Over the past week or so share markets have fallen sharply. In times like this your confidence in your investment strategy could be shaken. Do I sell? Do I do nothing? Is now a time to buy?

If you’re uncertain or worried about your super, we recommend you get financial advice. And what better way to do this than through AUSCOAL Advice. Whether you're already an AUSCOAL Advice client or new to financial advice, our financial advisers provide free advice over the phone about your super investments. Give us a call on 1300 AUSCOAL (1300 287 262), Monday to Friday, 8am to 6pm, to make an appointment with a financial adviser.

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This financial year, make sure you don’t become one of the ATO’s statistics.


What are the rules?
The government limits how much you can put into your super each year and still receive tax concessions. These limits are called contribution caps.

There are two types of contributions you can make to your super. How much you can put into your super account each year depends on the type of contribution you’re making.

• Before-tax contribution cap: $25,000 pa or $50,000 pa if you’re aged 50 or over. This amount will reduce to $25,000 pa for all ages from 2012. However, the government plans to retain the $50,000 pa cap for people aged 50 or over with less than $500,000 in super. This is money you put into your super before any tax is taken out. Before-tax contributions include compulsory 9% employer contributions and any salary sacrifice contributions your employer makes for you.
• After-tax contribution cap: $150,000 pa or $450,000 over three years if you’re under age 65. This is money you put into your super from your take home pay after your tax has been taken out or from other savings.

What happens if I put in more than the cap?
Before-tax contributions are taxed at 15%. Amounts exceeding the before-tax contribution cap attract an additional 31.5% tax, so you effectively end up paying 46.5% tax on the excess amount.

In addition, excess before-tax contributions count towards your after-tax contribution cap of $150,000 pa. If you exceed the after-tax contribution cap you’ll pay 31.5% tax on the excess amount.

A reprieve from the ATO
Up until now, if you’ve exceeded your contribution cap, even unknowingly, you were issued with an excess contribution tax bill. But this financial year the government has announced some flexibility for people who exceed their contribution cap for the first time.

If you exceed your before-tax contribution cap you can now ask for a one-off refund of up to $10,000. However, this doesn’t mean you no longer need to worry about exceeding the contribution caps. Remember:

• you can only get a refund once. If it happens again, you’ll need to pay the penalty tax
• this only applies to before-tax contributions. If you exceed your after-tax contribution cap, you’ll need to pay the penalty tax.

Please note this measure has not yet been passed into law.

How do I know if I’m exceeding my caps?
Unfortunately your super fund can’t monitor your contributions, because the caps apply to all contributions you make during the financial year, including those made to any other super funds you may have. While it’s difficult for us to monitor, we’ll try to assist you by letting you know if you're close to reaching your caps in your half yearly Member Statement.

This means it’s important to keep your own records of your total contributions. One of the easiest ways to do this is to check your pay slip for a running tally of your total super contributions. You can also keep track of how much you’ve contributed to AUSCOAL Super by logging in to your Member Account with your member number and password or give us a call.
 

More information and advice
For more information see our How much can you add to your super? fact sheet or give us a call. Our financial advisers can also provide you with free financial advice about contributing to your super. To book an appointment call 1300 AUSCOAL (1300 287 262), Monday to Friday, 8am to 6pm.

So what?
If you have lost super, you’re losing money. Not only are you paying multiple fees on multiple super accounts you don’t need, any amounts under $200 or classified as lost will be transferred to the Australian Taxation Office (ATO) and held in consolidated revenue.