sacrifice contributions to super, will also need to review their situation.
If the term “Personal Deductible Contribution” didn’t sound familiar, don’t worry.
This type of contribution was previously only available to substantially self-employed people but can now also be used by employees. This rule allows people to make a single lump sum contribution or ad-hoc contributions to super through the financial year and claim a tax deduction for them at years end. This change may benefit those who are not permitted to salary sacrifice to super or whose cash flow made salary sacrifice unappealing.
Lastly there was much excitement about the Contribution Catch Up provision which will allow those with a super balance of less than $500,000, to utilise the unused portions of up to 5 prior years concessional contribution limit. Don’t get too excited just yet however, as this rule can’t be used until the 2019/2020 financial year!