Your Super Cap Recap

TL;DR

The concessional contributions cap has decreased to $25,000 per individual, and now allows employees to claim deductions for personal contributions, bringing tax benefits.

Transcript

g'day and welcome to this week's video my name's robert goudie and this week we're just gonna have a quick look and a a quick review of the concessional contributions cap now a lot of this is not new news but as we approach the end of the financial year I think it'll be worthwhile just going back over this cuz there are a few important changes that... Read More

Key Insights

• 👲 The concessional contributions cap is now $25,000 per individual, inclusive of employer contributions.
• 🚕 Employees can now claim deductions for personal contributions made to their superannuation fund, providing tax benefits.
• 🤳 Self-employed individuals could previously make lump sum contributions, while employees had limited options.
• 🛄 The recent change has created a level playing field, allowing all individuals aged 75 or under to claim deductions for personal contributions to their superannuation fund.
• 🦸 Completing necessary paperwork and seeking advice from a super fund or financial advisor is crucial when making catch-up contributions.
• 🍝 This change benefits individuals who were not able to make lump sum contributions in the past.
• 🛄 Understanding the work test is important for individuals aged 65 to 75 who want to claim deductions for personal contributions.

Questions & Answers

Q: What is the concessional contributions cap?

The concessional contributions cap refers to the maximum amount individuals can contribute to their superannuation fund with tax benefits. It has recently been reduced to $25,000 per person.

Q: Can employees now claim deductions for personal contributions?

Yes, starting from July 2017, employees aged 75 or under can claim deductions for personal contributions made to their superannuation fund. However, those aged 65 to 75 need to meet the work test.

Q: How were concessional contributions made in the past?

Previously, employees could only increase their concessional contributions through salary sacrifice arrangements, where a portion of their income is directed into their superannuation fund. Self-employed individuals had the option to make lump sum contributions.

Q: How has the recent change made the system fairer?

The recent change in legislation has made the system fairer by allowing all employees, regardless of their employment status, to make lump sum concessional contributions and claim deductions.

Summary & Key Takeaways

• The concessional contributions cap has been reduced to $25,000 per individual, including employer contributions via superannuation guarantee payments.

• Previously, only self-employed individuals or those earning 10% or less of their income as employees could make lump sum concessional contributions.

• From July 2017, anyone aged 75 or under can claim deductions for personal contributions, but those aged 65 to 75 need to meet the work test.