New laws will cancel your life insurance: Act Now
Generous tax benefits will go begging for millions of Australians who don't change their superannuation in the next couple of days.
And many will lose life insurance cover in their super if they don't contact their fund this week.
New rules mean the end of the 2018-19 financial year - just seven days away - requires super-urgent action.
Here are six things to consider right now.
The Federal Government's Protecting Your Super package starts on July 1 and will see an estimated three million people affected as new rules automatically switch off life insurance policies in super funds that have not received contributions in 16 months.
It's designed to stop unwanted insurance premiums eating into retirement savings. But a side effect is that those who need insurance but haven't contributed recently - perhaps after taking time off work to raise kids - may lose that protection and be unable to get it back.
Fixing this is simple. Contact your super fund, check my.gov.au to see if there are funds you've forgotten, and visit timetocheck.com.au for more information.
Got spare cash lying around? You can boost your super savings and claim a tax-deduction for it by pumping it into super this week.
These are known as concessional contributions, and rule changes in recent years mean almost any taxpayer can contribute at any time. There's an annual cap on these contributions of $25,000 a year, including employers' compulsory payments, but it delivers handy flexibility.
This clock is ticking loudly. The fund must receive your money by Friday, and many advisers recommend doing it before Tuesday. Electronic transfers are fastest - I made a BPAY contribution last week and it was in my super the following day - but don't bank on such a speedy turnaround.
Super savers can also contribute $100,000 a year of non-concessional contributions, where they don't claim a deduction. This works for pre-retirees who have perhaps sold an investment property and want to benefit from super's 0-15 per cent tax rate. Deadlines for these contributions are the same as concessional contributions, so act quickly.
If you earned below $52,697 this financial year, you can make a $1000 of non-concessional contribution to your fund and the government will add up to $500 to your balance. That's a 50 per cent return on investment.
People with a low-income spouse (earning $37,000 or less) can pump up to $3000 into their partner's super by Friday and receive an 18 per cent tax offset - which is worth up to $540. Nice.
July also sees the introduction of the new catch-up contribution rules, which allow people with less than $500,000 in super to make extra concessional contributions up to their previously-unused $25,000 annual cap.
So if $10,000 went into your super this financial year, next year you're allowed to put in $25,000 plus this year's unused $15,000.
However, don't jump the gun, as I almost stupidly did. The rules only apply to unused contributions starting from the 2018-19 financial year.