While 30 June 2014 has come and gone without much pageantry, it heralded a change that should make individuals aiming to maximise their superannuation take notice.

From  1 July, there are changes to superannuation contribution limits which should trigger a review of your own contribution arrangements. The table below provides a summary of the new contribution limits that now apply:

For individuals under 49 years, the increased contribution limit means you can now salary sacrifice more into your superannuation fund without exceeding the contribution cap. While the obvious impact is more savings for your retirement, the bonus is the personal tax savings from taking this action. 

For someone earning $200,000 per annum, their marginal tax rate is 49% this year, as a result of the debt levy announced in the May 2014 Federal budget. The required Superannuation Guarantee contributions of 9.5% would be $19,000, leaving scope for an individual under 49 years to salary sacrifice up to $11,000 as additional super contributions from their pre-tax salary, without exceeding the contribution cap. The personal tax savings from such action would be $5,390 and the drop in “take home pay” of that person would be $5,610 rather than the full $11,000 sacrificed.  

The other major change is the increase to the Non-Concessional Contribution limit. If you are eligible to contribute and have money or financial assets in your own name, it might make financial sense to use the higher limits to boost personal savings for retirement, through making a Non-Concessional Contribution to superannuation.

As with all superannuation strategies, you should seek advice from an appropriately qualified professional before taking action, to ensure the strategy is right for your financial goals. If you think you may benefit from a review of your superannuation contribution arrangements, please contact one of our advisers.