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With the start of the new financial year, a number of superannuation reforms have come into effect. It's worth understanding these to ensure you're making the most of the opportunities available to you.
Downsizer contribution applies from 1 July
The downsizer contribution can be made from the proceeds of the sale of a client’s main residence where the contract is exchanged on or after 1 July 2018.
Clients aged 65 and over can contribute up to $300K to their super from the sale proceeds of their main residence held for at least 10 years. An approved
ATO form must be provided either before or when the downsizer contribution is made. The downsizer contribution can be made regardless of the other
contributions caps and restrictions that might apply to making voluntary contributions. Refer to the FAQs.
First home super saver scheme (FHSSS) – clients can apply to withdraw super contributions
Starting from 1 July 2017, clients could make voluntary contributions to super for the FHSSS. From 1 July 2018 clients wanting to withdraw these
contributions made during 2017/18 to purchase their first home will need to apply to the ATO for a FHSSS determination using the approved form available
from the ATO website. Once the client is satisfied with the determination amount, they then need to apply for the withdrawal, again to the ATO. The ATO will
then send a release authority to us confirming the withdrawal amount which will be paid to the ATO and then passed to the client. Refer to the FAQs.
Notice of intent to claim a tax deduction for personal contributions – increase in volumes
Some restrictions on who can claim a tax deduction for personal super contributions have been removed from 2017/18. Most individuals under 75 years are
now eligible because the 10% maximum earning condition has been removed. There’s no change to the current process for advising us of a client’s intention
to claim a tax deduction. Refer to the FAQs.
PAYG payment summaries – small number of clients with income streams may now receive these
For the 2017/18 financial year there are changes to requirements for the issue of PAYG payment summaries that relate to the age and circumstances of
All recipients of death benefit payments are taxed at the 60 years or older rate − regardless of their age. The PAYG payment summary now includes a
reversionary income streams checkbox (Yes/No). This distinguishes a recipient based on their age and provides the ATO with the information to ensure the
correct tax is applied to that individual’s income stream. Refer to Capped defined benefit products list.
PAYG payment summaries are issued regardless of income amount and tax withheld. All individuals are required to include information from their PAYG
payment summary in their income tax return so their tax can be calculated against all the CDB income streams they may hold.
This means that an individual with an annual income of less than $100,000 from CDB income streams will receive a PAYG payment summary showing zero
($0) tax withheld.
Non-residents who have not supplied a tax file number, or who are resident of another country, may be taxed at a different rate. These members will be
issued with a PAYG statement.
The ATO provides guidelines about who will need to lodge a tax return. Refer Individual tax return instructions 2018.
Release authority – new streamlined process from 1 July
Currently AMP can receive a release authority from the ATO or from the member, and payment can be made to either the ATO or the member.
From 1 July the request can only come from the ATO, and payment can only be made to the ATO. It applies to five types as outlined in the FAQs.
Release authorities issued before 1 July will remain valid until the period for the super fund to make the payment by has passed. Refer to Release authority
Anti-detriment – time period for claiming tax deductions ending next year
If a member died prior to 30 June 2017, an anti-detriment payment can’t be claimed after 30 June 2019.
Concessional contribution carry forward – first year that they can be claimed
From 1 July members with total super balances under $500,000 at the end of a previous financial year will be able to accumulate unused concessional
contributions and carry them forward for five years - at which time they will expire.
Disclosure requirements supporting these changes
As part of our compliance obligations we’ve updated disclosure documents, digital content and collateral to reflect 1 July 2018 changes to super and pension
legislation. This may include direct communications to clients about super reform changes. Relevant PDS updates will be available from 30 June.
AGS Financial Group Pty Ltd, ABN 70 093 990 946, trading as AGS Financial Group, are authorised representatives of AMP Financial Planning Pty Limited ABN 89 051 208 327 (Australian Financial Services Licence No. 232706). Any advice on this page is general in nature and does not take into account your personal objectives, financial situation or needs. Accordingly, you should consider the product disclosure statement for any product and your own objectives, financial situation and needs before acting on this information and before acquiring a financial product. You can obtain a copy by contacting us on 02 9966 8188.
Financial planning, corporate benefits and mortgage services are provided by AGS Financial Group Pty Ltd ABN 70 093 990 946, an Authorised Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 (AMPFP), AFS Licence No 232706. Accounting, taxation, and business advisory services are provided by AGS Accounting Pty Ltd ABN 12 166 728 696. Liability limited by a scheme approved under Professional Standards Legislation.