The Law Handbook 2024

410 Section 5: Managing your money also be split with (i.e. given to) a spouse – as long as the spouse is under 65 years old, or if they are over their preservation age, they are still working. Low-earning spouse Taxpayers can claim a tax offset of up to $540 for contributions made on behalf of their spouse who is aged 75 or under with an income of less than $40000. This is the case unless the spouse has a total superannuation balance of $1.9 million (or less if the person’s super balance cap is less) (ignoring investment gains and losses) or more. If the spouse is aged 67 or older, a work test must be met. Small and inactive accounts Fees on superannuation accounts with a balance less than $6000 are limited to three per cent. If a superannuation account has been inactive for 16 months, insurance on that account is cancelled. Age restrictions The following age restrictions apply to superannuation contributions: • Before the age of 67 , a person can make conces- sional contributions even if they are not working. • Between the ages of 67 and 75 , a person can make concessional contributions, so long as they work for at least 40 hours in a period of 30 consecutive days – this is the ‘work test’. • Between the ages of 67 and 74 , a person whose total superannuation balance is less than $300000 can make concessional contributions for the first year they no longer meet the work test. Before the age of 75, up to $110 000 per year may be contributed on a non-concessional basis. The above is subject to other restrictions, such as the amount of total superannuation balance. There is no obligation to draw down monies from a superannuation fund at any age. However, not taking a pension when one is available means the loss of the potential benefit that a fund paying a pension is not taxed on its investment returns. Eligible termination payments Most eligible termination payments (known as ‘employment termination payments’) cannot be rolled over into superannuation. Lost superannuation When a worker changes jobs, they may be required to join a different superannuation fund. It is important that the money in the previous fund is not forgotten. The money can be moved or ‘rolled over’ to the new fund. The ATO keeps a register of ‘lost’ money. Contact the ATO if you think you have lost track of superannuation money (see ‘Contacts’ at the end of this chapter). An alternative for people who have many small jobs is to start a ‘retirement savings account’ with a financial institution, into which all employers can pay small amounts of superannuation. Switching superannuation funds There are no exit fees when a person switches from one superannuation fund to another. Superannuation guarantee charge If employers do not contribute 11 per cent as described above, a ‘superannuation guarantee charge’ has to be paid to the ATO, which then contributes the net amount to superannuation to benefit the employee. This is calculated against an employee’s ‘salary or wages’, which may be more than the employee’s ordinary time earnings. See Superannuation Guar- antee Ruling SGR 2009/2, available on the ATO website (at www.ato.gov.au/law) . The charge is only payable in respect of employees, not contractors. Difficult questions arise about whether a person is a contractor. For example, the High Court has found that a bicycle courier employed as a contractor was an employee, but a motor vehicle courier was a contractor. If a contractor is paid mainly for their labour, super may be payable. The ATO website (www.ato.gov.au) has an ‘employee/contractor decision’ tool to help work out if a person is an employee or a contractor. The employer should pay superannuation guarantee contributions at least once each quarter, on 28 October, 28 January, 28 April and 28 July in each year. The employee should be notified on a pay slip, letter or email. If these amounts are not paid, then the employee could be disadvantaged if the company becomes insolvent. If notification is not received at the appropriate time, contact the