If you have some downtime during the holiday season, why not take stock of where you’re at financially and plan for the next six months to take advantage of the super opportunities available to you.

Now is a good time to get your financial house in order for the remainder of this financial year rather than leaving to the last minute – June 30.

People are struggling with cost-of-living pressures but with the stage 3 tax cuts well and truly in play, hopefully you’ll know how you’re fairing with more disposable income and whether you have any surplus to invest.

If you do, consider topping up your superannuation – after reducing your mortgage – as it’s the most tax-effective structure to have your money in.

And super is not just for high-income earners.  Low-income earners doing little things may receive a top-up from the government after tax time of up to $1,000.

Concessional contributions

Pre-tax contributions provide the opportunity to grow your retirement savings while reaping tax benefits along the way.

Whilst the greatest benefit goes to people earning $190,000 to $250,000* (*including concessional contributions), those earning up to $37,000 who derive at least 10 per cent of their income from employment or business, receive a low income super tax offset payment of up to $500.  It effectively refunds the 15 per cent tax on their contributions, ensuring they don’t pay more tax on them than on their take-home pay.

The concessional contributions cap is $30,000 – up $2,500 from 2023-24.

The Superannuation Guarantee (SG) rate increased to 11.5 per cent.  So, the opportunity for wage earners to make increased voluntary pre-tax contributions this year is partly absorbed by the increase in their employer’s compulsory contributions.

From July 1, 2025, the SG rate rises to 12 per cent.

If you’re aged 67 to 74 and wish to claim a tax deduction for a personal contribution, you must meet the work test – 40 hours of gainful employment in 30 days.

If you won’t meet this test, but met it in 2023-24 and had a total superannuation balance below $300,000 at June 30, 2024 then you may contribute under the ‘work test exemption’ provided you haven’t used this exemption before.

Generally, you have up until 28 days after the end of the month in which you turn 75 to contribute.

Catch-up concessional contributions

If you didn’t use the full $27,500 concessional contributions cap in each of the last three financial years or the $25,000 cap in the two years before that, then any unused cap amounts may be contributed this year – giving you a bigger deduction and tax saving.

Do this by making a larger personal contribution and claiming it as a tax deduction, or increasing salary sacrifice contributions.

But the catch is your total superannuation balance must have been less than $500,000 at June 30, 2024.

Unused cap amounts can be carried forward for up to five years, so this financial year is the last year to use any unused amount from 2019-20 – so, use it or lose it.

For some people it may mean a tax deduction of up to $162,500.  And for SMSF members able to use a ‘contribution reserving strategy’ and make a double contribution in June 2025, it could be as high as $192,500.

Utilising unused cap amounts can be extremely useful where you need to make a large one-off contribution to reduce capital gains tax arising from say the sale of an investment property.

Non-concessional contributions

The non-concessional contributions cap is $120,000.

Anyone under age 75 – whether working or fully retired – can make an after-tax contribution provided their total superannuation balance was less than $1.9 million at June 30, 2024.

Non-concessional contributions bring-forward rule

If you haven’t triggered the bring-forward rule in the last two financial years and were under 75 at July 1, 2024, you may contribute up to $360,000 provided your total superannuation balance was less than $1.66 million at June 30, 2024 and up to $240,000 if it was $1.66 million to less than $1.78 million.

So, check your contributions since July 1, 2022.  Look out for any excess concessional contributions not withdrawn from super as they count as non-concessional contributions and may have caused you to inadvertently trigger the bring-forward rule – a trap for the unwary.

Downsizer contributions

From age 55, you may be eligible to make a downsizer contribution of up to $300,000 ($600,000 for a couple) where you sell a home that you or your spouse owned for at least 10 years and contribute the proceeds within 90 days of settlement.

A downsizer contribution allows you to boost your super even if you’re otherwise ineligible to contribute due to age or total superannuation balance – you can contribute even if you’re aged 75 or more or have $1.9 million or more in super.

Government co-contribution

If your income will be less than $45,400 with at least 10 per cent of it coming from employment or business, then consider contributing $1,000 to get a $500 top-up from the government – free money.  But you must be under 71.

The co-contribution progressively reduces where you earn between $45,400 and $60,400.

Other contributions

You could make a contribution for your spouse provided they’re under 75.

If your spouse earns less than $37,000 and you contribute up to $3,000, you can claim an 18 per cent tax offset – a benefit of up to $540.  The tax offset progressively reduces where they earn between $37,000 and $40,000.

Boosting your spouse’s super while getting a tax benefit in the process is a win-win situation.

If you’re an eligible small business owner selling your business or an active business asset, don’t overlook the opportunity to make a CGT cap contribution of up to $1.78 million.

And if you’re using super to save for your first home, a voluntary contribution of up to $15,000 will help you get to the maximum releasable amount of $50,000 under the First Home Super Saver Scheme quicker – it takes years to get the greatest benefit from the scheme.

Commencing a super pension

If you’re looking to start your first pension, the limit on how much you can transfer into it – the general transfer balance cap – is $1.9 million.

On July 1, this cap may well increase to $2 million depending on movements in the CPI – meaning you could get more into the tax-free retirement phase.

So, if you’re going to be limited by this cap (which also impacts how much you can receive by way of a death benefit pension when a loved one dies), you may want to hold off commencing a pension – other than a transition to retirement pension – until then.

If you commenced a pension before July 1, 2024, your transfer balance cap will be less.  You can obtain it from ATO Online via myGov.

Pension drawdowns

Should you require more income than the requisite minimum, consider taking it as a lump sum withdrawal – partial commutation – as it helps your transfer balance cap.

Now is an ideal time to plan to get ahead of the game before tax time in June – which will be upon us before you know it.