“It’s ok I have insurance cover through my super” is a popular response I get when talking to friends and family about the need for personal insurance cover. It’s true that most of us do in fact have personal insurance cover through our super funds, however have you ever taken a closer look at what you actually have?

Quite often, the default cover provided by industry super funds has absolutely no correlation with your needs and only provides minimal cover. Let’s take a look at Death / TPD and Income Protection a bit closer as these 2 types of insurance covers are the most common types of insurance policies offered by Industry super funds.

Income Protection
With income protection you’ll most likely find the automatic cover may have long waiting periods, up to 90 days (3months), which means claim benefits will not be paid until the end of the waiting period. The question you have to ask yourself is this, “can I sustain my living expenses for 3 months without an income?” If the answer is no then you really have to wonder whether the default cover through super is sufficient. Furthermore benefit periods on default covers are usually 2 years, which means in the event of a successful claim, you’ll only receive benefits for maximum 2 years. After this point the claim benefits will cease, which won’t do much good if you’re suffering from long term injury or illness.

In addition, as the money has to pass through your superannuation account, the benefits are basic in nature to ensure that it meets the strict rules on releasing money from superannuation, particularly when preservation age or retirement requirements have not been met. This may mean that you are unable to work but may not qualify for a claim.

Death and TPD
Depending on your age you may also have default Death and TPD cover. Great! This means your family is covered in the event of your death and or total disablement, right? Well, let’s take a look at the details. For example, if a 28 year old male was to open a new industry super fund, he may be entitled to approximately $150,000 – $290,000 of death and TPD cover. The amount of cover depends on his age and which industry super fund he is with. Even if we took the best case scenario and presume he receives the full $290,000 of default death and TPD cover, it still won’t do much good considering the average Australian Mortgage is now around $450,000. So if you’re the main income earner, how’s your family going to fund the outstanding loan along with the ongoing everyday living costs?

Furthermore it is very common for industry funds to have reducing cover policies. This means that as you age, the level of cover reduces, leaving you with minimal insurance cover when you need it most, which is usually in your later years.

Another important factor to point out is industry super funds do not offer full range of personal insurance cover. Trauma insurance which provides a lump sum payment in the event of serious injury or illness is not offered through your industry super fund. This is especially important to cover any out of pocket medical expenses, which are not covered through Medicare or your private health cover.

Here at JBS we often find new client’s misunderstanding what insurance covers they have through their super funds. It is then our focus to ensure our clients understand what insurance they have through their super fund, whether they are in fact the correct types of insurance they require and determine the correct levels of insurance to implement.

Personal insurance can become very complicated and needs to be looked at in depth. Aside from determining the correct types and levels of insurance cover, there are also other factors to consider such as determining the premium structure on the insurance cover. If you haven’t had a review of your insurance needs or it’s been a while since your last review, we encourage you to get in contact with us for a chat.

Superannuation

The end of the financial year always seems to creep up on us. Understanding what you could do before and after 30 June can provide the icing on the cake for employees, investors and those in small business. When it comes to superannuation, make sure you maximise the tax deduction this year or salary sacrifice the right amount so you get the best possible outcome and don’t end up with tax penalties.

Concessional contributions are most commonly contributions from your employer, however if you receive a bonus or have additional cash flow and your marginal tax rate is more than 15%, salary sacrifice into superannuation can be a strategy to boost your super balance and decrease your tax. To receive the tax benefit in 2016 your fund must receive the contribution prior to 30 June 2016.

The current concessional contributions are:

It is important that you don’t go over your limit.

Claiming a tax deduction for personal superannuation contributions
If you are self-employed, (you earn less than 10% of your income from wages from an employer, fringe benefits and other related payments) you may qualify for a personal tax deduction to superannuation.

If you intend to claim a tax deduction make sure you are eligible to claim a tax deduction – you may want to speak to JBS first to make sure.  You need to notify the fund of the amount you wish to claim as a deduction as soon as possible to ensure you have the relevant acknowledgement form from your super fund before you lodge your tax return.

Salary sacrificed contributions
Foregoing part of your salary in favour of having additional concessional contributions made to super by an employer may deliver tax advantages.

Existing salary sacrifice arrangements should be reviewed on a regular basis, at least annually. Reviewing a salary sacrifice arrangement before the end of the financial year and amending for the following financial year represents good planning and ensures that you do not exceed any caps resulting in additional tax.

Government co-contributions for low income earners
If you earn less than $50,454 a year and make a non-concessional contribution* to superannuation you may be eligible to receive a Government contribution of up to an additional $500. The actual amount, and eligibility for the co-contribution, depends on a number of factors including the proportion of total income derived from employment, taxable income (and lodging a tax return), age and level of contributions.

*Making large non-concessional contributions is a big decision and advice from a financial planner is recommended before any contribution is made. In the recent Budget, a lifetime limit of $500,000 was placed on non-concessional contributions and therefore it is even more important that you seek assistance before making any after-tax contribution to super.

Low Income superannuation contribution
The Government will provide a superannuation contribution of up to $500 equal to 15% of concessional contributions made into superannuation to eliminate tax payable on these funds when deposited into super. If you are earning $37,000 or less and your employer pays superannuation contributions to a complying superannuation fund you may be eligible for this contribution. You do not need to do anything to claim this payment, but rather the ATO will determine your level of contribution and make it directly to your super account once tax returns have been lodged.

Spouse contributions
If your spouse has an income of less than $10,800, you may be entitled to receive a tax offset of up to $540, if you make a non-concessional contribution to their super account. The tax offset reduces if your spouse’s income is between $10,800 and $13,800, when it cuts out. The maximum offset available is 18% of the contribution made, subject to a maximum offset of $540.

Personal and Investment

Claim all work related deductions
The task of compiling all work related deductions can seem all too hard. However, taking the time to understand what work related expenses are potentially deductible can save you considerable cost. Where you do not have the necessary receipts on hand you can still claim up to $300 of work-related expenses provided the claims relate to outgoings you necessarily incurred in your job or business.

Maximise motor vehicle deductions
If you use your car for work-related travel and your kilometres for the year do not exceed 5,000 kms, you can claim a deduction for your car expenses on a cents per kilometre basis. The allowable rate for such claims changes annually. Any such work-related travel claims must be based on reasonable estimates.

If you use your car for significant amounts of work-related travel you may be able to claim a deduction for your total running expenses to the extent you have used it for work. However, such claims are only available where you have the required log book, odometer readings and receipts.

Property deductions
If you have an investment property and some repairs are required, bring forward the works before 30 June. It is important the invoice is paid pre 30 June to be deductible in this financial year.

Improve your tax situation

There are many things to consider when it comes to your taxes. Here, we’ll give you just a few options to consider to improve your tax situation and explain the importance of your getting your taxation documents in order.

Defer or bring forward income for the current financial year
Consider deferring taxable income, until the start of the next financial year. For example, you may want to consider postponing the sale of assets which may incur capital gains tax. However, in some cases it might be advisable to bring forward income to the current financial year, particularly if your projected income in the next financial year is expected to result in you moving into a higher marginal tax bracket.

Pre-pay interest and tax deductible expenses
Pre-paying interest and tax deductible expense may allow the tax deduction to be claimed in the current financial year.

Tax documentation
It’s important that you keep all your tax documents in order. Review receipts, log books and other documentation to ensure that all records required to manage tax affairs are in order. This will help make the end of the financial year process run as smooth as possible.

Review Your Pension Drawings
If you’re drawing an income from an account based pension, also known as an allocated pension, check to ensure that the prescribed minimum level of income has been drawn in the current financial year. Failure to draw the correct minimum level of income may result in unfavourable tax consequences.

Ensure your SMSF is firmly on track

Managing your own superannuation fund gives you the greatest flexibility over exactly how and where your super investments are made. However, it also means that you are solely responsible for complying with super and tax laws. With the end of the financial year looming, now is as good a time as any to make sure your SMSF is on track.

Investment strategy
Each SMSF must have an investment strategy that reflects the high level investment strategy adopted by the trustees of the fund. As part of the investment strategy, trustees are also required to consider insurance for each member of the fund. In addition to formulating and implementing an investment strategy, trustees are also required to regularly review the fund’s investment strategy.

As we approach the end of another financial year, this presents a good opportunity for trustees to review their investment strategy and ensure that it continues to be appropriate for the fund, particularly where members’ circumstances may have changed.

Value assets
It’s a requirement that trustees of a SMSF value their fund’s assets at market value. This does not necessarily involve trustees obtaining formal valuations from a qualified valuer, however valuations must be provided by a person familiar with valuing such assets.

The JBS team are here to help, if you have any questions leading up to the end of financial year please contact us.

The retention of key documents is an important requirement for the trustees of self-managed super funds. In this day and age, technological advances have seen the ATO update their record-keeping requirements to allow for electronic storage.

What do trustees need to know about record-keeping?
The ATO, on its website, emphasises that it is the responsibility of the trustees to maintain records of documents in such a way that they are accurate and easy to access. This includes all tax documents and records of the super fund, especially minutes of all investment decisions ensuring that all trustees have acknowledged the decision and the reasons of the choice of investment are noted. This specifically ensures that any disputes between trustees over failed investments within the fund, should not occur since trustees cannot claim they were not involved.

What are the benefits of storing SMSF records electronically?
The ATO’s decision to allow the electronic storage of documents was primarily as a way to minimise the cost of running an SMSF, since it can potentially reduce the costs of maintaining the collection of records. Additionally, a well organised collection may help reduce the cost of any audits required.

What are the negatives of storing SMSF records electronically?
There is a need to ensure that all documents stored electronically can be easily verified for authenticity and are easily accessible. In particular, unknown authenticity of documents held digitally may result in issues when lodging documents with the ATO. Keeping a copy of key documents without the originals may result in difficult questions regarding whether the original was destroyed for the reason other than to simply reduce paperwork. For this reason trustees should strongly consider whether to keep original copies of important documents. The loss of a trust deed, or the existence of one with questionable accuracy, for example, has potentially major implications in case of disputes between trustees, often requiring court decisions for solutions to be achieved.

For how long do documents need to be kept by trustees?
The ATO specifies the need to maintain various documents for various lengths of time.  Should any of these documents not be available within the time period then a penalty must be paid based on penalty points.

Records required to be held for at least five years:

–  Accounting records with the transactions and financial position of the SMSF (If not held, 10 penalty units must be paid)
–  Annual operating statement and an annual statement of the SMSF’s financial position (10 penalty units)
–  Copies of all SMSF annual returns
–  Copies of other statements required to be lodged with the ATO or provided to other super funds

Records required to be held for at least ten years:

–  Minutes of trustee meetings and decisions (10 penalty units)
–  Changes of trustees (10 penalty units)
–  Trustee declarations acknowledging the obligations and responsibilities for any trustee, or director of a corporate trustee, appointed after 30 June 2007 (10 penalty units)
–  Members’ written consent to be appointed as trustees
–  Copies of all reports given to members (10 penalty units)
–  Documented decisions about storage of collectables and personal-use assets

Ultimately the responsibility of retaining key SMSF records falls onto the trustees.  Should any doubts be predicted to exist over the authenticity of a document then care must be taken if making the decision to store SMSF records electronically.

If you’re receiving full service SMSF administration from JBS, you’ll be happy to note that we do all the recording of documents for you electronically, however we still keep a copy of the original documentation of key documents such as trust deeds, pension documentation and binding death benefit nominations. This allows easy access to documents for members, trustees, auditors, and the ATO. If you are running your own SMSF, make sure you adhere to all document storage requirements or alternatively, contact JBS to discuss how we can help.

Travel or tinned beans?

Which choice would you make? And believe it or not, at this age, with time on your side, getting ahead financially is easier than you think.  If you are one who would choose travel over tinned beans, here’s three simple steps you can take now to set yourself up financially in the future – and skip the beans.

TIP 1: Set Financial Goals
Start with a bucket list, what are all the things you’d like to do throughout your life? Now sort them into timeframes. Pick one core goal per timeframe and each pay slip you receive, allocate money toward that goal. For example:

–    SHORT TERM (1-3 YEAR) GOAL: Go to New York for two weeks. Set up a savings account, contribute some every pay cheque.

–    MID TERM (7-15 YEAR) GOAL: Educate your children. Consider an investment such as an investment property, managed fund or share portfolio, contribute even a small amount from every pay cheque.

–    LONG TERM (20+ YEAR) GOAL: Have the choice to retire at 60. Make sure that your superannuation plan is the right one for you, considering fees, investment options, insurance coverage, and any other benefits. To have the ability to retire early, you might want to consider contributing funds to super above the legally required minimum amount (SG contributions) from your employer.

TIP 2: Pay Off Personal Debt
Paying interest is lost money. For example: If you have $3,500 owing on your credit card, paying 21.5% interest and are only making the minimum repayments of $70 a month – it will take you 90 years and 1 month to pay off and you’ll have racked up $27,050 in interest!  Even by paying a little extra each month, say $150. You’ll repay it in two years 8 months and only accrue $1,074 interest. Earn more, spend less or use savings to get rid of credit card debt ASAP so you can start focusing on your exciting goals ahead.

TIP 3: Choose Super Investing Options Wisely
You can choose how you invest and contribute to your super. Compound interest 101: Say you’re 25 years old and you can access your super when you’re 65 years of age. If you have $1,000 in your fund currently and are earning $65,000 a year, contributing 9.5% of your annual salary, being $6,175.  If you receive 5% returns, you’ll retire on $752, 979. If you receive 6% returns you’ll retire on $965, 941. If you receive 7% returns you’ll retire on approximately $1,250,000. We can’t change the timeframe with super but we can influence our rate of return. Always check what your agreed risk profile is. Whether you’re in a conservative (more cash, less shares, property) or high growth (less cash, more shares, property) investing option, it’s important to understand what assets make up your account and whether they will deliver the growth and income you require to meet your goals. But also remember that with greater potenital for growth is greater potential for loss so adjust your portfolio wisely based on your views.

You also have options to contribute on top of the legal minimum paid by your employer, contributing $1,000 per annum on top of employer contributions could result in as much as a $100,000 difference when you retire.

If you need help setting a spending and savings plan, reducing debt or would like more information around the investment options in your super, please contact our office today.

I started gardening four years ago as a way of relaxing. What started as one small garden bed in the backyard quickly turned into me redesigning the entire front yard! My favourite time of year has to be end of winter through to spring. That is when all the bulbs that are hidden in the various garden beds come to life again and dazzle us with their colour.

In order to prepare for our spring garden we need to start planning now in January. I have learned that with gardening, I am always focussed at least 6 months ahead. Spring bulbs need to be planted in February/March, the exception being Tulips. Tulips need to be placed in the fridge for five weeks and then can be planted in May. It sounds odd, putting bulbs into the fridge before planting, but they need to be chilled in order to flower.

This year we will be shuffling bulbs around, what I refer to as my ‘Bluebell garden’ will be dug up and halved to make room for more Tulips. The Ranunculus and Anemone gardens will be added to as well. The hardest part is limiting myself each year with how many bulbs to purchase! It is very easy to get carried away with ideas about what I want to add, I have to remember that it is very important to look after what is already there, the bulbs need fertilising and fresh compost every year. The same principle can be applied to retirement savings, it is important to look after what is there; because once it is gone it is costly to start again.

It is always sad when the spring flowers start to fade and the garden looks lifeless once again. But, then I remember that summertime means David Austin Roses will bloom, colour will be restored and the next project begins: planting sunflower seeds!

If you have ever changed your name, address or especially in today’s environment where you could change jobs several times throughout your working life, it’s easy to lose track of where you’re super is being paid. Having several super accounts could mean that fees and charges are reducing your overall super investment.

The ATO claims there is around $17 billion owing to account holders and therefore could be holding unclaimed super on your behalf. This happens when Super Funds transfer the balance of small inactive account directly to the ATO. This is still your super and you are able to claim and transfer it to your preferred super fund at any time.

There are two primary ways to find any lost or unclaimed super:

Australian Tax Office

AUSfund (Australia’s unclaimed super fund)

The first thing you should do is go to the Australian Tax Office’s online search tool or by calling 13 28 65.

To do a simple search, you’ll need to provide:

•    Tax file number
•    Full name
•    Date of birth

For a more comprehensive search of all your superannuation, you’ll need to register for a secure login with the ATO.

Beware of companies or individuals trying to make money from you unclaimed funds. If you receive a letter or phone call advising you of unclaimed funds, there is no need to take advantage of their service.

Before making any decisions to close any super accounts speak with the team at JBS as you could be losing access to any insurance in place within the super or other benefits such as access to reduced home loan rates or lower fee structures.

If you would like to know more about unclaimed super please speak to the team at JBS.

For the majority of us leaving our office desks forever is something we can only imagine about as it’s so far away.  For the luckier ones that are much closer to retirement this can be a time of excitement and relaxation.  Spending our days at the golf course or with our community groups, families and friends all day every day sounds like heaven on earth.  The transition from full time work to full time play however may become unbearable.  Here are 5 facts about retirement that you should be looking at before retiring.

1 – One of the first things retirees discover about retirement is that they have too much time on their hands with nothing to do.  Playing a round of golf with mates, or enjoying a drink at the bar will only fill up a certain amount of time in the day and you can’t go doing the same routine day after day.  Couples and singles alike will quickly become very unhappy once they run out of ideas on what to do with their time.  Having ideas in your head on what to do in retirement is one thing; however actually doing them is another.  Some experts are suggesting retirees have a day to day plan on what they want to do and even seek a therapist leading up to retirement.  You will never be as busy as you were pre-retirement so it’s important to map out ongoing hobbies, part time work and social events before embarking on retirement.

2 – Retired husband syndrome – Many couples get very excited about retiring together, travelling the world together and spending intensive time together.  If this is you then consider the fact that you and your other half may have been together for the past 30 years working full time.  Aside from weekends and holidays, you never have to see each other for more than a couple of hours in the morning and night.  Now all of a sudden you see each other 24 / 7 and may even start to discover that you can’t stand being together for a prolong period of time.  Each of you having your own hobbies, goals and friends will ensure you don’t spend intensive time together.

3 – Not having enough money to fund retirement – Once retired you might have the goal to travel, see the world and complete your bucket list, unfortunately you might not have the funds to do so.  Travelling can become very costly.  A single international trip can set you back several thousand dollars if not more.  By the time your second trip comes around you may find that you don’t have enough funds anymore, so eating out may be out of the question and this year you won’t be able to travel overseas to see your grandchildren.  Having a good financial planner early on can prepare you and set realistic goals for your retirement.  This way at least you have a more clear expectation of what you can afford in retirement and prevent any nasty surprises once you’ve retired.

4 – Entitlement to social security – At present, the Australian pension age is age 65, which is subject to rules, regulations and changes in the future.  During retirement some retirees aren’t aware of what social security benefits they’re entitled to.  Even if you are receiving funds from your Superannuation benefits, you may still be entitled to government age pension (subject to income and asset tests).  Having a good financial adviser will ensure you’re kept up to date regarding any social security payments you’re entitled to.

5 – Losing your identity from not being at work – For those of us who are passionate about our profession, this becomes our identity.  Anytime your friends or family think of Engineer, Accountant or Doctor, they think of you.  So it’s no surprise that once you retire you may feel like you’ve lost your identity, which may lead to discontent and even depression.  Without the daily interaction of your work colleagues, your mental and even physical health may start to deteriorate.  Retirees who are not very active tend to decline rather quickly mentally and physically.  Joining up to the local gym, taking up classes and just continuing to meet new people will have a longer lasting affect for you.  After all, we all need something exciting to look forward to in the future.

If you are one of the lucky ones thinking about retirement, make sure you talk to the team at JBS so there are no nasty surprises.

Some people hold multiple superannuation plans as they hold insurance cover. This is usually done to obtain cheaper insurance through an industry or retail fund, or due to health concerns that may affect your ability to take up new insurance.

Although this can be an effective strategy to maintain or even obtain insurance, as with most strategies there are some drawbacks. The two main drawbacks are that some funds will require you to maintain a minimum balance in order to be able to keep the insurance, and some also require ongoing contributions to be made for the cover to be held.

In some cases you will be notified of your insurance being cancelled if you do not meet their criteria, however in some cases you won’t find out until it comes time to claim. In order to help prevent this from occurring, there are a few things you can do:

– Have a read of your super providers insurance Product Disclosure Statement (PDS) to see if you need to keep a minimum balance or if there is a requirement for ongoing contributions, or both

– Speak to your fund and ask for confirmation of the rules for keeping insurance, and ask for it in writing.

– Make sure you leave enough to cover the minimum balance and at least one year’s worth of insurance premiums in the fund.

– Make sure, if you are considering rolling a portion of funds out of the fund, you leave enough funds to maintain this minimum. Be careful of using the ATO rollover form (NAT 74662) as this usually initiates a full rollover and therefore you may accidentally cancel your insurance.

– You may wish to consider letting your employer contributions continue to be paid to the fund holding the insurance, as this will help to ensure the balance remains above the minimum amount and satisfies the ongoing contributions clause, where applicable.

– If you don’t want the bulk of your superannuation funds invested with that super provider, you could do a further partial rollover when the balance is large enough. Be sure to check the super funds rules again to make sure they haven’t changed with regards to the insurance. Also be careful as some funds do charge a withdrawal fee so you need to take this fee into account if you’re rolling over funds on a regular basis.

As always JBS are here to help, so if you’re ever unsure feel free to contact JBS and we can make sure you have the right strategy in place when it comes to holding insurance in super.

Do you hold some of your cash in a term deposit? Maybe you have term deposits in your self-managed super fund? Or do you plan on investing in one in order to earn a higher rate of interest than your standard savings account? Well, recent changes to banking legislation may affect you and how you save your money.

The key difference is that banks will now demand at least a 31 day notice period if you try to withdraw your money early from a term deposit. This means that if you want to quickly access the cash you have locked away, you cannot just pay a fee and lose part of your interest, but will have to wait at least a month as well.

These new requirements were introduced on 1 January 2015 in response to the new “Basel III Liquidity Reforms” which demand higher levels of liquid assets to be held by banks in order to provide protection against short term events that may prove a threat to the bank’s ability to pay its obligations, such as a bank run. The reforms expect banks to hold enough high quality liquid assets (such as cash) to cover total net cash outflows for up to 30 days and, in order to achieve this, the banks have applied these new restrictions on term deposits, ensuring that the money held as term deposits does not count as part of the total net cash outflows.

So what does this change for you?  In most cases this should, hopefully, not cause much concern. If you intend to hold your term deposit for the full term until maturity, this legislation will not cause anything to happen differently. If you believe, however, that you may be relying on accessing the funds in your term deposit before the term deposit matures, then you should consider alternative arrangements such as holding part of your funds in a savings account. While some banks have stated that they would relax this requirement in the case of financial hardship, this would be reliant on their assessment.

If you’re concerned about what this change may mean for your savings plans or your retirement savings then please contact the team at JBS to discuss your personal situation.

Superannuation, it’s a bit of mine field when it comes to knowing how to maximise your super contributions. But don’t worry, we’ll break it down for you:

Maximise concessional superannuation contributions

Concessional superannuation contributions for the 2014/15 financial year are limited to $30,000. However, if you were aged 49 or older on 1 July 2014, a transitional limit of $35,000 applies giving you the opportunity to maximise your concessional contributions before the end of the current financial year.

Claiming a tax deduction for personal superannuation contributions

If you’re intending to claim a tax deduction for personal superannuation contributions, a “Notice of Intention to Claim a Tax Deduction” (s.290-170 Notice) must be lodged with your superannuation fund before any one of the following events occurs, whichever is first:

–    lodgement of the income tax return for the financial year in which the tax deduction is being claimed
–    commencing a pension
–    withdrawing superannuation benefits
–    rolling over your superannuation to another superannuation fund

Maximise non-concessional contributions

Non-concessional contributions are personal contributions made from after-tax income. For the 2014/15 financial year, non-concessional contributions are limited to a maximum of $180,000. If aged 64 or under on 1 July 2014, you’re able to bring forward up to three years’ worth of contributions (up to $540,000) provided you haven’t done this previously.

Making large non-concessional contributions is a big decision and advice from a financial planner is recommended before any contribution is made.

Salary sacrificed contributions

Foregoing part of your salary in favour of having additional concessional contributions made to super by an employer may deliver tax advantages.

Existing salary sacrifice arrangements should be reviewed on a regular basis, at least annually. Reviewing a salary sacrifice arrangement before the end of the financial year and amending for the following financial year represents good planning.

Your superannuation contributions at 65

If you’re aged 65-74, your superannuation fund is only able to accept contributions if you have been gainfully employed or self-employed for a minimum period of 40 hours, worked  over not more than 30 consecutive days, in the financial year in which the contribution is being made.

If you’re approaching 65 and not working, consider making superannuation contributions before your 65th birthday.

Government co-contributions for low income earners

If you earn less than $49,488 a year and make a non-concessional contribution to superannuation you may be eligible to receive a Government contribution of up to an additional $500. The actual amount, and eligibility for the co-contribution, depends on a number of factors including the proportion of total income derived from employment, age and taxable income.

Spouse contributions

Where you make a non-concessional contribution to superannuation for your spouse, you may be entitled to receive a tax offset of up to $540 if your spouse has an income of less than $10,800. The tax offset reduces if your spouse’s income is between $10,800 and $13,800. You will not receive a tax offset if your spouse’s income exceeds $13,800. The maximum offset available is 18% of the contribution made, subject to a maximum offset of $540.

Spouse contribution splitting

Superannuation laws allow for a person to split their concessional contributions with an eligible spouse to build up retirement savings for the other. Up to 85% of concessional contributions made in the 2013/14 financial year may be split with a spouse prior to 1 July 2015. Splitting superannuation contributions allows for couples to balance their superannuation savings between partners.

Life insurance held in super

On 1 July 2014, restrictions came into effect in relation to the types of insurance held through superannuation.

The new restrictions affect insurance policies that provide for the payment for an insured event that is aligned to a superannuation condition of release. In essence, the only new policies that can be taken out through superannuation after 1 July 2014 are those covering the following events:

–    death
–    terminal illness
–    total and permanent incapacity – any occupation
–    temporary incapacity

The new restrictions mean that you will no longer be able to take out a policy with your superannuation fund that covers trauma insurance, total and permanent disablement – any occupation and income protection insurance that provides ancillary (such as rehabilitation) benefits in addition to income replacement. Policies taken out prior to 1 July 2014 will not be affected by these new restrictions.