30 October 2009
Beware! - Concessional Contributions Caps Have Reduced
- Will you go over the limits?
From 1 July 2009 the annual limit on concessional super contributions reduced. Concessional contributions include your employer Super Guarantee (SG) contributions, salary sacrifice contributions and any personal (deductible) contributions (where applicable).
The reduction could have serious tax implications for anyone breaching the limits, for example by salary sacrificing too much in 2009/10.
Amounts that exceed the limits will be taxed at the highest marginal tax rate (currently 46.5%), instead of the ordinary 15% concessional tax rate.
The annual limits are:
• $25,000 - for individuals under age 50; or
• $50,000 - for individuals age 50 and over. (until June 2012)
Remember, the annual limit refers to the contributions actually paid into your super account from 1 July 2009 to 30 June 2010. So, it’s worth checking your account to see if any contributions due in the last quarter or month of the 2008/09 financial year were received in the 2009/10 year.
You can check your account online via the Member Login area on the homepage.
New to online account access? Call Westscheme on 9278 7070 for your security PIN to allow access.
Personal Contributions
Any contributions in excess of the concessional limit will count toward your annual non-concessional contributions cap. Non-concessional contributions are also known as the voluntary personal contributions from your after-tax income.
In the 2009-10 financial year the annual limit on non-concessional contributions limit is $150,000 per person. If your non-concessional contributions exceed this limit, any excess contributions will again be taxed at 46.5% - in addition to the tax already paid on this money.
Members are encouraged to review any salary sacrifice arrangement they may have to avoid breaching the annual caps.
The financial decisions you make can be complex, Westscheme recommends you seek professional financial advice before making any changes to your super.
Click here to read a statement from the ATO regarding the changes to concessional contribution caps.
Industry Funds Financial Planning
Westscheme members can obtain limited personal advice regarding Westscheme Superannuation through Industry Fund Financial Planning (IFFP) at no additional cost. If you wish to do this, please contact Albert Lim on 08 9218 4038 or 1800 198 503. If you are seeking more comprehensive advice, please call IFFP on 08 9463 3930 or 1300 138 848 to arrange an appointment.
IFFP charges for personal appointments and comprehensive personal advice on a fee for service basis. They do not accept up front or ongoing commissions.