The benefits of claiming for super

For our Aussie readers, learn how it may be possible to claim a tax deduction on your superannuation contributions.

As financial experts (such as those at Super Claims Australia) know, claiming deductions for superannuation contributions can deliver benefits. It is well worth finding out what you may be entitled to, as some benefits of claiming super can be overlooked.

Personal super contributions

If you are not an employee, or make only a small proportion of your income from work undertaken as an employee, it may be possible for you to claim a tax deduction for voluntary contributions to your own super.

What does it mean to ‘not be an employee’ though? You may be eligible for claiming these tax deductions if your income is derived from self-employment, investments, government pensions or allowances, superannuation, partnerships or trust distributions, or a foreign source.

Are you eligible?

Before progressing any further, you should determine your eligibility to claim a deduction. You qualify for a deduction if:

• You have made personal contributions to a complying super fund. Alternatively, if you made contributions to a complying retirement savings account (RSA), you are also eligible.
• Your earnings as an employee do not exceed that maximum amount permitted.
• You satisfy conditions relating to age.
• You have provided written advice to your superannuation fund of the provider of your RSA, letting them know of your intention to claim as a deduction.
• You have received acknowledgement from your RSA or superannuation fund of your intention to claim a deduction.

Are you within the age restrictions?

If you are aged 75 years or older, it is only possible to claim a deduction on the contributions that you made in advance of the 28th day of the month that follows the month in which you had your 75th birthday.

If you were yet to celebrate your 18th birthday at the end of the financial year in which you voluntarily contributed to your super, a deduction for your personal super contributions is only possible if you also received an income as an employee or operator of a business during that same year.

Key benefits

If you are eligible and do claim a deduction, a range of benefits are possible:

1) Tax will not need to be paid on the income that you contribute to your super. As your tax return is completed, your taxable income will be reduced by these deductions and, ultimately, you will pay less tax.

2) The personal super contributions that are claimed as a tax deduction are factored into the assessable income of your fund and correspondingly taxed at the rate of 15 per cent. This amount will be withheld from your super account by your super fund.

3) Depending on the amount of the personal contribution for which you claim a deduction, you may receive a low-income super contribution on the amount claimed. This will be paid by the government. If this applies to you, you will not also be eligible for a super co-contribution on that amount.

The best advice is to seek the support of your accountant or financial adviser to ensure that you claim all of the deductions to which you are entitled for personal contributions made to your superannuation.