Working mums receive super boost
Working mums will have the opportunity to boost their super thanks to contribution rules which came into play for the 2019/20 tax year.
The five year carry forward rule would mean someone returning to work who hasn’t made super contributions for the year just ended would be able to take advantage of the allowable contribution limits as well as the unused limit for the previous year.
It would also help those women who were approaching retirement.
Access to catch up contributions were only allowed if you have less than $500,000 in super and the normal annual limit for tax-deductible concessional contributions is $25,000 and must allow for employers Super Guarantee within that limit.
Head of advice at Dixon Advisory, Nerida Cole, said: “This new rule will allow more flexibility to ‘catch up’ on contributions on those lost super years.
“It means you are able to back pay into your super, which is especially important to mothers as they return to work and women as they prepare for retirement. Women continue to face significant challenges in achieving financial security as they retire from the workforce and retire with almost 50 per cent less in super than men.”
She advised women should only make the extra contributions if they had already checked they had sufficient cash reserves, had cleared all credit and high interest debt and did not need to pay down more of their mortgage.
AUTHOR
Laura Dew
Recommended for you
Licensing regulation should prioritise consumer outcomes over institutional convenience, according to Assured Support, and the compliance firm has suggested an alternative framework to the “licensed and self-licensed” model.
The chair of the Platinum Capital listed investment company admits the vehicle “is at a crossroads” in its 31-year history, with both L1 Capital and Wilson Asset Management bidding to take over its investment management.
AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies.
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
