Changes to Superannuation Contributions

Many of the changes announced in the May federal budget have now been passed by parliament.

Contribution limits have changed from 1/7/2017

Pre-Tax contributions will be limited to $25,000 for all taxpayers.

After- tax Contributions have been changed to $100,000 per annual. With the opportunity to bring forward 3 years of contributions, making it possible to contribute $300,000 in one year.

Restrictions do apply on these contributions so please speak to us at GNS Group before making contributions.


We can all be a little slow getting back into the swing of things after the New Year.

So just a little reminder of some important upcoming ATO due dates to help you while you transition from holiday mode to work mode.

December payroll tax – due Monday 16 January (Victoria – now overdue)

December quarter superannuation payments – due before Friday 27 January.

Pay and report ahead of time to avoid penalties.

The December quarterly GST/BAS returns are extended until 28 February.

New changes coming to Superannuation

SAVE THE DATE – TUESDAY 28th MARCH 2017 at 6pm.

GNS Group will be running a superannuation seminar on the changes.

With 30 June marking the final day of the old superannuation regime, you need to act now to make sure you’re compliant. The key changes include:

  1. Introducing a $1.6 million superannuation transfer balance cap
  2. $25,000 concessional superannuation contributions thresholds
  3. $100,000 non–concessional contributions cap
  4. Removing the 10 per cent rule impacting concessional contributions
  5. Allowing catch-up or carry forward concessional contributions
  6. Removing taxation concessions associated with transition to retirement pensions
  7. Lowering the income threshold for application of division 293 tax from $300,000 to $250,000

These are only some of the changes to super we will be covering in our upcoming seminar.

Please contact GNS Group to book a seat.

Superannuation Contributions and Work Test

If you are aged between 65 and 74, you must satisfy a ‘work test’ to make personal superannuation contributions. You may have heard the work test was to be abolished as part of other superannuation changes, but it has remained in place.

The ‘work test’ requires you to have worked a minimum of 40 hours of ‘gainful employment’ within 30 consecutive days. Investment income, voluntary or charity work do not qualify.
You also must have met the work test prior to making the contribution in the financial year.

If you have any questions as to whether you may have met the test, or how you might meet the test prior to the end of June 2017, please call us on 9499 7444.

SMSF Pension Draw downs

If you are taking a pension or income stream from your super fund, be sure you take the minimum amount out of the fund in cash prior to the end of June.
There are implications if you have not met the rules around your minimum pension for the year.

If you would like assistance understanding the rules regarding your minimum amount, or in working out whether you have already taken your minimum amount please call us ion 9499 7444.

Funding Retirement

Whether you have retired or are approaching retirement, thinking about where your money is going to come from once you stop work is an important consideration for us all.

The financial planners at GNS Group help clients to understand their options and how to map out the next chapter of their journey.

  1. Security – For most of us, the security of regular cashflow during our working career sets us up to become cashflow novices in retirement. Knowing that if I work, I get paid at the end of the week, and for most of us, it’s the same amount week in, week out. Predictable and dependable.

The same is not always true about retirement, particularly if you are self managed via a wrap account or have a SMSF. If you have a rental property, worrying if the tenant is paying their rent on time, if an emergency repair bill on a rental property is about to land in your lap or even paying the council rates and body corporate bills – It takes management and juggling.

When it comes to shares, and lets just look at Aussie shares, dividends are generally paid twice a year, but does this mean in retirement you can live like a king for 2 months of the year, and be on struggle street for 5 months in between as you wait for the next dividend injection.

 Throw in the juggling of term deposit dates, which are generally measured in months or years – the absence of weekly cashflow and the security that comes from it, can be more than unsettling.

2. Risk v Return – We all understand the general concept, but its amazing how many ‘smart’ people lose sight of this when chasing returns. Sure you might have a bit of luck and some early wins, but there is often little ‘luck’ when it comes to investing, but plenty of scams which offer high returns for low risk.

 And of course, we’ve heard it all before, “I have a mate who…”

 There are investment choices for everyone, so it doesn’t matter if you are conservative or an aggressive investor, there is a solution for everyone. But most importantly, know and understand what you are investing in.

Conservative investments such as bonds and term deposits generally offer returns between

2 – 5%pa. Growth based investments such as property and shares average around 10%pa, but volatility from negative 20% to positive 20% are very real possibilities.

 Too many investors might be conservative by nature, but want/need higher returns than say 3%, so the move significant portions of their investments into the share market hoping to get higher dividend income and returns, taking on additional risk, deviating from their long term plan and risk losing some of their capital when the share market takes it next drop. Not a smart move.

 3.  Diversification – Don’t have all your eggs in one basket. Not only does diversification significantly reduce your risk, it also gives you choices.

 Even the great Warren Buffet doesn’t have all of his money tied up in just shares. Spread your money around understand why.

(i). Cash and term deposits give ease of access for rainy day emergencies, they also provide for the opportunity to buy other investments when they are cheap.

(ii ). Bonds, both corporate and government, offer predictable and regular cashflow with low levels of volatility. They are great for smoothing returns from other growth assets

(iii). Property is great, and can be either direct or via an investment trust, and residential or commercial. Property does not always go up! We have seen some dud investment properties, but ultimately we need to live somewhere, and business are run from somewhere – choosing the right property is the key

(iv).  Shares provide the highest returns possible, but also the greatest amount of volatility. Share market performance is generally a predictor of future economic performance. Careful stock selection is important and spreading it around different industry sectors helps to avoid a concentrated portfolio of say just banks or miners.

4.  Property problems – We’ve seen many successful property investors, who might have accumulated a property or two, unable to live off the income these properties generate. Their wealth is tied up in lumpy assets such as bricks and mortar and they cannot unlock the cashflow they need for the lifestyle they want.

Two $1million properties in Melbourne are likely to generate $70,000 a year in rent. Take out the costs for the properties of $15,000 and you are back to $55,000pa before you potentially lose some more in tax.

If you need a new car, or want to go on that trip of a life time, you cant just sell off the garage to free up $40,000 – with property, its all or nothing. Often triggering the need to seel and pay capital gains tax just to get the cashflow you need.

Property is a great investment, it just shouldn’t be your only investment.

If you would like to understand what investment mix is best for you and your situation, please call a GNS Group Financial Planner. Melbourne or Australia wide, our clients are located right across the country and they have benefited from our experience and retirement solutions.