New Financial Year Super Checklist

July can feel like a clean slate, but your superannuation does not reset itself. We walk through the practical steps we use to get your super “house” in order for the new financial year, starting with concessional contributions: the employer 12% Super Guarantee, salary sacrifice, and personal deductible contributions. We explain why these are taxed at 15% inside super, how the concessional cap works, and how to avoid the nasty surprise of going over it.

We then get specific about the moves that people often miss. Carry forward concessional contributions can let you use up to five years of unused cap space, which matters if you have a higher income year, a bonus, or a big capital gain and need a larger deduction. If you are making a personal contribution and claiming it, we spell out the critical admin step: lodging a Notice of Intent with your fund and getting the acknowledgement back before you lodge your tax return. We also cover MyGov as the hub for checking super details, and we unpack the government co contribution so you understand the eligibility rules and the trade-off between receiving the co contribution and claiming a deduction.

Listener questions take us into the real life decisions: keeping two super funds to hold onto valuable insurance, whether it is worth contributing early versus end of June, and what the downsizer contribution really allows when you sell a home. We finish by clarifying how property sales and small business proceeds interact with super contribution caps, plus the basics on unpaid super and rolling from an SMSF to an industry super fund. If this helped, subscribe, share it with a mate who is sorting retirement, and leave us a review so more Australians can find the guidance.

DISCLAIMER: This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. Because of that, you should consider if the information is appropriate to you and your needs, before acting on it. If you’re confused about what that means or what your needs are, you should always consult a licensed and trusted financial planner. Unfortunately, we cannot guarantee the accuracy of the information in this podcast, including any financial, taxation, and/or legal information. Remember, past performance is not a reliable indicator of future performance. The Rask Group is NOT a qualified tax accountant, financial (tax) adviser, or financial adviser. Access The Rask Group's Financial Services Guide (FSG): https://www.rask.com.au/fsg

Transcript

New Financial Year Super Checklist

SPEAKER_00 0:00

The Talk Investing podcast and blog discusses investment advice from our previous podcasts and radio shows by Remo Greco and Marco Melado. Learn all things around retirement and investing.

SPEAKER_01 0:25

On the money.

SPEAKER_07 0:26

Eight past ten. Summer in Victoria might feel like a hazy dream to you, but maybe you still feel like you're only just gearing up for the year. Well, welcome to the start of a new financial year, which is actually the perfect time to get your financial house in order. There are things you can do now to make your life easier in the long run, but you do need to get yourself organized. Marco Mulato, superannual specialist, is here to help. Hello, Marco.

SPEAKER_04 0:56

G'day, Lisa. Nice to be back. And how are you?

SPEAKER_07 0:59

I am feeling excited about this list that you're going to give us. Believe it or not, I love homework. 1-300-322-774-0437-774-774. We're getting your superannuation house in order. Anything we share here is general in nature, doesn't take into account your personal circumstances, financial situations, or needs. Okay, Marco. So the first thing that comes to mind for me is concessional contributions, which we may have done just before the end of financial year, but there's other documents that we might need to fill out. So I have heard from a few people that they may have missed some of our earlier chats about basic things. So I do want to ask you first, what is a concessional contribution again?

Concessional Contributions And The 30k Cap

SPEAKER_04 1:47

Good. Okay. So this is probably one of the main ones as well, because everybody's receiving one. When your employer needs to contribute on your behalf, so that 12% now it's this year of your gross salary, that's called a concessional contribution. That means it goes into super, there's 15% tax deducted, and the rest goes into your fund. Why is that good? Because if you had earned that as normal wages and salary, it would have been taxed at your marginal rate, which is a lot higher than 15%. So they call it a concessional contribution. The other one is when we salary sacrifice. So when we ask our employer to put in a bit more than that 12% they have to, so it's coming out of your wages, that's going into your superfund, that's a concessional contribution. And then the other one is if we just make a contribution ourselves from our bank account and we want to claim a tax deduction for it, that's also a concessional contribution. Why do we do them? We do them because the tax rate is much lower than the earnings rate that we have ourselves as individuals. So we get a tax saving, it bumps our super balance up, gives us a tax deduction, which is nice. Let's remember that the cap on all of those concessional contributions, so no matter how you make them, you need to add them all up, and they really can't surpass $30,000 for the year. So at the start of a financial year, it's good to kind of work that out. What you think you may receive from your employer to give you an idea of how much you can then contribute over the year so that you don't go over the cap.

SPEAKER_07 3:21

And is that the order that you've given us as well? So the ideal is that we have an employer who can contribute and then maybe we can do some salary sacrifice, and then third in the pecking order is to top it up ourselves.

SPEAKER_04 3:34

That's normally the order we like to work in because the employer contribution is obviously an obligation, so that's gonna go in no matter what. Salary sacrifice we like because it's automated, it's disciplined, it's going in regularly, you can set and forget it almost. And then the third one is the bit that gives you some wiggle room, which says, right, we're now getting to the end of the financial year. Am I gonna have any space to perhaps make a bit more? Can I make a bit more? And it get lets you plan around your cash flow a bit better.

SPEAKER_07 4:05

And so what other things might we be doing in relation to this category right now?

Carry Forward Catch Up Contributions

SPEAKER_04 4:12

So the other important one I think which is really, really becoming popular, is this one we call catch-up concessional contributions or carry forward concessional contributions. And that allows you to use previous years' caps that you may not have used up. So we may not get to 30,000 every year. In fact, a lot of people won't get to 30,000 every year. There may be a particular year where you have some extra income, a bonus, you've sold an asset, you've just got extra money. You have an ability to use prior year's caps and bring them in all together in the one year. So you could contribute quite a large amount of money in one year, get a very large tax deduction and still be within the rules. So why do people do that? Generally, people are doing that when they have come across a lot more income in a particular year, so either sale of a property or an asset that's made a capital gain, they need a big deduction to get that down. We start to look at whether we can use these catch-ups.

SPEAKER_07 5:11

And when you're talking about that, but that had to be done before the end of financial year, didn't it? Or are we calculating it for the future?

SPEAKER_04 5:18

Aaron Ross Powell We can calculate it for the future. So we can look at this year and say, right, oh uh am I going to be in a position where I have more income than I normally have? Okay, I am. Great. How can I reduce that accessible income? Well, let's look and see how many catch-ups I've got. The way to check your catch-ups is to go under my gov in the superannuation tab, and they'll give you a list of all your prior years catch-up amounts. Yeah. So it's pretty easy to do these days. And that could give you a very large tax deduction you wouldn't otherwise get.

SPEAKER_07 5:50

The other thing we need to do is we need to submit a document talking about the top-ups or the concessional contributions,

Notice Of Intent For Deductions

SPEAKER_07 5:57

don't we? To our super fund and then get them to approve something.

SPEAKER_04 6:00

Yeah, so this is important for a personal contribution. So don't worry about your employer ones or your salary sacrifice. They're pre-arranged, so they're already going to be categorized as concessional. But if you've decided to put in an amount yourself and you want to claim that as a tax deduction, there's another step to that, which is a notice of intent. And so you get that from your super fund. It's pretty easy to fill out. You nominate the amount you want to claim as a deduction, you send that into the fund. The fund must acknowledge it. So they'll send you a uh a response back saying, yes, we acknowledge your form and uh and everything's in place, and then therefore that allows you to claim that as a deduction in your tax return. So second step is important in that one, otherwise the claim goes awry.

SPEAKER_07 6:48

All right, we'll take your calls and your text messages now. 1-300-322-774-0437-774-774. You're listening to Lisa Leong on ABC Radio and Marco Mulado, our superannuation specialist, is here to take your general super related

MyGov Access And Government Co Contribution

SPEAKER_07 7:08

questions. This one from Andrew. Marco, how do I get my group certificate if I don't have a MyGov account?

SPEAKER_04 7:15

Uh you probably have to go to the ATO or have your employer download it for you and give it to you. So MyGov's the unfortunately the the one place where everything is stored these days. And if we just don't have a login for it, it gets a little bit difficult. But I would go to employer and then if not employer, ATO.

SPEAKER_07 7:36

Is it worth getting a MyGov account at first?

SPEAKER_04 7:39

Very, very valuable. Everyone should have one, and I know everyone can't because not everyone is necessarily going to be on a computer and have the skills to do that. But just about everything you need in relation to centre link, superannuation, tax office is now in this central MyGov hub that the government has provided. So if you can organize a login for that, please do so and it will give you access to a lot of information and services.

SPEAKER_07 8:05

All right. Hi Lisa, can you please ask Marco what are the rules for low-income earners to claim the government super bonus if you contribute yourself?

SPEAKER_04 8:15

Yeah, so this is uh this kind of happens automatically. So this is the government co-contribution where you can contribute $1,000 and get $500 from the government as a as a co-contribution. If you put your $1,000 in, the government does it all in the background for you. So they match uh they talk with the ATO and they match the yeah.

SPEAKER_07 8:35

It'll know your income is less than forty seven thousand four hundred and eighty-eight dollars.

SPEAKER_04 8:41

It'll see that the thousand dollars has gone in. It'll see that.

SPEAKER_07 8:44

Does it have to be a thousand dollars exactly?

SPEAKER_04 8:46

To get the full five hundred it has to be. But you could put in less than on the nose. You put a thousand, you'll get five hundred. But if you put eight hundred in, for example, you might get four hundred. So you you still can receive something if you don't put in the full thousand, but the full thousand is going to get you the full five hundred.

SPEAKER_07 9:02

Anything else we need to know about the government co-contribution? Aaron Ross Powell, Jr.

SPEAKER_04 9:05

Not really. You've got to be under seventy-one. Uh you've got to have under two million dollars in your superfund, which most people have. Other than that, it's a pretty good little benefit.

SPEAKER_07 9:15

Uh we are taking your calls 1-300-322-774-0437-774-774. We are looking at the things that you might think about doing right now, um even though you might feel relaxed because you thought the end of financial year is over. We're going to continue this conversation after this.

SPEAKER_08 9:34

Everyone's an expert at something. It's what makes us all special. If only that were true.

SPEAKER_02 9:39

Join Tom Gleason for brand new hard quiz. No expert subject turned away. Wednesday nights on ABC TV and AVC iView.

SPEAKER_01 9:55

On the money.

SPEAKER_07 9:56

Lisa Leong with you. 17 past 10. Marco Millardo, superannuation specialist, is in the house. We are taking your questions. And Tom from Elstonwick has called

Using Two Funds To Keep Insurance

SPEAKER_07 10:06

in. G'day, Tom.

SPEAKER_09 10:07

Hey, good morning, Lisa and Marco. Just want to ask you one question. I got a super account A, which my contribution from my employer goes into. And I have a super account B, which when I was a burger flipper, I joined that super and I found out that uh account B has a good insurance. So I kept it. I have a really small amount. I have a small amount of super there, and I contribute like a 50 bucks a month. And I don't have a super A, which my super contribution, which is a large one. I don't have any insurance there. Do you think it's a good strategy or what's the benefit and disadvantage of having this system set up?

SPEAKER_04 10:48

It's actually a very common strategy. So I don't see much wrong with that. The insurance is valuable, so you want to keep that in the fund. And to keep that in the fund, we just need to keep the fund open and make sure you contribute enough to cover the premiums which you're doing. And then the other fund which doesn't have any insurance could be the fund where you focus your investments on and the growth of your nested. So it's really common. We often recommend that to maintain insurance for as long as we need it. You just want to make sure the insurance is in line with what you need and review that over time. You might find that you may need a bit less of it as you get older, and so it's not really a set and forget, but I think it's a it's a pretty good strategy for what you're trying to do. Okay, thank you.

SPEAKER_07 11:32

Thank you so much, Tom. Calling through on 1 300 222 774. And our friend Danny from Dalesford is here who joins us as well. Danny. Oh Danny has frozen. Let's try and get Danny here. No. Let's oh no, see, there's something frozen. I have frozen. So Chris, can you take Danny for me? Because I can't. Hey Chris. Hey. Hello, Danny from Dalesford. How are you?

SPEAKER_06 12:08

Yeah, no, Dalesford's frozen with the weather conditions.

SPEAKER_07 12:12

Do you know what was funny, Danny? We had open day yesterday, and um I took questions and somebody said, Oh, does your tech ever freeze? Freeze. Does your tech ever break? And I said, look, actually, very often. And I shouldn't have said that because of course I'm, you know, my little uh thing is just broken. Anyway, but luckily Chris is here to help me. Danny, do you have a question for Marco?

Timing Your Personal Top Ups

SPEAKER_06 12:39

Yeah, I do. Um it's based on what the discussion has been around with the personal contribution. Um I do that every year, and it really is a great Christmas club mid-year when you get that uh much bigger tax return back. So my question is um rather than me putting the cash in throughout the year or at the start of the financial year and it's not in my offset account or whatever, this will apply to a lot of people. Um with this condition. Do I get just as much return for that uh contribution if I put it in at the end of June? Or do I have to figure it out through the year or put it in early in the financial year?

SPEAKER_04 13:18

So I guess there's there's two sides to that question. There's the tax side. So the tax impact is the same, whether you put it in early in a financial year or end of the financial year, because the tax impact doesn't really hit until you do your tax return. And then the second part to that question is really when that money goes in, it gets invested. And so the question is if I put it in early in the year, will the investment gains be worth more than that money having been set in my offset account, reducing a little bit of interest. Now that is impossible to know because we can't forecast the return you're going to get in the next 12 months. So if we put it in early and we have a really good period in markets, it's made a lot of sense because it's been invested and made some good gains. If we put it in early and the market takes a dive and we have a poor 12 months, then it hasn't made you any money, but you've still benefited from the tax deduction. So it's very short-term thinking. Uh I'd be more concerned with the fact that the tax deduction is the valuable bit and the money going in should be invested long term, not just for twelve months. And so think about it as a real long-term boost to your nest egg. I'd be more concerned with making sure your cash flow is okay. So if you can put it in early, I'd do that. If not, nothing wrong with waiting to the end of the year and making sure your cash flow is okay to do it.

SPEAKER_07 14:41

Thank you so much, Danny. And Lucy, are you there? Oh, there you are. That's better. Hello, Lucy. What's your question for Marco?

SPEAKER_03 14:58

Hello, my question for Marco is just about how far back you can go when we were talking about um topping up the personal concessional contributions. Like how many years back can you go? And also do you specify which year you're topping up when you do it, or do you just put in a set amount?

SPEAKER_04 15:13

Great questions. So you can go back five previous years. So not including the current year, you can then go back five previous years, and it will automatically use up the oldest year's space first.

SPEAKER_03 15:27

Okay. So whatever amount you put in, it'll use up the oldest one first.

SPEAKER_04 15:31

It'll do that, yeah, that's right. The tax office will do that automatically for you. Uh but it's five years in total.

SPEAKER_03 15:37

Okay, and then the impact will be on this financial year in terms of it. Correct.

unknown 15:42

All right.

SPEAKER_03 15:42

Okay, thank you. You're welcome.

SPEAKER_07 15:44

Thank you, Lucy. Uh, you're listening to Lisa Leong, it is ABC Radio, and Marco Mulato is here. He is our superannuation specialist. It is 23 past ten. I am rebooting the computer. So I'm talking like this at the moment.

Downsizer Contributions After Selling Home

SPEAKER_07 16:02

And why don't we continue with downsizer contribution. So uh in relation to the things that we might do now, Marco, some people might be thinking about selling their home. Tell us the ins and outs of uh the downsizer contribution and any strategies we might have in relation to it.

SPEAKER_04 16:25

Right. So the downsizer is this lovely way to get money into superannuation and there are almost no rules around it in terms of age, work status, super balance. It simply allows you to, if you're fifty-five years or older, have owned your home or your spouse has owned your home for a period of ten years, and it doesn't have to be currently owned by either by either spouse necessarily at the moment. It doesn't have to be your current home or residence, but it's been your main residence at some point for ten years, and that is sold, you're allowed to then put in up to three hundred thousand dollars each into super. And there aren't many rules around getting that money, and it doesn't count towards any caps. It really doesn't matter what age you are as long as you're over fifty-five, so there's no top age limit. So it allows us to really boost our nest egg from the sale of our main residence. And so that is a really nice way to top up your super balance at a point in time where you've probably got a lot going on in terms of preparing for retirement or retirement and wanting to get this bigger super balance in place so that you can live the retirement you want. Selling the main residence allows you to really pump that up and accelerate it.

SPEAKER_07 17:43

Do you only get one crack at downsizer contribution?

SPEAKER_04 17:45

You get one go only, so it's important to it once. You can only do it once. Uh it's important here to think about the different types of contributions as well. It may not necessarily be that you want to use that downsizer first. You may want to use some other caps first and then save your downsizer. You've got to make some assumptions around what might happen uh over the next several years, but it's worth just thinking through that in terms of scenarios and understanding the order of those contributions.

SPEAKER_07 18:16

All right. And Ash has joined you on 1 300 222 774. Hi, Ash.

SPEAKER_05 18:23

Good morning. Hope you're all well. Yes.

SPEAKER_07 18:26

Well, I'm super well because I rebooted the computer while you were talking and now I can take calls again.

SPEAKER_04 18:31

So I'm being a bit stressed there for a moment, but we're pretty good.

SPEAKER_07 18:36

Okay, Marco.

Selling Assets And Boosting Super

SPEAKER_07 18:37

This is Ash. Ash, what's your question for Marco?

SPEAKER_05 18:41

Yeah, so I've had a property for more than 12 months, and my understanding, an investment property that is, and my understanding is if I sell that investment property, because I've held it more than 12 months, I only pay tax on 50% of the profit when it's expensive. What I was thinking of doing is, well, if I because I'm getting nearer to retirement, if I was to sell the investment property and put the profits into my super, now do I have to put all of it or only half of it into it?

SPEAKER_04 19:12

So you're free to put in however much you want or however little you want. So they're they're essentially uh they're different rules, really. So selling the property and the tax impact is one set of rules. So that's your capital gains tax regime. And you're right, you've held it for more than twelve months, half the gain is tax free, the other half will be accessible income for you. Then the second decision is how much you can put into superannually that's got nothing to do with your capital gain. It's got uh everything to do with what the caps are in superannuation.

SPEAKER_07 19:44

Right.

SPEAKER_04 19:44

Okay, so the most you could get in in one year is three hundred and sixty thousand, which are the individual caps per annum, 120 times three. You can bring three together in the one year and get all that into super. So you might want to spread out, depending on how much uh you receive in proceeds, your contributions over a number of years to get as much into your super fund as possible.

SPEAKER_07 20:09

Beautiful. Thank you, Ash from Mornington Peninsula. We're going to try and crack on with some of these text messages now. Are you ready, um, Marco? Let's do it. Okay. What about a self-employed about to retire with very little super? Can the sale of business proceeds go to super if a trust is involved? Question mark.

SPEAKER_04 20:26

Yes, absolutely. And you should get invite advice on this because it can be a very complex area. They call the small business CGT concession. So depends on what type of business you have, what assets you're selling, how long you've owned the business for, but there are some very significant concessions you could have by selling that business at a profit, contributing that money into super and I really completely reducing uh completely eliminating or reducing your capital gain on that business. So great idea, and you should seek advice.

SPEAKER_07 20:55

Oh, okay, thank you for that. Hello, Lisa. Can you ask Marker to explain the $120,000 per annum contribution or $360,000 in a bring forward rule? Are there any hurdles to consider? That's John from Clayton. Good question.

SPEAKER_04 21:07

Yeah, good question. So few hurdles now. So the age at which you can contribute up to is much higher these days. So you can do these types of contributions right up until your 75th birthday. So we've got a long, long, long way to contribute. 120,000 per annum is if you're going to do that individually per annum. Or you can use the bring forward rule, which allows you to use three of those years in the one year, but of course that'll knock you out for the next two years. So it's not until year four that you get your your fresh crack at the big contribution again. But other than that, there's not many rules around it. You want to get in uh as much as you can. You do need to look at what your balance was pre-30 June. It's got to be under two million. Most people are under that, so they can generally make these large contributions. If you're over two million, then you can't make any of these contributions at all.

SPEAKER_07 22:02

Okay. Uh thanks for that. And this one, can you use the downsizer contribution into super after selling home and then renting Steve?

SPEAKER_04 22:11

Yep, because it's just about the sale of the home. It doesn't really um take into account what you do afterwards about the sale of the main residence. And so as long as you do that and satisfy the conditions, you can make that downsizer.

Unpaid Super Rollovers And Final Questions

SPEAKER_07 22:23

And what's the best way to chase up unpaid super?

SPEAKER_04 22:27

Another question. We did a show on this a while ago, I think. The first place is your employer. Just make sure your employer hasn't accidentally tried to contribute to the wrong fund or anything like that. So I'd go straight to the employer first as a first port of call. And if you're not getting anywhere there, there's avenues like the tax office, the ombudsman. There's a few things you can do.

SPEAKER_07 22:50

Hi Marco, can how can a member of a self-managed super fund move to an industrial super fund? That's from John.

SPEAKER_04 22:56

Uh yeah, so that's probably industry superfund, I think we're talking about there. So that is a rollover. You'll probably need some help. Generally, you'll need to sell the assets to cash, then move that cash into an industry fund via a rollover form, and then you'll need probably an accountant or a tax agent to wind down your super fund to a final set of accounts and close the fund. So that there's a few steps. It can be a bit tricky. I'd make sure you get good help to do that.

SPEAKER_07 23:25

And this one. Hi Lisa and Marco. I contributed $1,000 into my super to gain the government $500. Can I still contact my super for the form to claim that $1,000 as a tax deduction? It's not one or the other, is it?

SPEAKER_04 23:39

Michelle from Hotelberg. It actually is one or the other. So you're either putting $1,000 in not claiming a deduction and you'll get five hundred from the government. Or you're putting $1,000 in claiming a deduction for it, personally, but you won't get your five hundred from the government. So it's one or the other.

Closing

SPEAKER_07 23:58

Well, Marco, now we're going to have to leave it there. We always have text messages and calls that I can't get to. So will you come back again soon? Oh, I will. Thanks, Lisa. Oh, that's good.

SPEAKER_04 24:08

And well done today. That tested you, but you did super well.

SPEAKER_07 24:13

Thank you.