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Hoping for a bit of tax time relief from the cost-of-living crunch? Incoming Government tax cuts may ease the squeeze a little, but a leading superannuation expert warns many seniors may be leaving thousands of dollars on the table.
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Aware Super general manager of advice and guidance Peter Hogg is urging Australians to check their eligibility for a number of government super incentives which could provide a significant boost to retirement savings.
"These incentives are there to be used by every eligible Australian, but they often come with particular conditions, and if you don't tick all the right boxes you can miss out on potentially thousands of dollars," he said.
"This tax time I'd encourage every Australian to look into which incentives could apply to you and ensure you're not missing out on incentives you're entitled to."
So what are these incentives, and how do they work?
Super government co-contributions
This incentive is ideal for part time workers who are transitioning to retirement, or those who are returning to the workforce and applies to those earning $58,445 or less annually.
Under this incentive, the government will contribute up to 50 cents to each dollar for contributions ranging from $20-$1000.
The 50 per cent rate applies to those who earnt less than $43,445 before tax during the financial year, with the entitlement gradually reducing as income rises.
To access the incentive, login to your super account and collect your BPAY details in order to transfer the money you want to contribute. The ATO will calculate your eligibility once your return has been lodged and automatically transfer any entitlement into your super account.
If you do your own tax return, make sure you tick the 'have made a contribution' box to kick the process off, make sure your tax file number is linked to your super fund account and don't forget to do it by the financial year cutoff date of June 25
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Downsizer contributions
Those who are planning on selling the family home could make some quality savings through super contributions.
Those who are already drawing down on their super can make tax free super contributions of up to $300,000 for singles and up to $600,000 for couples.
Those who are 55 or older and have owned the family home for at least ten years will qualify for this incentive if they make a contribution to their super within 90 days of the change in ownership. The home must be either a current or former primary residence to meet eligibility criteria.
If you are receiving the pension or other income support payments, make sure to check with your financial adviser or super fund to see if they could be impacted by taking this option.
Low income super tax offset
Low income earners can trigger an automatic refund of the 15 per cent tax paid on their super through this incentive.
Those earning less than $37,000 can access refunds of up to $500, with the money to go straight into their super account.
To be eligible, you or your employer must have been making before-tax contributions to a complying super fund throughout the year, and you must not have held a temporary resident visa at any time during the income year.
To access the incentive, check that your super fund has your tax file number.. If your number has been provided, your super fund will accept a payment based on your tax return and information from your fund.
If you've made a contribution but don't need to lodge a tax return, the ATO will determine your eligibility using information from your super fund and will make a payment directly into your super account.
If you've reached preservation age and have retired, you can choose whether the money goes to your super fund or directly to your bank account.
For more information contact your super provider.