Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 254

The top seven EOFY superannuation tips

It has never been more important for your superannuation for you to get ahead of the game and understand the rules before the end of financial year rush.

A raft of new thresholds for superannuation kicked in on 1 July 2017, and not updating your super settings could be … catastrophic might be a little dramatic, but it wouldn’t be far off.

Proper preparation is essential. The good news is you still have time to fine tune things. No-one likes the end of financial year (EOFY) panic, so here are some of the more important ways to get the most from your super.

1. Adjust salary sacrifice arrangements

This should have been done before now. But if you haven’t made adjustments to the reduction in the concessional contribution (CC) limits from FY17 to $25,000 from $30,000 for the under-50s and $35,000 for the over-50s, then it might not be too late.

Find out how much in CCs you have put into super to date, then make immediate adjustments.

Where would the problem lie? If you are earning $110,000 a year and are receiving $10,450 in SG contributions, you might have had a salary sacrifice set at $1,625 a month (under 50s, $30,000) or $2,045 a month (over 50s, $35,000). If you haven’t made adjustments, you’re on course to break your CC limit by $5,000 or $10,000. But you might be able to cancel your last few salary sacrifice contributions to keep you under your limit or reduce how much you blow your cap by.

2. Use the new rules for extra CCs

If you haven’t salary sacrificed to this point, it’s not too late. From 1 July 2017, the ‘10% rule’ regarding employees was removed, allowing almost everyone to make contributions and get tax deductions (similarly to salary sacrifice arrangements) by putting money directly into your super fund in the lead up to 30 June, as a lump sum, or in parcels.

This is an important new way of equalising how people can get money into super, but don’t leave it right until the last minute. Contributions to super funds count for the year that they are received. If you send it on 28 or 29 June (30 June is a Saturday this year), particularly by BPay, there’s a chance it will not be received by the super fund until 3 July where it will count towards your FY19 contributions.

3. Make decisions on capital gains tax relief

If you had more than $1.6 million in pension or transition-to-retirement pension on 30 June 2017, then you were able to potentially take advantage of the CGT relief provisions to soften the blow of the new transfer benefit cap (TBC) of $1.6 million.

Those decisions need to be made soon, if they have not been made yet. It’s not a blanket decision to say ‘yes’ for your whole portfolio. It can be made asset by asset. There will be assets in most portfolios where you want to apply for the CGT relief, while other assets where you’re sitting on losses can be used for a future CGT loss to offset other gains.

It is a complex decision-making process, which might require evaluating each parcel of a particular share that you bought over an extended period. Don’t leave this complex work until too close to the deadline. Sit down with your adviser or accountant to work through this process soon.

And understand that you need to make these elections, which are irrevocable, before you put in your SMSF’s returns for FY17.

4. Make minimum pension payments before 30 June

An annual piece of advice: make sure that you make your minimum pension payment before 30 June. If you don’t, the ATO deems your super fund to have NOT been in pension mode for the whole financial year, meaning you’ll pay tax on income and gains for that period. And any payments will be considered super lump sums for both income tax and SIS Regulation purposes.

This would also mean starting a new pension the following financial year, which could have even broader implications, potentially also for pensions with benefits tied to social security.

5. Protect capital gains with CCs

Making concessional super contributions to help reduce capital gains tax is nothing new, except it is easier as a result of point 2 above. If you have made a capital gain, you can reduce your CGT (or more precisely, how much tax you have to pay for the entire year) by making CCs.

For example, if you have made a capital gain of $50,000 (reduced to $25,000 for assets held longer than a year) then a concessional contribution will generally reduce your taxable income and might allow you to pay less tax on your capital gain, particularly if it impacts on your marginal tax rate.

In any case, a $10,000 CC will save you tax of up $4,700, while you’ll pay a maximum of 23.5% on the capital gain itself.

6. Make the most of non-concessional contributions (NCC) rules

The annual limit for NCCs was dropped from $180,000 a year to $100,000 a year as of 1 July 2017. The other usual rules apply. You can make them up to age 65 with few restrictions, and you can use the pull forward rule to put in up to $300,000 in one year. But this will limit how much you can put in for the subsequent two years.

Come this time of year, it’s important to know the rules even more clearly. If you have enough money, you and your partner could get up to $800,000 into super (combined) in the next three months.

The pull-forward rule is only triggered if you put in more than $100,000 in a financial year. If you put in more than $100,000 (say $110,000) in the current financial year, then you are limited to putting in another $190,000 over the following two financial years.

But if you put in no more than $100,000 this financial year, then you can contribute, on 1 July 2018, $300,000, which would trigger the pull forward rules and maximise your contributions for the FY19, FY20 and FY21 years.

There are extra restrictions this year on making NCCs. If you already have more than $1.5 million in combined super, then you are limited to making $100,000 in NCCs. If you have between $1.4 million and $1.5 million, you are limited to putting in one year’s worth of NCCs, plus one year of pull forward. Only if you have less than $1.4 million in super can you use the maximum pull forward rules to put in $300,000 in one year.

7. Spouse super splitting

The imposition of the $1.6 million TBC has bought back the ‘spouse super split’ as a critical part of many couples’ financial planning. It didn’t matter previously if one member of a couple had a $10 million super balance and the other had diddly squat. Nothing was taxed, in anyone’s hands. But with the $1.6 million TBC, if you have more than $3.2 million in super and it’s unevenly split, you are literally donating extra to the ATO.

One way to even up super balances is ‘spouse super splitting’, or transferring your concessional contributions for one spouse to another (less the 15% contributions tax) after the end of a financial year.

How does that work? Let’s say one spouse has a large super balance and received the full $25,000 in CCs for the year. The partner has a small super balance and received nothing in CCs for the year. The partner with the higher contributions could use the spouse splitting rules to roll over $21,250 ($25,000 less 15% contributions tax) to the partner’s account. If this is done every year, it can go a long way to evening up super balances.

You only have until the end of the following financial year to do the spouse split. That is, for FY17, you will need to give super funds the instruction to do the spouse split rollover before 30 June 2018.

There are many more super hints available, but for this year, the above are the major new opportunities or numbers and limits you need to check.


Bruce Brammall is Managing Director of Bruce Brammall Financial Pty Ltd and Bruce Brammall Lending Pty Ltd. Bruce’s sixth book, Mortgages Made Easy, is available now. The information contained in this article is general and does not consider anyone’s specific circumstances. If you are considering strategies mentioned here, consult your adviser.


Leave a Comment:



A super new opportunity for EOFY 2018

Super changes, the Budget and 2021 versus 2022

How SMSF contribution reserving can use the higher caps


Most viewed in recent weeks

A tonic for turbulent times: my nine tips for investing

Investing is often portrayed as unapproachably complex. Can it be distilled into nine tips? An economist with 35 years of experience through numerous market cycles and events has given it a shot.

Rival standard for savings and incomes in retirement

A new standard argues the majority of Australians will never achieve the ASFA 'comfortable' level of retirement savings and it amounts to 'fearmongering' by vested interests. If comfortable is aspirational, so be it.

Dalio v Marks is common sense v uncommon sense

Billionaire fund manager standoff: Ray Dalio thinks investing is common sense and markets are simple, while Howard Marks says complex and convoluted 'second-level' thinking is needed for superior returns.

Welcome to Firstlinks Edition 467

Fund manager reports for last financial year are drifting into client mailboxes, and many of the results are disappointing. With some funds giving back their 2021 gains, why did they not reduce their exposure to hot stocks when faced with rising inflation and rates?

  • 21 July 2022

Welcome to Firstlinks Edition 466 with weekend update

Heard the word, cakeism? As in, 'having your cake and eating it too'. The Reserve Bank wants to simultaneously fight inflation by taking away spending power, while not driving the economy into a recession. If you want to help, stop buying stuff.

  • 14 July 2022

Welcome to Firstlinks Edition 465 with weekend update

Many thanks for the thousands of revealing comments in our survey on retirement experiences. We discuss the full results. And with the ASX200 down 10%, the US S&P500 off 20% and bond prices tanking, each investor faces the new financial year deciding whether to sit, sell or invest more.

  • 7 July 2022

Latest Updates

Financial planning

Five charts show predicaments facing financial advice

The number of financial advisers in Australia has almost halved at a time of greater need than ever. What has happened to the industry and its clients as yet another Quality of Advice Review takes place?


House price doomsayers: Could housing prices really fall by 20%?

Why do house prices move in an up-and-flat pattern rather than up-and-down like shares? When house prices start to fall, supply reduces to create a new equilibrium, rather than needing even more price reductions.

Latest from Morningstar

Why I’m not ready for an SMSF

SMSFs are increasing in popularity among younger investors, drawn by the investment control and fixed costs. But until a sufficient balance is achieved, it may be better to stay with a large fund.

Investment strategies

Six ways to take a ‘private equity’ approach in listed markets

By taking a private equity approach to investing in the public equity markets in this difficult market, investors can harness the 'best of both worlds' and still make superior returns over the long term.

Investment strategies

How to avoid being a bad investor

It's tough to become the 'best' investor in the world, but we can certainly avoid being the 'worst'. Here are graphical examples of some long-term principles to adopt, including the difficulty of timing the market.

Financial planning

The case for closing the financial gender gap

While the gender pay gap is slowly improving in the workplace, ATO data shows Australian men aged 55-59 average $50,000 more in super than women of the same age. Financial advisers have a role to play.


Three opportunities in property in Australia and APAC

Rising interest rates and occupancy threats have reduced the share prices of many property companies and trusts, but the selling underestimates the strong pockets of demand and robust earnings from good tenants.



© 2022 Morningstar, Inc. All rights reserved.

The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.