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2020 – End of Financial Year Checklist – Superannuation

Concessional Contributions Cap

The concessional contributions cap for the 2020 financial year is $25,000. Concessional contributions can include the following:

  • Employer superannuation guarantee – compulsory contributions made by the employer at 9.5% of ordinary time earnings.
  • Award contributions – specified in employment awards or agreements.
  • Salary-sacrifice contributions – paid from your pre-tax income to your super fund.
  • Personal contributions – claimed as a tax deduction in your personal tax return.

Please ensure contributions are paid by no later than 25 June. This will allow sufficient time for processing. The contribution will only be accounted for once it has been received by the employees’ super fund.

If you exceed the concessional cap, the excess is included as assessable income in your personal tax return. Tax will be paid at your marginal rate less the 15% tax that has already been paid in the super fund. You have the ability to release the excess amount from the super fund to pay the additional tax. Please speak to your tax accountant to discuss your options.

Unused Concessional Contributions Cap

From 1 July 2018 if your total superannuation balance is less than $500,000 on 30 June from the previous financial year. You have the option of contributing above the $25,000 cap if you have an unused portion from the previous 5 years.

Description 2017-18 2018-19 2019-20 2020-21 2021-22
General contributions cap $25,000.00 $25,000.00 $25,000.00 $25,000.00 $25,000.00
Total usused available
cap accrued
Not applicable $0.00 $22,000.00 $44,000.00 $69,000.00
Maximum cap available $25,000.00 $25,000.00 $47,000.00 $25,000.00 $94,000.00
Superannuation balance
30 June prior year
Not applicable $480,000.00 $490,000.00 $505,000.00 $49,000.00
Concessional contributions $0.00 $3,000.00 $3,000.00 $0.00 $0.00
Unused concessional
cap amount accrued inthe relevant financial year
$0.00 $22,000.00 $22,000.00 $25,000.00 $25,000.00
https://www.ato.gov.au/Rates/Key-superannuation-rates-and-thresholds/?anchor=Concessionalcontributionscap#Concessionalcontributionscap

Concessional contributions can only be made on behalf of an individual in the following circumstances:

  • Aged less than 65 years.
  • Satisfy the work test if they are aged between 65 to 74 years. The work test requires the individual to be gainfully employed for a period of 40 hours within 30 consecutive days in the financial year before a contribution can be made.
  • Have sufficient taxable income if the individual intends to claim the concessional contribution as a deduction in their tax return.

Superannuation Guarantee Amnesty

A one-off opportunity to correct past unpaid superannuation guarantee (SG) amounts. Employers have access to a six-month window, until 7 September 2020, to disclose, lodge, and pay unpaid SG amounts for their employees. Employers are able to claim deductions for the amounts paid, and not incur administration charges or penalties during this period.

Pensions

If you receive a pension from a superannuation fund, please ensure that you have withdrawn the minimum pension prior to 30 June. The minimum pension is calculated by multiplying the pension account balance by a percentage factor.

Age 2013-14 onwards Reduced rates by 50% for the
2019-20 and 2020-21 income years
Under 65 4.00% 2.00%
65-74 5.00% 2.50%
75-79 6.00% 3.00%
80-84 7.00% 3.50%
85-89 9.00% 4.50%
90-94 11.00% 5.50%
95 or more 14.00% 7.00%
https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/SMSF-resources/SMSF-technical/Pension-standards-for-self-managed-super-funds/