With the end of the financial year just days away, here are five last minute super actions to take. But you will need to act quickly because contributions should be receipted and banked by your super fund or SMSF before the close of business on Monday.

1. Concessional contributions

Can you make additional concessional contributions to super?

Concessional contributions include your employer’s 9.5%, salary sacrifice contributions and any amount you claim as a personal tax deduction. (You no longer need to be self-employed to claim the tax deduction). Your concessional contributions cannot exceed $25,000 in aggregate.

The normal age rules apply. Up to age 67, anyone can make a contribution. If you are between 67 and 74 years, you must pass the ‘work test’, which is defined as working 40 hours over any period of 30 consecutive days. If you are 75 or over, only mandated employer contributions (the compulsory 9.5%) can be made.

Here is an example. Tom is 45 and earning a gross salary of $100,000. His employer contributes $9,500 to his super, and he has elected to salary sacrifice a further $5,000. Potentially, prior to 30 June, Tom can contribute a further $10,500 to super and claim this amount as a tax deduction, which he does when he completes his 20/21 tax return. He will also need to notify his super fund and complete a ‘Notice of intent to claim a tax deduction for a personal super contribution’.

Provided Tom has the cash flow and the taxable income to support the deduction, he can save tax. The downside is that once monies are in the super system, they can’t be accessed until at least age 60 and in many cases, when aged 65.

2. Catch-up concessional contributions

Is your super balance under $500,000 and can you make ‘catch-up’ concessional contributions?

Introduced a few years’ back as a measure to help persons with low super balances, the unused part of the annual concessional contributions cap can be carried forward for up to 5 years. Effectively, you can make a ‘catch-up’ contribution, and claim a tax deduction for doing this.

The main caveat is that your super balance must be less than $500,000 at the start of the year in which you make the ‘catch-up’ contribution. Also, the measure only commenced from the 2018/19 financial year, so this financial year, you can only make ‘catch-up’ contributions with regard to the 2018/19 and 2019/20 years.

Here is an example. Suppose Fiona has concessional contributions of $11,000 in 18/19 and $1,000 in 19/20. Her super balance at 30/6/20 was $250,000. Potentially, she could make ‘catch-up’ contributions of $38,000 in 20/21 - $14,000 for 18/19 and $24,000 for 19/20.

This would make sense if she had the cash flow (for example, she might have received a bonus or an inheritance) and the taxable income to support the deduction. In regard to the latter, her taxable income (after the deduction for the ‘catch-up’ contribution) should be at least $45,000, otherwise it becomes a very marginal exercise.

If Fiona doesn’t make the ‘catch-up’ this financial year, the opportunity is not lost as she will have another three years to do so. However, if her super balance goes over $500,000 during that period, she risks being ineligible. Ideally, to drive the maximum tax saving, she should make the ‘catch-up’ contribution when her taxable income is the highest.

3. Non-concessional contributions

Can you make additional personal (after tax) contributions?

The cap on non-concessional contributions is $100,0000. Up to age 67, anyone can make a non-concessional contribution provided that their total superannuation balance on 30 June 2020 was less than $1,600,000. If you are between 67 and 74 years, you must also pass the ‘work test’.

You may also be able access the ‘bring forward rule’, which allows up to 3 years’ worth of contributions in one year. Potentially, you could contribute $300,000 into super in one hit or a couple $600,000. The age limit for this is different - you must have been aged 64 years or less on 1 July 20 and not have accessed it in the preceding two years.

Super balances are measured each June 30 (i.e. your balance on 30 June 20 determines whether you can make non-concessional contributions in 2020/21) and include all amounts in accumulation and pension. If your total super balance was between $1,400,000 and $1,500,000 then the maximum amount you can access under the bring-forward rule is $200,000, and if your balance is between $1,500,000 and $1,6000,000, you are limited to $100,000. Above $1,600,000, you cannot make non-concessional contributions.

4. Government Co-Contribution

Can you access, or can a family member access the Government Co-Contribution? If eligible, the Government will contribute up to $500 if a personal super contribution of $1,000 is made.

The Government matches a personal contribution on a 50% basis. This means that for each dollar of personal contribution, the Government makes a co-contribution of $0.50, up to an overall maximum of $500.

To be eligible, there are 3 tests. The person’s total income must be under $39.837 (it starts to phase out from this level, cutting out completely at $54,837), they must be under 71 at the end of the year, and critically, at least 10% of this income must be earned from an employment source.

While you may not qualify for the co-contribution, this can be a great way to boost a spouse’s super or even an adult child. For example, if your kids are university students and doing some part time work, you could potentially make a personal contribution of $1,000 on their behalf – and the Government will chip in $500!

5. Tax offset for spousal contributions

Can you claim a tax offset for super contributions on behalf of your spouse? If you have a spouse who earns less than $37,000 and you make a spouse super contribution of $3,000, you can claim a personal tax offset of 18% of the contribution, up to a maximum of $540. The offset acts like a tax rebate – a $ for $ saving in tax paid.

The tax offset phases out when your spouse earns $40,000 or more. Your spouse’s income includes their assessable income, reportable fringe benefits and any (though unlikely) reportable employer super contributions. One additional eligibility test – your spouse’s total super balance on 30 June 2020 must have been less than $1,600,000.

Don’t leave it to the last minute

Super contributions must be receipted and banked by your SMSF or super fund on or before 30 June. If paying by BPay, electronic funds transfer or even cheque, please allow sufficient processing time.