With just a few more days until we farewell 2023, here are some reminders and tips to ensure your SMSF is ready for 30 June 2024:
1. The Superannuation Guarantee is now at 11%
2. Concessional Contribution Caps
| Member’s Total Super Balance at 30 June 2023 | Cap Amount | |
| Standard contributions | $500,000 or over | $27,500 |
| “Catch-up” contributions | Less than $500,000 | $27,500 + “Unused Concessional Contribution Amount” |
3. Catch-up / “Unused” concessional contribution cap
For members whose Total Super Balance was less than $500,000 on 30 June 2023, they may be able to utilise their unused concessional contributions caps on a 5-year rolling basis. That is, the 2024FY is the last year in which you can use any leftover concessional contributions from the 2019FY. Your “Unused Concessional Contribution Amount” is tracked by the ATO and can be found via your myGov login or through your personal tax agent.
4. Work test for personal concessional contributions
The work test (ie. gainfully employed for least 40 hours over 30 consecutive days) will only apply if an individual is aged between 67 and 74 and they wish to claim a tax deduction for the voluntary contributions they make into the SMSF, (ie. personal concessional contributions) and this test can be met at any time in the financial year. If an individual is turning 75 in the year they wish to make a personal concessional contribution, in addition to meeting the work test, they need to make the contribution no later than 28 days in the month following their 75th birthday.
5. Valid notice of intent to claim personal superannuation contributions
When contributions are made they are automatically classed as a non concessional contribution until a valid notice of intent to claim a deduction is submitted to the SMSF in accordance with ITAA1997s.290-170. This notice of intent to claim can be lodged at the same time the contribution is made or by the earlier of:
- the date the tax return is lodged for the financial year the contribution was made; or
- the end of the financial year following the financial year in which the contribution was made.
6. Can a valid notice of intent not to claim a personal superannuation contribution be rejected by a SMSF?
Yes – an SMSF and will have to reject the notice of intent to claim in circumstances such as when the:
- member has left the fund
- contribution(s) being claimed have been rolled over to another fund
- contribution(s) being claimed have been withdrawn as a lump sum
- contribution(s) being claimed have been used to commence a pension.
7. Non Concessional Contribution Caps
| Total Super Balance as at 30 June 2023 | Non-concessional contribution & bring forward available starting 1 July 2023 |
| Less than $1.68 million | 3 years ($330,000) |
| Greater than or equal to $1.68 and less than $1.79 million | 2 years ($220,000) |
| Greater than or equal to $1.79 and less than $1.9 million | 1 year ($110,000) |
| Greater than or equal to $1.9 million | Nil |
8. Contributions for individuals < 75 years old
All non-mandated contributions can be accepted except for downsizer contributions which are subject to eligibility rules. This includes salary sacrifice, personal concessional and non-concessional contributions, spouse contributions and co-contributions. For individuals turning 75, contributions must be received no later than 28 days into the month after they turn 75. Furthermore, if they are intending to claim a personal concessional contribution a valid notice of intent needs to be submitted within the above time frames.
9. Contributions for individuals 75 years old and older
Apart from downsizer contributions non-mandated contributions are not permitted – should the latter have been incorrectly made to the SMSF they must be rejected and returned at the earliest opportunity.
10. Bring forward rule for non concessional contributions when an individual turns 75 during 2024FY
Apart from having a Total Super Balance less than $1.68m at 30 June 2023, the individual must be less than age 75 on 1 July 2023. In addition, they must not have triggered the bring-forward rule in the 2022FY or 2023FY.
Example 1: Wilson turns 75 on 25 December 2023 so he has until 28 January 2024 to make a non-concessional contribution of $330,000 and no work test is required.
11. What happens if my contribution deadline upon turning 75 crosses two financial years?
Example 2: Dianne turns 75 on 25 June 2024 so although she is eligible to make contributions until 28 July 2024, she cannot utilise the bring forward rules and can only contribute $110,000 in non concessional contributions in the 2024FY and 2025FY if she wishes to do so. (Note: this assumes the $1.68m threshold remains unchanged at 1 July 2024)
12. Rejecting super contributions over and above the contribution caps
Trustees of an SMSF cannot reject contributions based on the amounts anymore. The only time they could do this is if there has been a breach of SISR 7.04 when the contribution can’t be accepted in the first place and this only applies to members that do not meet the age 75 deadline of 28 days in the month following their 75th birthday. That means, any contributions made in excess of the applicable contribution cap will result in either an excess concessional or non concessional contribution.
13. What are the ramifications of Excess Concessional Contributions?
If you exceed your Concessional Contributions Cap in a financial year the ATO will issue an:
- Excess Concessional Contributions Determination notice;
- Excess Concessional Contributions Election form; and
- Amended (Personal) Income Tax Return Notice of Assessment.
The excess concessional contributions will be included in your assessable income and taxed ats your marginal tax rate less a 15% tax offset. Then the two options are:
- withdraw up to 85% of the excess concessional contributions from the SMSF using the election form then:
- wait until the ATO processes the election and issues a Release Authority to the SMSF
- only then can the SMSF proceed to release the excess concessional contributions and pay the ATO
- leave the excess concessional contributions in the SMSF which means:
- the SMSF does not need to do anything further (ie.do not submit the election form)
- the member pays the additional personal tax liability as a result of the excess concessional contributions from their savings outside of the SMSF
- the excess concessional contributions will count towards your non concessional contribution cap for the same financial year, and there is a risk you could inadvertently exceed that cap too
14. Excess Non Concessional Contributions
Similarly, if you exceed your Non Concessional Contributions Cap in a financial year the ATO will issue an Excess Non Concessional Contributions Determination notice outlining the excess, the associated earnings amount and the total release amount. Then the two options are:
- withdraw the total release amount including the excess non concessional contributions from the SMSF and:
- wait until the ATO issues a Release Authority to the SMSF
- only then can the SMSF proceed to discharge the total release amount and pay the ATO
- leave the excess concessional contributions in the SMSF then:
- log into your MyGov account and elect not to release the excess non concessional contributions
- wait until the ATO issues an Excess Non Concessional Contributions Tax Assessment which will be calculated at 47%
- wait until the ATO issues a Release Authority to the SMSF for the Excess Non Concessional Contributions Tax liability
- only then can the SMSF proceed to release the required amount and pay the ATO within 10 business days.
15. Total Super Balance Cap & Transfer Balance Cap increased
Both the Total Super Balance Cap and General Transfer Balance Cap increased to $1.9m (up from $1.7m) on 1 July 2023.
16. Personal Transfer Balance Cap
Every member will have their own personal Transfer Balance Cap depending on whether they have ever had a retirement phase pension or received a death benefit pension prior to 1 July 2023. That is, not everyone will have the $1.9m General Transfer Balance Cap so it is imperative that this is checked prior to commencing any new retirement income streams to ensure their Personal Transfer Balance Cap is not exceeded.
17. Can you split your superannuation across two or more funds to overcome the Total Super Balance Cap?
No. All of your superannuation balances are combined to determine your Total Super Balance at each 30 June and this will determine whether you can make catch-up concessional contributions and/or non-concessional contributions each year. As such, timely lodgment of your SMSF income tax return is important.
18. Government Co-contribution increase
The income eligibility threshold for Government Co-contributions is now $43,445 – $58,445 (up from $42,016 – $57,016), with the maximum entitlement remaining at $500.
19. When can I access my superannuation benefits?
SMSFs have strict rules on when super monies can be withdrawn from the fund, most commonly when a member satisfies a form of retirement and/or reaches a certain age.
Your super can be accessed:
- when you turn 65 (even if you haven’t retired); or
- when you reach preservation age and retire; or
- under the Transition to Retirement (“TTR”) rules, while continuing to work.
20. What is the definition of retirement?
Depending on your age, a different “retirement” definition applies and this will determine if you can withdraw money from your super fund. Below are the definitions you will need to satisfy should you wish to access your superannuation monies.
Aged 55 and less than age 60
- you’ve met your preservation age; and
- ceased gainful employment ie. stopped meeting the work test; and
- have no intention of returning to work for 10 hours or more each week
Aged 60 and less than age 65
- you’ve met your preservation age; and
- ceased one form of gainful employment ie. stopped meeting the work test
Aged 65 and over
- you are deemed retired irrespective of your working status
21. What is my preservation age?
| Date of Birth | Preservation Age |
| Before 1 July 1960 | 55 |
| 1 July 1960 – 30 June 1961 | 56 |
| 1 July 1961 – 30 June 1962 | 57 |
| 1 July 1962 – 30 June 1963 | 58 |
| 1 July 1963 – 30 June 1964 | 59 |
| From 1 July 1964 | 60 |
22. Minimum pension requirements – 50% reduction abolished
As the temporary 50% reduction in the minimum pension requirement due to Covid-19 no longer applies the minimum percentage has reverted to the standard rates. Please ensure the fund has sufficient cashflow to meet the minimum pension payments no later than 30 June 2024.
| Age | Percentage of account balance at 1 July 2023 |
| Under 65 | 4% |
| 65 – 74 | 5% |
| 75 – 79 | 6% |
| 80 – 84 | 7% |
| 85 – 89 | 9% |
| 90 – 94 | 11% |
| 95 or more | 14% |
23. Transition to Retirement Positions (“TTRs”)
Accessing super is not limited to only when one retires. An individual can access their super whilst continuing to work via a TTR, provided they have reached their preservation age. The minimum TTR Pension percentages have also reverted to the above standard rates and the maximum pension percentage remains unchanged at 10%.
24. Are there any other ways to access my super apart from retiring or waiting until age 65?
Yes, there are special circumstances in which super may be accessed including:
- Permanent incapacity
- Terminal illness
- Severe financial hardship
- Compassionate grounds
- Death
On behalf of the team at KSW and Premier SMSF Solutions we wish you and your families an enjoyable festive season and Happy New Year, and look forward to working with you in 2024.
Author: Anna Wong – Senior SMSF Manager at Premier SMSF Solutions
*Correct as of 20 December 2023
*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is for general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability is limited by a scheme approved under professional standards legislation.
