New changes to SMSFs: What you need to know about your super contributions


Published March 2017 by Sharon Hope CPA, SMSF Auditor Online

Sanctioned changes to the superannuation system will start from 1st July 2017. In this article, we’ll touch on what you need to be aware of regarding changes to contributions to your super for the 2017-2018 financial year. Plus, we’ll provide relevant links to the ATO website for you to access the official information. 

Changes to the spouse tax offset   


To help more Australian couples support each other in saving for their retirement, the spouse tax offset is set to change. The low-earning spouse’s income threshold will increase from an assessable income of $13,800 to $40,000, dramatically increasing the number of couples eligible to take advantage of this offset. The high-earning partner is able to make a contribution into their low-earning spouse’s eligible super fund, with the current 18% tax offset up to $540. In dollar amounts, if the high-earning spouse paid $3000 into their spouse’s fund, the 18% tax is not charged, i.e. $540 is 18% of a $3000 contribution. If you contribute more than $3000, then you will start to pay tax at 18% on whatever amount is over the $3000.

Changes to personal super contributions tax deductions

To help more Aussies take advantage of their concessional contributions cap, and enhance the overall flexibility of the superannuation system, there is a change to one of the conditions of the personal contributions tax deduction claim, which will come into effect from 1st July 2017. In short, the rule—that only SMSF members with less than 10% of their income earned through salary and wages could receive the tax deduction for personal contributions—has been removed. More people will now be able to access the tax deduction for contributions, not just the self-employed.

Changes to the low income super tax offset

As of 1st July 2017, a new Low Income Superannuation Tax Offset (LISTO) will supersede the Low Income Superannuation Contribution. Simply put, here’s how the LISTO will work. If you contribute $1000 into your superannuation fund, the tax on that amount will be $150 (15% tax rate) and the government will give you back that $150, up to a limit of $500 dollars back.
If your income is low, i.e. under $37,000pa, and you make your own super fund contribution (or your employer makes a contribution to your fund) of $4000, as an example, you will be taxed $600, but you’ll get the first $500 back, and therefore only pay $100 tax on your $4000 contribution. Or, think of it this way: if you contribute $3333, your superfund will not be out of pocket to pay tax. Company policies – Are there company policies that are particularly important to your business? Perhaps your unlimited paternity/maternity leave policy has endeared you to employees across the company. This is a good place to talk about that. Executive profiles – A company is only as strong as its executive leadership. This is a good place to show off who’s occupying the corner offices. Write a nice bio about each executive that includes what they do, how long they’ve been at it, and what got them to where they are.