Who can Contribute?
Who can contribute to superannuation?
If you are:
- less than 65 years old
- 65 to 74 and have worked at least 40 hours in a period of not more than 30 days in that financial year.
You can also make contributions on behalf of your spouse until they are age 70 if your spouse is not working or earns less than a small income.
If you are employed, your employer should be contributing some money into superannuation on your behalf. These compulsory contributions are called Superannuation Guarantee Contributions (SG). The SG is a percentage of your gross (before tax) income. The percentage amount from 1 July 2002 is 9%.
In addition, you may be able to increase the amount that your employer contributes to your superannuation account through 'salary sacrifice'.
Many people also decide to "top up" (increase) their contributions to help their superannuation to grow even faster. You can do this by making extra contributions to your employer's superannuation fund or your own personal superannuation fund.
Personal superannuation contributions are generally made with after tax dollars. However, where a person qualifies as self employed they may be able to claim a tax deduction for the contribution.
Making contributions for your spouse will enable you both to take advantage of the tax concessions in superannuation. It will also allow both partners to use the retirement concessions on income streams, such as two tax-free thresholds. There are no limitations to the amount of spouse contributions you can make.
In order to make spouse contributions the following conditions must be met:
Both spouses must be Australian residents for taxation purposes;
The recipient spouse must be younger than 70;
If you make a spouse contribution into superannuation on behalf of your spouse, you may be able to receive a rebate for the contributions.
Family and friends are able to make contributions on behalf of a child up to $3,000 every three years. Whilst there are no specific tax breaks for child contributions, making these contributions will allow the full effect of compounding to grow for many decades by the time the child retires.
Disclaimer - The information contained on this website is given in good faith and has been prepared from information believed to be accurate and reliable. This information is of a general nature only. Mortgage One and its related entities, nor any of their employees, officers or directors gives any warranty of accuracy or reliability nor accepts any responsibility arising in any other way including by reason of negligence for errors or omissions herein. All assumptions and examples are based on the continuance of present laws and Mortgage One’s interpretation of them. Mortgage One does not undertake to notify recipients of changes in the law or its interpretation. This guide is not designed to be a substitute for specific financial or investment advice or recommendations and should not be relied upon as such. Please contact us for advice on your specific needs