Latest news with #DerekGascoigne
Yahoo
22-05-2025
- Business
- Yahoo
$500 ATO cash boost that Aussies have weeks to claim: ‘Hard to beat'
Millions of Australians have just weeks left to secure a free $500 from the government. The cash boost is from the government's superannuation co-contribution scheme and needs to be done before the end of the financial year. The government scheme allows eligible lower and middle-income Australians to top up their retirement savings by partially matching individual after-tax contributions. The government can give you up to $500 if you add in $1,000 yourself, making it a 50 per cent return. UniSuper state manager of advice Derek Gascoigne told Yahoo Finance that Aussies needed to leave enough time for their personal contribution to go into their super fund before June 30. RELATED Superannuation change to give Aussie workers pay rise in weeks: '$29,000 boost' Forgotten ATO deductions that can boost your tax refund by $974 Common $358 a day expense the ATO lets you claim on tax without receipts 'Doing it on the 30th of June doesn't guarantee that the contribution will register in their account on that day to qualify them for the co-contribution,' he said. 'Definitely not leaving it until the last minute is probably the best advice I can give. Deadlines vary from fund to fund, but doing it at least a week or two beforehand should ensure that the contribution will fall safely into the bucket for this financial year.' Gascoigne said the 50 per cent return was 'pretty hard to beat' anywhere else. When compounding is taken into account, the move could make a 'significant' difference to your retirement savings. If you are an eligible low or middle-income earner and make a personal non-concessional after-tax contribution to your super fund, the government will make a 50 per cent co-contribution of up to $500. The co-contribution you receive depends on your income and how much you contribute to your super. You need to earn $45,400 or less for the 2024-25 financial year to be eligible to claim the full $500 amount and contribute $1,000 to your super. You can still get a contribution if you earn up to $60,400, but the amount you can claim will progressively reduce as your income increases. 'The contribution itself slowly diminishes once that person's income reaches $60,400, where it cuts out altogether,' Gascoigne told Yahoo Finance. 'So there's less benefit for someone to do this when they are a lot closer to $60,000 than $45,000.' For example, someone earning $50,000 would be eligible for a maximum co-contribution of $347. That means they would only need to contribute $694, double the $347 co-contribution, to get the maximum benefit. You can use the ATO's calculator to estimate your entitlement and eligibility. To get the government co-contribution for this financial year, you need to make a personal non-concessional contribution to your super fund by June 30. That's contributions from your take-home pay, not contributions made by your employer, salary sacrifice contributions or contributions that have been claimed as a tax deduction. When you lodge your tax return, the ATO will automatically work out if you are eligible and pay the amount directly into your super fund. The ATO said it makes most super contributions between November and January each year for personal contributions made in the previous financial year. Gascoigne said the super co-contribution was an 'attractive' scheme, particularly for younger people. However, it's worth remembering that once you put money into your superannuation, you won't be able to access it until you hit retirement age. 'If you're a 30-year-old and the earliest age at which you can access your super under normal circumstances is 60 if you cease employment, that's 30 years that you're putting that money away,' Gascoigne said. 'From a saving and investment perspective it's amazing, but from a liquidity and funds point of view it obviously has a few knobs on it for some people because there's so many other things that might demand that they have that money ready.' If you are worried about making a big upfront contribution, Gascoigne said you could consider making automated smaller contributions. For example, you may not miss smaller $20 contributions made on a regular basis and this could add up to $1,000 by the end of the year. 'You can get that $500 and rinse and repeat for the following year, hopefully,' he while retrieving data Sign in to access your portfolio Error while retrieving data
Yahoo
16-05-2025
- Business
- Yahoo
$25,500 superannuation ‘hack' that could save Aussies thousands: ‘Clock ticking'
Aussie couples have until June 30 if they want to take advantage of a superannuation "hack" that could help them save tax, boost their Centrelink age pension eligibility and potentially give them access to a bigger retirement nest egg sooner. Super contribution splitting allows couples to transfer up to 85 per cent of concessional super contributions made in the previous financial year from one partner to another. The application can usually only be made once the financial year is over. UniSuper state manager of advice Derek Gascoigne told Yahoo Finance this meant couples keen to take advantage of the strategy for the last financial year only had a limited window of time to act, with the "clock ticking". RELATED Retirement warning as controversial $3 million superannuation tax change looms: 'Be proactive' Coles shopper 'stunned' after getting $50 item free due to little-known rule: 'Insane' Dad with no savings reveals surprising money message for struggling Aussies: 'Living pay to pay' 'Once the clock ticks over onto the 1st of July 2025, then an individual can only go back and split what they made during the 2024 and 2025 financial year,' he said. 'The window to go back and split the 2023-24 financial year is closing rapidly, hence the sense of urgency.' Importantly, couples can only split concessional contributions, which include contributions made by your employer, or any personal contributions you've made contribution splitting can be made to a spouse's super account, which includes de facto spouses. There is no age limit for the splitting partner, but the receiving partner must be under the age of 65, or between 60 and 65 and not retired. Gascoigne said contribution splitting had to be done 'manually' each year and you had to put in an application with your super fund before June 30. 'It's rare, but not all super funds offer it; it's not compulsory for super funds to offer it,' he said. 'So it's always a case of people checking their super funds to make sure they can do this and there's a form to fill out.' Gascoigne gave the example of a person who made $30,000 worth of gross concessional contributions, which is the current concessional contributions cap, last financial year. This then gets taxed at 15 per cent, so the person can split up to 85 per cent of the amount with their partner. That means they can transfer $25,500 into their partner's account. Aussies can also take advantage of carry forward rules, which allow eligible people to carry forward any unused concessional contributions cap amounts from up to five previous years. So if one partner made $60,000 of concessional contributions last financial year, they could still transfer 85 per cent of that amount ($51,000) to their partner's super this year before June 30. The amount transferred does not count towards the partner's contributions cap and is treated more like a transfer or rollover. Gascoigne said there are a few 'strategic' reasons why couples may want to consider contribution splitting, with UniSuper noting it could potentially save couples thousands of dollars. Firstly, there could be tax benefits to equalising the two super balances. 'So often you've got Partner A with most of the super in their name and Partner B has less,' he told Yahoo Finance. '[Contribution splitting] can lead to, for example, both partners being able to potentially hold more money in the tax-free investment environment of the retirement pension phase later on because Partner A is subject to transfer balance cap limits.' The government has announced plans to increase the tax rate for super earnings from 15 to 30 per cent for balances over $3 million. Contribution splitting could help you avoid hitting this limit. Secondly, couples who have an age difference may benefit from the strategy. 'They might split some of the super on a regular annual basis from the younger spouse to the older spouse,' he said. 'Aggregating the super wealth into the name of the person who's likely to be in a position to access that money earlier, they could use it for potentially starting income streams, or it might be accessible as a lump sum to pay down debt.' Likewise, splitting super from an older to a younger spouse could help reduce assessable assets for Centrelink age pension benefits. The younger spouse's superannuation won't be counted by Centrelink while they are under the age pension age. Gascoigne said it's worth considering your partner's super fund, including fees and investments, before you split. 'Are you going from a lower fee fund to a higher fee fund, which would take a bit of the shine off?' he said. 'If you are moving from Partner A's account, which is invested at a particular level of risk, and investing in Partner B's account, which is at a different level of risk, is that what you want?' Gascoigne said it was worth checking with your individual super fund to see if any administrative deadlines applied. It can also be worth seeking financial advice to ensure the strategy is right for your circumstances.
Daily Mail
06-05-2025
- Business
- Daily Mail
Tax pro: The overlooked annual trick that could boost your super by more than $100,000
'What's mine is yours' is the general mantra when it comes to finances in a marriage or de facto relationship. But on paper, some Australian couples find one person in a relationship has a significantly higher super balance. A super expert tells FEMAIL that the opportunity to 'even up' unbalanced super amounts between spouses is an underused tax time trick in Australian households, and could potentially see one person's retirement savings increased by upwards of $100,000. UniSuper senior advice manager Derek Gascoigne explained to FEMAIL that super contribution splitting is an overlooked financial strategy that could be useful for many couples - and is worth considering as the end of the financial year approaches. 'Super contribution splitting is the process of splitting before-tax contributions - such as the employer super guarantee or salary sacrifice contributions - from one spouse's super account to the other's account,' Derek explained. The expert said that one person in a relationship 'can split up to 85 per cent of before-tax contributions up to the individual's concessional contribution cap, which is currently $30,000 (subject to change in future financial years)'. 'This could be higher if they're eligible for any unused concessional contribution cap over the past five years,' Derek added. The financial expert told FEMAIL that there are numerous beneficial reasons why married or de facto couples may want to consider transferring super from one spouse to the other - however, whether it is worth doing will be entirely dependent on each couple's unique circumstances. For instance, it may be worth exploring in the event that one spouse has either been out of the workforce for significant periods (perhaps while starting or caring for family), or, has substantially lower earnings than the other person in the relationship. In this circumstance, Derek said that super splitting to a lower income or non-working spouse offers the chance to 'even up' super balances between spouses. 'Anyone who's been out of the workforce for some time may have a lower amount in super. Contribution splitting from their spouse can boost their super balance and help them catch up,' Derek explained. 'This can be further accelerated if the person has returned to work after some years off and has less than $500,000 in super,' he continued. 'They may be able to also make their own before-tax contributions using their unused contribution cap from the past five years, which could be up to $132,500.' Super contribution splitting could also assist with ensuring the person in the relationship with a lower balance has 'sufficient funds to pay premiums for insurance cover held in super'. In addition, Derek said that there were also benefits to the person in the relationship with a higher super balance - particularly as that person approaches retirement. The super advice manager explained that evening up super balances maximises each spouse's benefits under their transfer balance cap, meaning more wealth could be held in the tax-free investment environment of the retirement income phase than what otherwise could have been the case. A different situation that is worthy of exploring super contribution splitting is in when spouses have a wide age-gap. 'When one member of the couple is older, the younger spouse could split their super contributions to the older spouse, who may be able to access their benefit at an earlier date,' Derek explained. Another potential benefit in this instance is that 'splitting contributions with a younger spouse could result in greater Centrelink or Department of Veterans' Affairs (DVA) pension entitlements when it comes time for the older spouse to apply for those benefits'. However, Derek noted that there are certain limitations when it comes to super contribution splitting - the first being that it's only available between spouses in marriage or de facto relationships. Age is also a factor. People over 65 are not eligible for super contribution splitting and it's also unavailable to people at 'preservation age' (currently age 60 or over) who are permanently retired. There are also limits around the amount of super that can be split, with Derek reiterating that a spouse can 'split up to 85 per cent of the before-tax contributions, up to the individual's concessional contribution cap'. The cap is currently $30,000, but is subject to change in future financial years. Super contribution splitting is also something that you need to apply for through your super fund – and Derek notes that not all funds offer it, while some may charge a fee to arrange it. 'Check in with your fund to see what their process is,' Derek suggested. 'If your fund does allow splitting, there will be a form to complete – the fund may have their own form or use the ATO form.' It's also important to note that this is not a 'set and forget' process. A super contribution splitting application applies only to the previous financial year – meaning you will need to re-lodge it after each financial year that you want it to be applicable to. 'You can only make one application to split per year and the spouse can be with the same or a different super fund,' Derek added. As the end of the current financial year nears an end, this means that any super splitting contribution applications for the 2023/2024 financial year would need to be lodged ahead of June 30. Although it may sound complicated, Derek says a chat with a financial advisor is the best course for determining whether super contribution splitting is a beneficial financial strategy option for you and your spouse. The UniSuper senior advice manager said: 'The benefit of super contribution splitting will depend on the individual's situation and it isn't a 'one size fits all' strategy. Ideally, a financial adviser can assist with determining if this strategy can help you.' DISCLAIMER: The information in this article is of a general nature and doesn't consider your personal circumstances. Before making decisions, you should consider whether the information is appropriate for your circumstances otherwise seek financial advice. UniSuper Advice is operated by UniSuper Management Pty Ltd ABN 91 006 961 799 AFSL No. 235907.
