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New Superannuation Thresholds From 1 July 2014

Article By Adam Hurwood | | Financial Planning

The ATO has recently released the latest Superannuation Thresholds which will apply for the 2014/15 financial year, starting from 1 July 2014.

Concessional (Tax Deductible) Contributions

From 1 July 2014 the following annual thresholds will apply:

  • The concessional contributions cap will stay at $35,000 for those aged at least 59 on 30 June 2014.
  • For those aged at least 49 on 30 June 2014, the concessional cap will increase from $25,000 to $35,000.
  • The concessional cap for those under age 50 will increase from $25,000 to $30,000.

Non-Concessional Contributions

From 1 July 2014 the following annual thresholds will apply:

  • The non-concessional contributions cap will increase from $150,000 to $180,000. This is usually calculated as 6 times the general concessional cap (6 x $30,000).
  • By utilising the ‘bring forward rule’, whereby you are able to contribute up to three times the annual non-concessional cap in any one financial year (3 x $150,000) provided you make no contributions in the following two financial years, those aged under 65 who are eligible will be able to contribute up to $540,000 in the 2014/2015 year.

Superannuation Guarantee Charge (SGC)

  • Commencing on 1 July 2013, the SGC rate was 9.25% for the 2013/2014 financial year. The rate was scheduled to increase by 0.25% to 9.50% from 1 July 2014 however pending legislation could see the rate staying at 9.25% for 2014/2015 and 2015/16.
  • Starting from 1 July 2014, the maximum annual salary where SGC is required to be paid will increase to $197,680, up from $192,160.

Government Co-Contribution

If you are a low or middle-income earner and make non-concessional contributions to your superannuation fund, the government will pay a maximum matching contribution of $500 to your fund.

From 1 July 2014 the following thresholds will apply:

  • In order to be eligible for the full $500 co-contribution in 2014/2015, your income must be less than $34,488 (increased from $33,516 in 2013/2014).
  • To receive a partial co-contribution payment in 2014/2015, your income must be less than $49,488 (increased from $48,516 in 2013/2014).

Superannuation Lump Sum Withdrawals

Superannuation lump sums are tax free for those aged over 60. If aged between 55 and 59, you have a lifetime low rate cap which allows you to draw a lump sum from your superannuation tax-free up to a certain amount, with the remainder being taxable.

From 1 July 2014 the following thresholds will apply:

  • The low rate cap will increase from $180,000 to $185,000.
  • The higher untaxed plan cap will increase from $1,315,000 to $1,355,000.

For more information on 2014/2015 changes to Superannuation and how they impact on your circumstances, please contact your Altitude Adviser.

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