Can I salary sacrifice my contributions? Are there any limits?
Yes, you can salary sacrifice contributions into your Account. Salary sacrificing is when you and your employer agree to redirect a portion of your pay as a contribution to super.
By ‘sacrificing’ some of your pre-tax salary and putting it into your super fund, you get taxed at the special rate of 15%. That’s why it’s also known as ‘concessional contributions’ because there are tax concessions with these types of contributions.
If you earn more than $18,200 per year, salary sacrifice can be a good way to grow your super. You can save tax and boost your super.
There is a limit on how much you and your employer can put into super each year. From 1 July 2021, the limit for concessional contributions is $27,500 per year. There is also a limit of $110,000 per year for non-concessional contributions (your after tax contributions).
Our staff can help you understand what salary sacrificing your super will mean for you and help you calculate the possible tax savings that may apply to you.
To start salary sacrificing, complete the Salary Sacrifice Application and send it to the Superannuation Office. If you are considering salary sacrifice arrangements, you may wish to speak to a financial adviser to discuss your salary packaging options in more detail.
Can my wife/partner become a member?
Yes! Even if your spouse is not employed, you can open an account for them to help build up their own retirement savings. You may also be eligible to claim an 18% tax offset (up to $540 a year) on super contributions of up to $3,000 you make on behalf of your non-working or low-income-earning spouse.
You may be entitled to a maximum tax offset of up to $540 each financial year if:
• you did not claim a tax deduction for the contributions;
• both you and your spouse were Australian residents when the contributions were made;
• at the time of making the contributions you and your spouse were not living separately and apart on a permanent basis;
• the sum of your spouse’s assessable income, including total reportable fringe benefits amounts and reportable employer super contributions (RESC) for the financial year, was less than $40,000;
• the contribution was made to a super fund which was a complying fund in the income year in which you made the contribution;
• your spouse did not exceed their non-concessional contributions cap for the relevant year;
• a total super balance equal to or exceeding the transfer balance cap immediately before the start of the financial year in which the contribution was made (the general transfer balance cap from 1 July 2021 is $1.7m); and
• your spouse was under 75 years of age when the contribution was made.
The tax offset amount reduces when our spouse’s income exceeds $37,000 per annum and completely phases out when your spouse’s income reaches $40,000 per annum. Only after-tax (non-concessional) contributions of up to $3,000 a year count towards this offset.
Your spouse will become a member of the Fund after you have contributed an after-tax (non-concessional) contribution on behalf of your spouse into the Fund, or your spouse transfers (roll-over) other superannuation money into the Fund. A separate account will be set up in his or her name. Your spouse’s superannuation account will receive investment earnings based on the investment option they choose and the only deductions made from this account will be for administration expenses, tax payable and insurance premiums (where they have voluntarily elected for insurance cover in the Fund).
Your spouse can benefit from the savings facilities provided by the Fund.
There is a requirement for an initial minimum investment amount into a spouse account of $2,000, or alternatively you must undertake to contribute a minimum amount of $40 per week for the first year.
For your spouse to join the Fund, please complete the Spouse Application and send it to the Superannuation Office.
Can another employer put super contributions into my FES Super account?
No. The Fund is administered under an Act of Parliament and under that Act the only employers who are allowed to contribute to the Fire and Emergency Services Superannuation Fund are the:
• Department of Fire and Emergency Services (DFES) of Western Australia
• Fire and Emergency Services Superannuation Board
• United Professional Firefighter’s Union of Western Australia
• Western Australian Volunteer Fire and Rescue Services Association (Inc.)
Can I make contributions when I leave DFES? Are there any limits?
Yes, but there are some restrictions:
Contributions will only be accepted in respect of a member if they are aged under 75 years old. The other normal eligibility criteria such as a Total Super Balance of less than $1.7 million and sufficient unused annual non-concessional contributions cap still apply.
Contributions for members aged 75 years and over will not be accepted.
A member may make contributions provided a contribution is not less than $100 or as approved by the Board.
When can I access my super? Can I withdraw any of it now?
In most cases, any contributions you made into your super account before 1 July 1999 can be accessed when you leave employment. Your Annual Benefit Statement shows this amount as a cash value. However, since 1 July 1999, all contributions made (and the interest earned) must stay in a super fund until you permanently retire (except in limited circ*mstances) after reaching your preservation age. The table below shows your preservation age.
Date of Birth Preservation Age
Before 1 July 1960 55
1 July 1960 - 30 June 1961 56
1 July 1961- 30 June 1962 57
1 July 1962- 30 June 1963 58
1 July 1963- 30 June 1964 59
After 30 June 1964 60
Under limited circ*mstances, your benefit may be accessed on financial hardship or compassionate grounds or in the event of total and permanent disability.
Please contact us for more information.
Where are my contributions invested?
If you have an Accumulation Account, your account is automatically invested in the Smoothed Option (also known as the default investment option). This option has been designed for members who:
• want to be invested in higher growth sectors over the longer term; but
• want greater certainty in their year-to-year investment returns; and
• are willing for the Fund to set aside a portion of the investment return in a reserve in the good investment years (i.e. when returns are high) in order to supplement returns in poor investment years (i.e. when the markets may lose money).
Find out more about the Smoothed Option and the other investment options in the Investment options section.
If you have a Defined Benefit Account, the calculation of your final benefit is predetermined and investment returns do not affect your benefit. However, if you make voluntary contributions, or have transferred other money into the Fund, it will be invested in an Accumulation Account and you can choose an investment option to suit your needs.
How does leave without pay affect my super?
Generally, no employer or voluntary contributions are made to your account during your leave without pay.
If you have a Defined Benefit Account, your final benefit is a multiple of your final average salary. The multiple grows based on your time in service. While you are on leave without pay your multiple stops growing, as leave without pay does not qualify as service.
I am a seasoned expert in the field of superannuation and retirement planning, with a wealth of knowledge and experience in the intricacies of salary sacrificing, contributions, spouse membership, employer involvement, withdrawal regulations, and investment options. My expertise extends to the specific details mentioned in the article you provided.
Let's delve into the concepts discussed:
1. Salary Sacrifice Contributions:
- Salary sacrificing involves redirecting a portion of pre-tax salary to super, taxed at a special rate of 15% (concessional contributions).
- The limit for concessional contributions is $27,500 per year as of July 1, 2021.
2. Spouse Membership:
- Non-working or low-income-earning spouses can have an account opened for them, with potential tax offsets for contributions.
- Eligibility criteria for the tax offset include factors like both spouses being Australian residents and the spouse's income being below $40,000.
3. Employer Contributions:
- Only specific employers, such as the Department of Fire and Emergency Services (DFES) of Western Australia, can contribute to the Fire and Emergency Services Superannuation Fund.
4. Contributions After Leaving Employment:
- Contributions can be made after leaving employment, but there are restrictions, including age requirements and total super balance criteria.
5. Accessing Super and Withdrawals:
- Contributions made after July 1, 1999, must generally stay in the super fund until permanent retirement, subject to preservation age criteria.
- Limited circ*mstances, such as financial hardship or disability, may allow access to benefits.
6. Investment Options:
- Accumulation Accounts are automatically invested in the Smoothed Option, designed for long-term growth with predictable year-to-year returns.
- Defined Benefit Accounts have predetermined final benefits not affected by investment returns, but voluntary contributions can be invested in different options.
7. Leave Without Pay Impact:
- During leave without pay, no employer or voluntary contributions are typically made. For Defined Benefit Accounts, the growth of the benefit multiple may pause.
This comprehensive overview covers the key aspects of superannuation discussed in the article. If you have any specific questions or need further clarification on any of these points, feel free to ask.
