With the end of the financial year fast approaching, now is a great time to review and optimise your superannuation savings. Implementing effective strategies before 30 June can help you boost your super balance and potentially save on taxes. In this article, we present six superannuation strategies that you should consider before the end of this financial year.

Use the carry forward concessional contribution rules

Take advantage of the carry forward concessional contribution (CC) rules to make additional contributions to your superannuation. These rules allow you to carry forward any unused CC cap amounts from the past five financial years and utilise them to make CCs in excess of the general annual CC cap. Ensure that your total superannuation balance (TSB) at 30 June 2023 was below $500,000 to be eligible for this strategy.

Make a personal deductible contribution

Consider making a personal deductible contribution to your superannuation account. This allows you to boost your super balance and potentially claim a tax deduction. Ensure that you meet the eligibility criteria, including making the contribution to a complying superannuation fund, being at least 18 years old (unless you derive income from business or employment-related activities), and notifying your superannuation fund trustee in writing of your intention to claim the deduction.

The notice must be given by the earlier of:

• When you lodge your income tax return for the year the contributions were made, or the end of the financial year following the year the contributions were made.
• The trustee of your superannuation fund must acknowledge receipt of the notice, and you cannot deduct more than the amount stated in the notice.

Spouse contribution splitting

If your spouse is under preservation age or aged between their preservation age and 65 years and not retired, you can split up to 85% of your 2022/23 CCs to their superannuation account. This strategy helps build superannuation for your spouse, equalises balances, and maximises tax-free retirement phase income streams.

Superannuation spouse tax offset

If your spouse has a low income or is not working, consider making a non-concessional contribution (NCC) to their superannuation account. This strategy not only boosts your spouse’s super balance but also allows you to qualify for a tax offset of up to $540. Ensure you meet the income and contribution requirements to benefit from this strategy.

You may be able to get the full offset if you contribute $3,000 and your spouse earns $37,000 or less pa (including their assessable income, reportable fringe benefits and reportable employer superannuation contributions).

A lower tax offset may be available if you contribute less than $3,000, or your spouse earns between $37,000 and $40,000 pa.

Maximise non-concessional contributions

Utilise the non-concessional contribution (NCC) cap to make after-tax contributions to your superannuation. By contributing from your after-tax income or savings, you can take advantage of the low tax rate on superannuation investment earnings, potentially saving on taxes.

The general NCC cap for 2023/24 is $110,000 and eligibility to utilise the cap depends on your TSB.

Although NCCs don’t reduce your taxable income for the year, you can still benefit from the low tax rate of up to 15% that is paid on superannuation on investment earnings. This tax rate may be lower than what you might pay if you held the money in other investments outside superannuation.

Receive the government co-contribution

If you are a low or middle-income earner, consider making a non-concessional contribution to your superannuation account before 1 July 2024. By doing so, you may be eligible for the government co-contribution, where the government contributes up to $500 into your superannuation account. Ensure you meet the income and contribution requirements to benefit from this government initiative.

Conclusion

As the end of the financial year approaches, it’s crucial to consider these six superannuation strategies to optimise your savings and potentially reduce your tax liabilities. However, keep in mind that eligibility criteria and contribution limits apply to each strategy. To determine the most suitable strategies for your individual circumstances, it is advisable to consult with a financial advisor or superannuation expert before 30 June.