Superannuation – An Overview

Salary Sacrifice Contributions

Non-Concessional Contributions

Superannuation Guarantee Contributions

Reasonable Benefit Limits (RBL’s)

Superannuation Co-Contribution

A superannuation fund is a tax effective vehicle established to provide benefits to members on retirement or death benefits to dependants on the death of a member. The funds invested within superannuation are generally required to be preserved until the member retires after reaching a minimum age, or dies.

Contributions Tax

Deductible personal contributions and employer contributions can be subject to a contributions tax. If the contributions tax applies, it is levied at a rate of 15% on the taxable contribution.

Superannuation Surcharge

The Superannuation Surcharge was abolished from the 2005/2006 financial year and no longer applies.

Salary Sacrifice Contributions

Under a salary sacrifice arrangement, you forgo a portion of your cash income in return for additional contributions to your superannuation fund, funded with pre tax dollars.

This allows you to increase your superannuation assets in a highly tax effective manner. On the top marginal tax rate this can mean the difference between investing up to 85% of your salary (after contributions tax) compared to 53.5% if investing your after tax salary 46.5% marginal tax rate including Medicare).

A salary sacrifice arrangement must be 'prospective' in nature, only sacrificing future income or bonus.

Non-Concessional Contributions

Non-Concessional Contributions into superannuation are contributions made from after-tax dollars for which no tax deduction is claimed.

Superannuation Guarantee Contributions

The employer compulsory contribution (Superannuation Guarantee Contribution), or SGC is 9% per annum. These contributions are subject to contributions tax of 15%.

Preservation Age

Superannuation is not released until your preservation age, which is listed below.

Date of Birth	Preservation Age
Before 1 July 1960	55
1 July 1960 – 30 June 1961	56
1 July 1961 – 30 June 1962	57
1 July 1962 – 30 June 1963	58
1 July 1963 – 30 June 1964	59
After 30 June 1964	60

Reasonable Benefit Limits (RBL’s)

Reasonable Benefit Limits (RBL’s) limit the amount of superannuation (and associated) benefits you may receive in your lifetime on a concessionally taxed basis. RBL's were abolished from 1st July 2007 and no longer apply.

Superannuation Co-Contribution

The Superannuation Co-Contribution is a helping hand from the Australian Government to assist eligible individuals to save for their retirement. If you are eligible and make personal superannuation contributions, the Government will match your contribution with a Super Co-Contribution up to certain limits. For further details, please contact us.

Contribution Limits

From 1st July 2009, the Federal Government reduced the limits for superannuation contributions. From this date, Concessional Contributions are capped at $25,000. There is a transitional arrangement for people aged 50 or over that allows those people to contribute up to $50,000 per year for each of the 2009/10, 2010/11 and 2011/12 financial years. The Non-Concessional Contributions Limit is $150,000 per year, however you may be able to make non-concessional contributions of up to 3 times the cap over a three year period. This is known as the "bring Forward" option.