Cut off Dates:
With 30 June 2020 fast approaching, please see our summary of recommended cut off dates for concessional (tax deductible) superannuation contributions to be paid to superannuation funds and clearing houses. Making payment by these dates ought to ensure that your contributions hit the relevant super funds before Tuesday 30 June 2020, thereby maximising your tax deductions and preventing any potentials issues with contribution caps.
Please note a super contribution is not deemed to have been made for income tax deduction purposes until actually received by the fund (not the date you have made the payment to the fund or clearing house).
If you are paying via a Clearing House, you need to allow for the payment to be sent to and processed by member’s external funds. It is recommended you make each payment by 3pm, at least 5 business days before the due date (Wednesday 24 June 2020)
PAYMENT TYPE CUT OFF DATE
BPAY or direct credit payments Tuesday, 23 June 2020
Direct debit payments Wednesday, 24 June 2020
Contributions to a related-party SMSF COB Friday 26 June
Please note that some industry/retail super funds may have cut off dates earlier than this so it is important to check with each particular fund.
If you have a Self-Managed Superannuation Fund or an Industry/Retail Superannuation fund and have commenced Pension payments then you need to be sure the minimum pension amount is withdrawn from the superannuation fund before 30 June 2020.
What if a trustee fails to meet the minimum pension payment requirements under the Superannuation Industry Supervision (SIS) Regulations? – Where a fund fails to meet the minimum pension payment requirements in an income year, the super income stream will be taken to have ceased at the start of that income year for income tax purposes. The fund will therefore pay tax at the standard tax rate of 15% on all income rather than the Pension Rate of 0%.
Any pension payments you have made during the year will be treated as super lump sums for both income tax and SIS Regulations purposes.This is the case even if the member remains entitled to receive a payment from the fund for the pension under the governing rules.
If the relevant rules are again complied with in a following income year, this results in the commencement of a new pension. The trustee will need to revalue assets at market value and recalculate the minimum pension payment required at the start of the new pension.
To avoid having to pay 15% tax on the income and starting a new pension next year ensure you make the minimum pension payment before 30 June 2020.
If you have any questions, please don’t hesitate to reach out to the Waterford Accountants team.