Smart.Happy.Money 14: Planning on making super contributions this financial year?

As we move into the start of the fourth quarter of the financial year, it is timely that we turn our mind to tax planning and the things we need to be considering as 30 June looms ahead.

Firstly, you need to be very mindful of the correct timing of superannuation contributions. Every year we hear stories of people who made contributions to super, only to find out – too late – their contribution wasn’t made in time.

You would think that in this modern age of electronic transactions, making a super contribution by way of electronic transfer or BPAY would be pretty straightforward. Sadly, that is not the case.

Getting the timing of contributions right can be a real case of ‘hit and miss’, particularly if contributions aren’t being made until close to the end of the financial year.

Let’s assume that I plan to make a personal contribution to super. On top of that, I intend to claim a tax deduction for my contribution in the current financial year.

Being like most people, I will leave it to the very last minute and on 29 June I will go online and transfer the contribution from my bank account to my super fund. I will use their BPAY code for the payment.

It is all so simple – what could possibly go wrong?

Well, unfortunately, there is a number of things that could cause my plans to be derailed.

1. When making a super contribution by way of electronic funds transfer, the contribution is not deemed to be made until it appears in my super fund’s bank account. If I initiate the transfer on 29 June 2018 (a Friday), it may not appear in my super fund’s bank account until early in the following week – around 2 or 3 July.

2. As my contribution was not technically received by my super fund until early July, it is unlikely I will be able to claim a tax deduction for my contribution until the 2018-19 financial year. This may result in me paying more tax than planned this year.

3. My contribution will be counted against my contribution cap for the 2018-19 financial year. While this may generally be fine, it can create an undesirable outcome if I have also planned to maximise my contributions in the 2018-19 year.

4. What if I have turned 65 in the 2017-18 financial year and had retired at some point during the year. As I am now 65, I will need to meet the work test (be gainfully employed for at least 40 hours worked within a period of 30 consecutive days) for my super fund to be able to accept my (2018-19) contribution. Being ‘employed’ by my kids to do some home maintenance or baby-sitting for them is unlikely to meet the test!

5. Even if I wasn’t intending to claim a tax deduction for my contributions, but instead I wanted to maximise my non-concessional contributions, not having made my 2017-18 contribution in time will have similar ramifications, particularly where I intended to maximise contributions both this year and next.

Making contributions on time is so important when looking to maximise contributions, make contributions while we are still able, and being able to claim a personal tax deduction.

As 30 June falls on a Saturday this year, planning ahead is so important.

Where possible make your super contributions early so there is plenty of time for it to be received. Sadly, we have seen cases where contributions made at the last minute to the wrong BPAY number have resulted in the contribution not being received by the super fund in time.

BGN Financial Management Pty Ltd is a Corporate Authorised Representative 468796 of Professional Investment Services Pty Ltd AFSL 234951 ABN 11 074 608 558

The information in this communication has been prepared on a general advice basis only. The advice has been prepared without taking account of your specific objectives, financial situation or needs. Accordingly, you should, before acting on the advice, consider the appropriateness of the advice having regard to your objectives, financial situation and needs. In cases where the advice relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a Product Disclosure Statement (or other relevant information statement) and consider such document before you make any decision about whether or not to acquire the product. For these reasons, it is imperative that you seek advice from your financial adviser before making any investment decisions.

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BGN Financial Management PTY LTD is a corporate authorised representative (468796) of Professional Investment Services Pty Ltd (ABN 11 074 608 558)

which is the holder of Australian Financial Services License No.234951.

The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Professional Investment Services Pty Ltd (PIS) Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither PIS nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information. By entering your details to this website you are agreeing to be added to the BGN Financial Management contact list and will receive, from time to time, newsletters, updates and invites to events etc.  You can opt out at any time by emailing

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