Superannuation can be a tax-effective way to save for your retirement.

Why?

This is because both contributions (amounts made to your super or pension account) and withdrawals from super are generally taxed at a concessional (before-tax) rate. All investment earnings in super are also taxed concessionally (before-tax). In addition, from age 60 onwards, withdrawals from your super or pension account are generally tax-free.

Super is a long-term investment, so you usually can’t withdraw your benefits until you reach your retirement age and/or retire permanently. There are some early release conditions and an option to withdraw some types of contributions to purchase your first home - see First Home Super Savers Scheme below.

Why should I consider contributing to super?

The Association of Superannuation Funds of Australia (ASFA) notes say in a study on Superannuation account balances by age and gender* published in October 2017, ‘…the data clearly indicates that, not surprisingly given the impact of continuing contributions and investment returns, the relative shares of superannuation rise markedly with age…’, but that 9.1% of the population aged 25 to 29 have only 2% of total superannuation assets.

As the super system matures and the Super Guarantee increases to 12%**, your employer, will be contributing to your super while you work. That means your super will grow overtime with employer contributions and interest.

Do you think you would have enough to retire comfortably?

This is a question you have to ask yourself if you want to maintain your current lifestyle. Retirement may look like it’s far away, however, starting early with small contributions may help you achieve your long-term objective.

A little bit now could make a big difference later

It’s never too early to start saving and in fact, starting early and adding to your Super, if you can afford it, can help you reap the benefit of dollar cost averaging over time. Even small amounts compound with interest earned, over time. There’s nothing better than seeing how your savings can grow over time to give you an incentive to start saving young in a concessionally taxed environment like super.

Use the compound interest calculator on the Moneysmart website click here

Fact sheet - Making contributions to super

Why is super so super?

Fact sheet - Making contributions to super (cont.)

What are the different types of contributions?

Contributions are split into these different categories:

• Concessional (before-tax) contributions, including,

- Employer Super Guarantee (SG), contributions under an award or industrial agreement,

- Salary sacrifice from your concessional (before-tax) contributions,

- Tax-deductible contributions. (See page 3 How do I claim a tax deduction for a contribution?).

• Non-concessional (after-tax contributions) also known as personal contributions and including,

- Spouse contributions (contributions made by your spouse/partner) to your super account are generally termed after-tax contributions.

• Low income superannuation tax offset

• The Government co-contribution

What are the rules around contributing to super?

Contribution caps

There are caps on the total annual amount that you can contribute to Super under the above categories and penalties apply for breaching them. Some contributions you make to Super are not counted under these caps, such as:

• the Downsizer contribution (see the section on page 6 for more information),

• Personal Injury Payments, and

• Super contributions made from the sale of a small business asset.

There are other contributions that you may receive from the Government depending on your eligibility, which don’t count towards these caps.

Work test or Employment-based rules

To make a personal contribution to Super after reaching age 65, you must have worked 40 hours in at least 30 consecutive days in the financial year in which you make the contribution.

Generally, your Super fund will ask you to sign a declaration to this effect when you make a personal contribution after reaching age 65.

Age based rules

You can contribute to Super up to age 75, but you must meet a ‘work test’ for certain Super contributions once you reach age 65. From age 75, only Super Guarantee (SG) or contributions under an award/industrial agreement can be made to your super account.

Downsizer contributions can be made once you reach age 65, but you don’t have to meet the work test to make this contribution - see Downsizer contributions.

Providing your Tax File Number

It’s not mandatory that you provide a Tax File Number (TFN) to your Super Fund but if you don’t provide it, we can’t accept your after-tax contributions and your before-tax contributions will be taxed at a higher rate.

Concessional (before-tax) contributions

Fact sheet - Making contributions to super (cont.)

The concessional (before-tax) contributions cap is $25,000 for the financial year. This applies across all the accounts you hold in Super. Concessional (before-tax contributions) are generally taxed at 15% in your Super account.

Generally, if your income plus your concessional (before-tax) contributions is more than $250,000, you’ll pay an additional 15% tax on the amount of those contribution and they will be assessed by the Australian Taxation Office (ATO).

Concessional (before-tax) contributions include:

• compulsory superannuation guarantee (SG) contributions paid by your employer,

• contributions paid by your employer under certain industrial arrangements (such as an award),

• voluntary employer contributions,

• salary sacrifice contributions, and

• personal contributions for which you can claimed (or intend to claim) a tax deduction.

How can I make before-tax contributions to my super account?

Not all employers allow for salary sacrifice options. If your employer allows for salary sacrifice, use our Member payroll deduction authority form available on our clubplussuper.com.au or call us on our Member Hotline on 1800 680 627 for more information and a copy of the forms.

Alternatively, you could make personal contributions to super and claim a tax deduction - see below at the ATO website.***

How do I claim a tax deduction for a contribution?

From 1 July 2017, anyone can make a personal contribution to Super and claim a tax deduction using the Member voluntary contribution form^^. Previously, this option was only available to members who were largely self-employed. Once you send in your form,

we will tax your contribution at 15% and convert it to a concessional (before-tax) contribution.

You should wait on a written confirmation from us before you claim the deduction in your tax returns.

The timing of your notice is important so make sure you check the instructions on the form available on the Australian Taxation Office website: ato.gov.au*** Alternatively, call our Member Hotline on 1800 680 627.

Can I carry forward my unused concessional contributions cap?

From 2019-20, you will be able to carry-forward your unused concessional (before-tax) contributions cap amount from the previous year, for rolling five-year periods as long as your total superannuation balance is less than $500,000 on 30 June 2019. Your total superannuation balance consists of the value of all your superannuation accounts and your retirement phase accounts.

What happens if I go over the concessional (before-tax) contributions cap?

Excess concessional contributions are taxed at your marginal tax rate (plus an excess concessional contributions tax interest charge). You also have the ability to withdraw 85% of your excess concessional contributions on assessment by the ATO.

Your total superannuation balance affects both the carry forward option for before-tax contributions and your ability to make after-tax contributions and receive some government benefits in Super. You can check out your total superannuation balance on your MyGov account. Your total superannuation balance is generally a total of your superannuation and retirement accounts, less some exempt contributions.

To find out more about your total superannuation balance go to ato.gov.au

Total Superannuation Balance

Non-concessional (after-tax/personal) contributions

Fact sheet - Making contributions to super (cont.)

The non-concessional (after-tax/personal) contributions cap is $100,000 for the financial year and this applies across all the accounts you hold in Super. Non-concessional (after-tax) contributions allow you to make regular payments or lump sum payments.

If you are under 65 at the start of the financial year and you have less than $1.4 million as a total superannuation balance, you can bring forward two additional years’ worth of non-concessional contributions and contribute up to $300,000 in one year. This may come in handy if you receive a financial windfall such as an inheritance or the sale of a large asset, like a property. If you choose to do this, you may not be able to contribute any more in the next two years.

If you have more than $1.6 million^ as a total superannuation at the end of the previous financial year, you won’t be able to make any after-tax contributions for the current financial year and you won’t be able to bring forward contributions.

For more information and for bring forward options for total superannuation balances between $1.4 and $1.6 million go to: ato.gov.au or call our Member Hotline on 1800 680 627 for more information.

How can I make non-concessional (after-tax) contributions to my account?

You can make non-concessional (after-tax) contributions to your Super account with Club Plus Super by:

• BPAY®: Log in to MemberAccess for your BPAY biller code and reference number.

• Cheque: Complete the Voluntary Contribution form available from clubplussuper.com.au/members/members-portal/forms-pds/superannuation-forms/, attach your cheque(s) and send it to us.

• Direct debit: Complete the Direct Debit Authority form and send it to us and we will deduct regular amounts from your nominated bank account and invest it in your super account.

Call us on our Member Hotline on 1800 680 627 or go to clubplussuper.com.au for more information or to download a copy of the forms.

What happens if I go over the non-concessional (after-tax) contributions cap?

If you go over the non-concessional cap, you can withdraw the excess non-concessional contributions, and any earnings. The earnings would then be included in your income tax assessment. If you choose not to withdraw your excess contributions, they are taxed at the top marginal tax rate. The ATO will make an assessment and send you a determination.

Low income superannuation tax offset

The Government co-contribution

Fact sheet - Making contributions to super (cont.)

If you earn less than $37,000 you may be eligible for the low-income superannuation tax offset (LISTO) from the Government. The LISTO refunds

the 15% contributions tax you pay on your SG contributions and any salary sacrifice contributions you make, up to a maximum of $500.

If you’re a low or middle-income earner and make after-tax contributions to your super fund, the government also makes a contribution (called a co-contribution) up to a maximum amount of $500.

The amount of the government co-contribution you receive depends on your income and how much you contribute. In addition, to be eligible for the co-contribution:

• your non-concessional (after-tax) contributions must not exceed your non-concessional contributions cap for the relevant financial year

• on 30 June of the previous financial year, your total superannuation balance must not be more than the general transfer balance cap ($1.6 million for 2018–19).

More information can be found at ato.gov.au

What are the other options & benefits available to me?

Spouse tax offset

If you make non-concessional (after-tax) contributions to the eligible super fund of your spouse, whether married or de-facto, and your spouse’s income is $37,000 or less, you may be eligible to claim a tax offset of up to $540. The tax offset amount will gradually reduce for income above this amount and completely phases out when your spouse’s income reaches $40,000.

You will not be entitled to the tax offset if your spouse:

• exceeds their non-concessional contributions cap for the relevant year, or

• has a total superannuation balance equal to or above the general transfer balance cap ($1.6 million for 2018–19) prior to the financial year in which the contribution was made.

Issued by Club Plus Superannuation Pty Limited ABN: 26 003 217 990, AFSL No. 245362, the Trustee of the Club Plus Superannuation Scheme ABN: 95 275 115 088. Any advice in this document is of a general nature only and does not take into account your personal objectives, financial situation or needs. Prior to acting on any information in this document, you need to take into account your own financial circumstances, consider the appropriate Product Disclosure Statement for any product you are considering and seek independent financial advice if you are unsure of what action to take. The material contained in this document was up to date when it was prepared. However, this information may be subject to change from time to time.

Club Plus Financial Planning Pty Ltd (Club Plus Financial Planning), ABN 14 143 636 766, is a Corporate Authorised Representative #367058 of Adviser Network Pty Ltd, ABN 25 056 310 699 (“Licensee”). The Licensee holds a current Australian Financial Services Licence #232729 and is responsible for the financial services provided to you. All Club Plus Financial Planning’s financial advisers are sub authorised representatives of the Licensee.

* Superannuation account balances by age and gender – Author Ross Clare, published by ASFA Research and Resource Centre (October 2017)

** ato.gov.au/Rates/Key-superannuation-rates-and-thresholds/?page=24*** ato.gov.au/forms/notice-of-intent-to-claim-or-vary-a-deduction-for-

personal-super-contributions/^ 2017-18 and 2018-19 figure - indexed in line with the consumer price

index (CPI), rounded down to the nearest $100,000.^^ clubplussuper.com.au/wp-content/uploads/2017/08/Member-

Voluntary-Contribution-Form.pdf^^^ https://supermatch.clubplussuper.com.au/

Spouse super splitting

You can ask your Super fund to transfer to your spouse up to 85% of a financial year’s ‘taxed splittable contributions’. These are generally:

• any contributions your employer made for you (your concessional (before tax) contributions), including any salary sacrifice contributions

• any non-concessional (after-tax and personal) contributions you made for yourself that you have advised your super fund you will claim a tax deduction for.

These contributions will still count towards your concessional (before-tax) contributions cap and not your spouse’s.

Downsizer contributions

If you have reached age 65, you can make a contribution of up to $300,000 of proceeds from the sale of your home to your super account without having to meet the work test. The ATO assesses your eligibility to make these contributions so do read the rules at the back of the Downsizer contribution into superannuation form available at clubplussuper.com.au or by calling our Member Hotline on 1800 680 627. These contributions are not counted towards your non-concessional cap.

First Home Super Saver Scheme

You can make voluntary contributions to Super from 1 July 2017 that can be withdrawn from Super from 1 July 2018 to purchase your first home. You can contribute up to a maximum of $15,000 each financial year in voluntary contributions up to a maximum of $30,000 in total as long as it is within your contribution caps. You can only make one withdrawal under this scheme up to the maximum amount of $30,000.

First ask the ATO for a determination before you go ahead with your purchase. You can apply online for a determination using your MyGov account. For eligibility rules and more information go to: ato.gov.au

Consolidating your benefits

You can choose to consolidate your benefits in Club Plus Super, by rolling in monies from other funds. These transfers don’t count towards your before or after-tax contributions cap as they have been counted in the originating fund.

They retain the components that they originally held in your previous fund and are not taxed on entry, unless there is an untaxed element. See the Search and consolidate tool^^^ on our website clubplussuper.com.au or call our Member Hotline on 1800 680 627 for more information.

Before you make a decision, you should ensure that you check any exit fees, insurance cover you may lose and tax implications and seek financial advice, if you are unsure.

Seeking Financial Advice?

Club Plus Super Financial planning can give you advice on your super or pension. Get in touch with our experienced Financial Advisors for a no obligation appointment via email on advice@clubplussuper.com.au or call our Member Hotline on 1800 680 627

Fact sheet - Making contributions to super (cont.)

Postal address: Locked Bag 5007 Parramatta NSW 2124

Member hotline: 1800 680 627

Member email: member@clubplussuper.com.au

Website: clubplussuper.com.au10/18 Iss 1