By Colin Lewis, Head of Strategic Advice, Fitzpatricks Advice Partners
December 2025

Can you believe we’re halfway through the financial year?

Instead of a mad rush at tax time in June, consider using some holiday downtime now to take stock of where you’re at financially and plan for the remainder of 2025-26.

Look at superannuation to grow your retirement savings while reaping tax benefits along the way.

Super is not just for high-income earners; low-income earners may receive a top-up from the Government of up to $1,000.

Concessional (pre-tax) contributions

These contributions boost your super and provide a tax benefit in the process.

The biggest benefit goes to those earning $190,000 to $250,000 – the latter includes concessional contributions.

People earning up to $37,000 who derive at least 10 per cent of their income from employment or business get a refund of the 15 per cent tax on their contributions up to $500 via a low-income super tax offset payment into their fund.

From 1 July 2027, this income threshold will increase to $45,000 with the maximum payment increasing to $810.

The concessional contributions cap is $30,000.

The compulsory employer – superannuation guarantee – contribution rate is 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 2024-25 and had a total superannuation balance below $300,000 at 30 June 2025, 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 $30,000 cap last financial year or the $27,500 cap each year between 2021-22 and 2023-24, or the $25,000 cap in 2020-21, then any unused cap amounts may be contributed this year provided your total super balance was less than $500,000 at 30 June 2025.

Simply make a larger personal contribution – claiming a corresponding tax deduction – or increase your salary sacrifice contributions.

Using unused cap amounts is a great way to get a bigger deduction and tax saving, e.g. to reduce tax on a capital gain from selling an investment property.

It could mean a tax deduction of up to $167,500 and for SMSF members making a double contribution in June 2026 using a “contribution reserving strategy”, it may be as high as $197,500.

Unused cap amounts are carried forward for five years, so 2025-26 is the last year to use any unused amount from 2020-21 – use it or lose it.

Contribution splitting

Before 30 June, consider splitting up to 85 per cent of your 2024-25 concessional contributions to your spouse’s super.

Do this to fund their life insurance cover, or gain earlier access to tax-free benefits where they’re older, or to maximise the amount you both get into the tax-free retirement phase, or shelter from Centrelink’s means testing where you’re at or over Age Pension age (67) and they’re younger, or to reduce your balance against the proposed new Division 296 tax.

Non-concessional (after-tax) contributions

You don’t get a tax benefit from making these contributions but they’re a pathway to investing in superannuation’s low to no tax structure.

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

Anyone under age 75 – working or not – can make an after-tax contribution provided their total super balance was less than $2 million at 30 June 2025.

If you haven’t triggered the bring-forward rule in the last two financial years and were under 75 at 1 July 2025, you may contribute up to $360,000 provided your total super balance was less than $1.76 million at 30 June 2025, and up to $240,000 if it was $1.76 million to less than $1.88 million.

So, check your contributions since 1 July 2023. 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.

Government co-contribution

If you can, get the Government to boost your super with a co-contribution – the best return on investment you’ll get.

Where your income will be less than $47,488 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 $47,488 and $62,488.

Downsizer contributions

From age 55, you may be eligible to make a downsizer contribution of up to $300,000 ($600,000 for couples) 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.

You can boost your super with a downsizer contribution even where you have $2 million or more in super or you’re aged 75 or over.

Other contributions

You could make a contribution for your spouse (provided they’re under 75) to increase their retirement savings or fund their life insurance cover.

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.

Getting a tax benefit to boost your spouse’s super 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 $1.865 million.

And if you’re using super to save for your first home, contributing 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 retirement phase pension, e.g. account-based pension, the limit on how much you can transfer into it – the transfer balance cap – is currently $2 million.

If you commenced a pension before 1 July 2025, your cap will be less. You can get it from ATO Online via myGov.

You’re required to take a minimum pension drawdown. Where you need more money, consider making a lump sum withdrawal – partial commutation – as it helps your transfer balance cap.

This could help in the future where you wish to put new contributions (e.g. downsizer contribution) into retirement phase, or you’ll inherit your spouse’s super when they die and want to keep their benefits in super – benefits on death must be cashed out or taken as a pension subject to your transfer balance cap.

Now’s a good time to plan to get ahead of the game before tax time in June, which will be upon us before you know it.