Crystal Wealth Newsroom
Superannuation talking points
Changes to super released by the Government
COVID-19 has had – and will continue to have – a major impact on the market, and as a result, we’ve seen significant volatility. In an attempt to rebalance, the Government has reduced the minimum annual payment by 50% for this financial year, and next.
This is of particular benefit if cash flow isn’t critical to you, as it provides the opportunity for your super balance to recover from the impact of COVID-19.
“It’s a good option to consider this financial year, and the next one too,” says Crystal Wealth Partners’ Louise Lakomy.
“Reducing the amount you withdraw from your super fund will enable it to recover.”
Early access to super
One of the Government’s stimulus packages in response to COVID-19 was the ability to access $10,000 of superannuation this financial year, and $10,000 next year.
This package has created a number of negative headlines, with the ‘true’ cost extrapolated over many years, however, Louise believes it can come in useful.
“In some instances, where that money is being used to pay off debt, then it’s good for the overall wealth,” she says.
“However, the ATO recently released figures showing that more than a third of people accessing their super early are under 30, and really it’s a last resort.”
Of course, if you’ve needed to access super early to navigate through the impact of COVID-19, it’s smart to have a plan in place to repay that money as quickly as possible.
The super downsizer contribution
If you’re aged 65 years or over, you can make an after-tax super deposit of up to $300,000 from the sale of your family home, if you’ve owned the property for at least ten years.
Couples can deposit $300,000 each, and contributions don’t count towards concessional or non-concessional contribution caps.
“If you’re planning to downsize, it’s something you should be aware of,” says Louise. “There’s no requirement to buy a new home, and there’s no work test or age limit.”
Superannuation co-contributions
Due to the impact of COVID-19, an increased number of people will likely be eligible for the Government’s super co-contribution scheme. This means that those who are earning between $38,564 and $53,564 per year can receive $500 from the Government for every $1000 they invest in their super account.
“It’s something a lot of people are unaware of,” says Louise, “but can be hugely beneficial. With the impact of COVID-19, many people may have dropped down into that threshold because they haven’t been earning as much income.”
There are some criteria for eligibility, including that the member must have made at least one contribution this financial year, must be aged under 71, and have a balance not exceeding $1.6m.
Preparing for the year ahead
Whatever your situation, long-term planning is key to maximising your super. Speak to Louise and the team at Crystal Wealth today to ensure you’re accessing everything you’re eligible for, and that your super is reaching its potential.