know it all

On 1 July 2017, the Federal Government is making changes that may impact you and the way you manage your super. Are you affected? Find out here. 

 

I add extra to my super (or I would like to...)

If you top up your super savings (regularly or more ad hoc) - or you would like to - there are changes that could affect you.

I want to know it all

 

I am preparing for retirement

If you have a HESTA Transition to Retirement (TTR) Income Stream or are thinking about starting one, there are changes that will affect you.

I want to know it all


 

I earn under $37,000 a year

Not sure if these changes apply to you? Even if you don't have much in super there are some changes that could help you save more for the future.

I want to know it all

 

 

already enjoying retirement?

If you're a retired HESTA Income Stream member, you may still need to consider your options.

There is no need to take any action. These government changes coming into place on 1 July 2017 won't require you to change your current strategy. Your earnings remain tax free. 

From 1 July 2017, the amount you can hold in your HESTA Retirement Income Stream will be limited to $1.6million.

It's important that from 1 July 2017 the maximum combined balance you have in your HESTA Retirement Income Stream and any other superannuation income streams is $1.6 million. It's important that you transfer any excess out prior to 1 July 2017 or a penalty may apply. You may transfer the amount into super or into your bank account. If you have a balance between $1.6m and $1.7m on 1 July, you'll have 6 months to remove the excess without penalty. However, if you have more than $1.7m on 1 July 2017, you may be subject to an excess tax charge.

Worried you might be near the cap? Request a call from a HESTA adviser to assess your options. Please note that you will need to do this before 15 June 2016 so that we can make sure any excess is transferred out before 30 June.

If you currently have a TTR, are between preservation age and 65 you should let us know so that we can convert your TTR to an account based pension which will remain tax free post 1 July. If you don’t notify us you run the risk of being taxed up to 15% on your earnings. 

  • Want to let us know you have retired? Simply complete this form.

Or to learn more

 

adding extra to your super

How much you can put in is going down (but it's still worth it).

Contributions you (and your employer) make to your super from your before-tax pay are taxed at 15%. Currently, once these contributions go over $30,000 (if you're under 49) OR $35,000 (if you're 49+) the tax rate increases.  

From 1 July 2017 the point the higher tax rate kicks in reduces to $25,000 for everyone. 

We know not everyone will be in a position to put this kind of money into their super every year, but we also know it’s really important to keep you informed of what’s changing and what your options are.

If you think this might impact you, you can make the most of the higher amount this financial year and then adjust your plans for next year. 

Where do you start? Talk to your employer if you're ready to make changes. 

If you need more information before making a decision, here's how we can help.

If you are making contributions to more than one super fund either directly or via your employer then these contributions will also count towards the cap (i.e. if you have two super funds the one cap still applies).

 

 

From 1 July 2017 anyone can make contributions to their super directly and claim the deduction on their tax return. 

This is ideal if your employer doesn’t offer salary sacrifice or if you are partially or fully self-employed.

Once you've made your contributions, HESTA needs to be involved before you can claim a tax deduction from the ATO.

Just complete this ATO form and mail it to us before (whichever comes first); 

  • the date you lodge your tax return, OR
  • the end of the financial year after the contribution was made, OR 
  • you withdraw your super from HESTA OR
  • you commence an Income Stream.

We’ll check your form and let you know that it’s valid, so you can proceed with the relevant option above. If your form is not valid we will let you know next steps.

If you want more information join one of our 1 July changes webinars.

Making contributions directly into your super from your savings or your take-home pay is called a ‘non-concessional’ or ‘after-tax’ contribution.

At the moment you can put up to $180,000 per year into your super using this method. 

We understand this is a lot of money and not everyone will be impacted by this change. However, if this sounds like you, read on.

From 1 July 2017, this is reducing to $100,000 per year.  

If you act now, you can make the most of the higher cap this financial year and also (where appropriate) adjust your plans for next year. 

Ready to make a contribution?

By:

  1. Direct debit: complete this direct debit form 
  2. BPAY: login to Member Online for your Biller Code and Reference Number.
  3. Cheque: complete this contribution deposit form

Or to learn more

If you’re under 65, you can do what’s called ‘bringing forward’ three years’ worth of after-tax contributions.

This means from 1 July, 2017 you can put in up to $300,000 over three years. (This might change once your balance reaches $1.6million.) 

However, there's still time to take advantage of the higher cap this year. You may still be able to contribute up to $540,000 before 30 June 2017, depending how much you have put in as after-tax contributions over the last three years.

If you are already making the most of the bring-forward rule but haven’t reached the limit, there are ‘transitional arrangements’ in place, to learn more about this contact your HESTA Advice team.

As a high income earner, from 1 July 2017, you may have to pay more tax (known as Division 293 tax) on any before-tax contributions made to your super. 

The additional tax is 15% and the Australian Tax Office (ATO) will let you know if you have to pay this. You can pay it directly once you receive the assessment from the ATO or you have the option to pay some or all of it from your super balance. 

To learn more about this additional tax visit www.ato.gov.au for more information.

If you are approaching $1.6million in super then there are significant changes to the way you may need to manage your money from 1 July, 2017.

Is this you?

Then the HESTA Advice team would love to talk to you and help with a tax effective strategy.  Make an appointment now.

 

transitioning to retirement

There are changes that will affect you. But we can help.

If you have a HESTA Transition to Retirement (TTR) Income Stream, your money is already invested in a way that is designed specifically for those approaching or in retirement. But of course, you have options and can choose what’s best for you.

One of the other benefits is that the earnings from these investments are not currently taxed.

From 1 July 2017 the government is changing the way they apply tax for investments attached to this ‘transition’ stage. This means earnings from your TTR investments next year will attract a tax rate of up to 15%.

Of course, once you're eligible to move your money into a Retirement Income Stream, all your earnings will be tax–free.

If you want to understand when you will become eligible for a retirement account or explore your Income Stream options in more detail, you can read all about it (and apply for one) here.

If you still have questions or want to talk things through, set up a time to talk to a HESTA Adviser to work through your options.

 

If you currently have a TTR, are between preservation age and 65 you should let us know so that we can convert your TTR to an account based pension which will remain tax free post 1 July. If you don’t notify us you run the risk of being taxed up to 15% on your earnings. 

  • Want to let us know you have retired? Simply complete this form.

Or to learn more

From 1 July 2017, the amount you can transfer from your super account to a retirement income stream will be limited to $1.6 million.  

We know this is a lot of money for most people, but if your balance is close to this amount then it’s worth noting this change.

What counts towards the cap?

Any money you transfer from a super account into a retirement income stream (including super pension and annuity products) counts, across all funds and all accounts.

BUT anything you transfer into a Transition to Retirement (TTR) income stream will not count (as you’re now paying 15% tax on TTR investment earnings the government is cutting you some slack on this one).

Worried you might be near the cap? Make an appointment to talk to a HESTA adviser to assess your options.

Not worried about the cap but want to know more about HESTA retirement options? Click here.

 

Contributions you (and your employer) make to your super from your before-tax pay are taxed at 15%. Currently, once these contributions go over $30,000 (if you're under 49) OR $35,000 (if you're 49+) the tax rate increases.  
 
From 1 July 2017 the point the higher tax rate kicks in reduces to $25,000 for everyone. 
 
We know not everyone will be in a position to put this kind of money into their super every year, but we also know it’s really important to keep you informed of what’s changing and what your options are.
 
If you think this might impact you, you can make the most of the higher amount this financial year and then adjust your plans for next year. 
 
Where do you start? Talk to your employer if you're ready to make changes. 
 

If you need more information before making a decision, here's how we can help.

If you are making contributions to more than one super fund either directly or via your employer then these contributions will also count towards the cap (i.e. if you have two super funds the one cap still applies).

Making contributions directly into your super from your savings or your take-home pay is called a ‘non-concessional’ or ‘after-tax’ contribution.

At the moment you can put up to $180,000 per year into your super using this method. 

We understand this is a lot of money and not everyone will be impacted by this change. However, if this sounds like you, read on.

From 1 July 2017, this is reducing to $100,000 per year.  

If you act now, you can make the most of the higher cap this financial year and also (where appropriate) adjust your plans for next year. 

Ready to make a contribution?

By:

  1. Direct debit: complete this direct debit form
  2. BPAY: login to Member Online for your Biller Code and Reference Number
  3. Cheque: complete this contribution deposit form

Or to learn more

If you’re under 65, you can do what’s called ‘bringing forward’ three years’ worth of after-tax contributions.

This means from 1 July, 2017 you can put in up to $300,000 over three years. (This might change once your balance reaches $1.6million.) 

However, there's still time to take advantage of the higher cap this year. You may still be able to contribute up to $540,000 before 30 June 2017, depending how much you have put in as after-tax contributions over the last three years.

If you are already making the most of the bring-forward rule but haven’t reached the limit, there are ‘transitional arrangements’ in place, to learn more about this contact your HESTA Advice team.

 

I earn under $37,000 a year

Some good news for you.

The Low Income Super Contribution (LISC) will be replaced by the Low Income Superannuation Tax Offset (LISTO), but the name is the only thing that’s changing.

You may not have noticed, but it might be worth checking your super statement, because if you're eligible the government automatically pays up to $500 into your super, every year.

The ATO will determine if you're eligible and make the payment, so you don’t need to let HESTA or the government know you would like to receive this benefit.

BUT WAIT - if we don't have your tax file number (TFN) on record then the payment can't be made into your account. Check that you've provided your TFN by logging into your Member Online account

If you want more information join one of our 1 July changes webinars.

We understand it’s unlikely you will be putting over $100,000 into your super in a year. 

However, there can be times where you receive a significant amount (e.g. inheritance) and look to add this to your super. 

If you do put more than $100,000 into your super after 1 July 2017 you won’t be eligible to receive the co-contribution payment, even if you meet the other requirements.   

From 1 July 2017, more people are eligible to receive the 'spouse offset'.

So this is worth a look.

If you earn less than $40,000 a year your partner could contribute money into your super account and potentially claim a tax offset of up to $540 (against a $3,000 contribution), which could lower their tax bill.

Note: If your partner is aged over 65, they may need to meet other conditions. More detail is on the back of the spouse contribution form.

If you want more information join one of our 1 July changes webinars.

 

 

 

Want to know more?

If you think you're affected and need to talk, we are available to help.

Issued by H.E.S.T. Australia Limited ABN 66 006 818 695 AFSL No. 235249, Trustee of Health Employees Superannuation Trust Australia (HESTA) ABN 64 971 749 321. This information is of a general nature. It does not take into account your objectives, financial situation or specific needs so you should look at your own financial position and requirements before making a decision. You may wish to consult an adviser when doing this. Before making a decision about HESTA products you should read the relevant Product Disclosure Statement, and consider any relevant risks (hesta.com.au/understandingrisk).

This information does not relate to the HESTA or HESTA Personal Super products. For more information about those products visit hesta.com.au/pds