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The Auditors Institute Ltd
.3 min read

The end of the financial year is nigh

What’s up for the EOFY

Every financial year has two sides for super – the end of one and the start of another.  So, it’s important that you get them right personally or for your client.  As the end of the financial year approaches, you need to make sure the minimum pensions will be paid, contributions received by the fund in time.

The end of the 2023/24 financial year is unusual as 30 June is on a Sunday.  For superannuation funds it means that pensions should be paid and contributions received by the fund on the previous Friday which is 28 June.   If the transactions are made later than that you may end up with compliance issues if the minimum pension have not been paid.  You may also miss out on tax deductible or non-deductible contributions if they are not received in the fund’s bank account on 1 July 2024 or even later.  Any employers who use a clearing house may find they need to make super contributions earlier so they reach the fund by 28 July.

Pensions

Don’t forget that for the 2023/24 financial year that the minimum account-based pension is at the full rate and not the discounted 50% rate that applied for the 2019/20 to 2022/23 financial years.  Make sure you check the amount of pension you or your client’s have received to meet at least the minimum rate.  Otherwise, it could result in compliance and adverse tax implications for the fund

Early in the next financial year, say in July or August 2024 it is worthwhile to do a quick calculation in advance of the fund accounts being prepared to work out an estimate of the minimum pension that needs to be paid.

Getting contributions right for 2023/24

Contributions must be received by the fund before this year’s cutoff date of 28 June otherwise it will probably be included in next year’s contributions.  If it isn’t counted until then and results in an excess concessional or non-concessional contribution penalties could apply.

If you’ve made personal contributions and wish to claim a tax deduction make sure you are eligible.  If you are between 67 and 75 make sure you meet the work test of 40 hours in 30 consecutive days in the financial year.  Also, make sure a completed election has been given to the fund and acknowledged before you lodge your tax return for the relevant year or, at the latest, by 30 June in the next financial year.

Don’t forget that if you are going to claim a tax deduction any election must be given to the fund before you commence a pension or you rollover all of your benefits to another fund.  If you don’t do that then you are placing the ability to claim the tax deduction in jeopardy.

The contributions caps for the 2023/24 financial year are $27,500 for standard concessional contributions and $110,000 for standard non-concessional contributions.  But you may be entitled to higher levels of contributions if you meet the carry forward rule for concessional contributions and the bring forward rule for non-concessional contributions.

For the 2024/25 financial year, the contribution caps will increase to $30,000 for standard concessional contributions and $120,000 for standard non-concessional contributions.  If you qualify for the carry forward rule for concessional contributions or the bring forward rule for non-concessional contributions you may be entitled to a higher cap amount.

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