SUPERANNUATION
Reasonable Benefits Limits
| Standard RBLs | 2005/2006 | 2004/2005 |
| Lump Sum | $648,946 | $619,223 |
| Pension | $1,297,886 | $1,238,440 |
Superannuation Guarantee levels
Employer contributions are generally paid on notional earnings
base:
| 00/01 | 01/02 | 02/03 onwards |
| 8% | 8% | 9% |
When are payments required?
Quarterly payments due:
28th October 2005
28th January 2006
28th April 2006
28th July 2006
What is the minimum age requiring SG payment?
18 years. SG payments are not required for part - time employees (working less than 30 hours a week) under this age.
What is the maximum age for SG payment?
From 1 July 2004 members aged 70 to 74 can make
contributions to superannuation under an industrial award
and personal contributions can be made by a member who has
worked at least 40 hours in a period of not more than 30 consecutive
working days in the financial year.
A member aged 75 or over can only make the contributions and
the superfund can only accept the contribution under an industrial
award.
What is the maximum salary requiring SG payments?
Maximum salary taken into account to calculate the SG Charge for 2005/06 is $33,720 per quarter ($134,880 pa).
What is the minimum salary requiring SG payments?
$450 per month.
| Maximum Deductible Contributions (MDC) | ||
| Age of Member | 2005/06 | 2004/05 |
| Under 35 | $14,603 | $13,934 |
| 35 - 49 | $40,560 | $38,702 |
| 50 and over | $100,587 | $95,980 |
| Gross personal Contributions (Self Employed Persons)* | ||
| Age of Member | 2005/06 | 2004/05 |
| Under 35 | $17,804 | $16,912 |
| 35 - 49 | $52,414 | $49,936 |
| 50 and over | $132,450 | $126,306 |
Tax deductions for self-employed persons*
Deductions equal to the lesser of:
- $5,000
+ 75% of the amount of contributions exceeding $5,000 and
- the maximum deductible age based limit (see above).
* or persons entitled to little or no employer super support.
Superannuation Spouse Contributions Tax Offset
The tax offset applies to contributions made by a taxpayer to a complying superannuation fund in respect of their low income or non-working spouse.
| Spouse's Assessable Income | Maximum Rebatable Contributions (MRC) | Maximum Offset Amount |
| 0 - $10,800 | $3,000 | $540 |
| $10,801 - $13,799 | $3000 - [AI-$10,800] | MRC x 18% |
| $13,800+ | Nil | Nil |
Super Co-contribution
If you earn less than $58,000 a year, make personal super contributions and are otherwise eligible, the Government will pay you the Super Co-contribution. It means that if your total income for tax purposes is $28,000 or less a year, the Government will now put in one dollar and fifty cents for every dollar you put into your super, up to a maximum Super Co-contribution of $1,500 a year.
| If your personal super contribution is: | ||||
| $1,000 | $800 | $500 | $200 | |
| And your income is: | Your Super Co-contribution will be: | |||
| $28,000 or less | $1,500 | $1,200 | $750 | $300 |
| $30,000 | $1,400 | $1,200 | $750 | $300 |
| $32,000 | $1,300 | $1,200 | $750 | $300 |
| $34,000 | $1,200 | $1,200 | $750 | $300 |
| $36,000 | $1,100 | $1,100 | $750 | $300 |
| $38,000 | $1,000 | $1,000 | $750 | $300 |
| $40,000 | $900 | $900 | $750 | $300 |
| $42,000 | $800 | $800 | $750 | $300 |
| $44,000 | $700 | $700 | $700 | $300 |
| $46,000 | $600 | $600 | $600 | $300 |
| $48,000 | $500 | $500 | $500 | $300 |
| $50,000 | $400 | $400 | $400 | $300 |
| $52,000 | $300 | $300 | $300 | $300 |
| $54,000 | $200 | $200 | $200 | $200 |
| $56,000 | $100 | $100 | $100 | $100 |
| $58,000 | $0 | $0 | $0 | $0 |
Redundancy Payment limits
The tax-free portion (which cannot be rolled over) of the
redundancy payment is calculated as follows:
| 2005/2006 | 2004/2005 |
| $6,491 plus $3,246 for every year of service |
$6,194 plus $3,097 for every year of service |
Generally, the amount in excess of the tax-free component is treated as an employer-financed ETP and can be rolled over. The components are split between the pre and post 1983 components according to the eligible service period.
Surcharge Rate calculation & threshold
| What is the surcharge rate? | |
| 2004/2005 | |
| (ATI - $99,710) / $1,709 | |
The maximum is 12.5% where ATI exceeds $121,075
(2004/2005) and $109,924.
Abolition of superannuation surcharge from 1st July 2005 -
the surcharge that is currently payable on an individual's
surchargeable contributions and termination payments will
be abolished from 1 July 2005. This basically means that the
surcharge will no longer apply in respect of superannuation
benefits that accrue, contributions made, or termination payments
received, from this date.
Adjusted taxable income (ATI)
Adjusted taxable income is equal to:
Taxable income
Plus Post 20 August 1996 component of employer ETP rolled
over
Less ETPs cashed out from a super fund, ADF or RSA in the
financial year
Less long service leave and annual leave amounts from a bona
fide redundancy, early retirement scheme, or invalidity.
Plus surchargeable contributions
Plus reportable fringe benefits
Surchargeable contributions
Surchargeable contributions are defined as the sum of:
Employer superannuation contributions*
Personal contributions for which the person is allowed a tax
deduction;
Untaxed post June 1983 component of an employer termination
payment (eg. "golden handshake", or the non-exempt
part of a redundancy) accrued after August 20, 1996.
*Plus SG shortfall and certain payments from the ATO relating
to small balances
| Tax on super components 2005/2006 | ||
| ETP component | Tax rate on payment | Counted towards the RBL |
| Undeducted | Nil | No |
| Post 30 June 1983 untaxed | A (see below) | Yes |
| Post 30 June 1983 taxed | B (see below) | Yes |
| Concessional | 5% | No |
| Pre 30 June 1983 | 5% | Yes |
| Invalidity component | Nil | No |
| Capital Gains Tax exempt | Nil | Yes |
| Excess Benefits | Highest marginal | N/A |
| |
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| A (UNTAXED) | B (TAXED) | |
| Under age 55 | 30%* | 20%* |
| Age 55 and over - under $129,751 - over $129,751 |
15% 30%** |
Nil 15%** |
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