Clock ticking on salary sacrifice relief?
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Salary sacrificing into super may lose some of its tax effectiveness from July 1 next year, according to Macquarie Adviser Services head of technical services David Shirlow.
Shirlow said as part of the Government’s current review of Australia’s taxation system, there might be little time left to take advantage of the tax benefits of salary sacrificing. The Government proposes to revise the means testing of a range of tax benefits and offsets and, if certain measures included in the Government’s planned review are implemented, salary sacrificing into super will no longer be an effective way of retaining them.
As such, planners and clients must “act quickly to employ a concessional contribution strategy, such as salary sacrificing, while it can still be effective,” Shirlow said.
Shirlow pointed to the Government’s recently announced $1,000 one off payment (per child) for families who qualify for Family Tax Benefit Part A during the current financial year.
“For those on the threshold of qualifying for this benefit, an election to salary sacrifice even a modest amount into superannuation could make all the difference,” Shirlow said.
Shirlow said for many families, salary sacrificing can reap thousands of dollars worth of benefits and can also significantly influence the decision for one parent in a family to return to or remain in the workforce.
On the Government’s tax review proposals, Shirlow said it would be “interesting to see if the current review of the Australian tax system ultimately leads to further measures affecting marginal tax rates”.
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