Managing Money

Superannuation Guarantee rate

According to Australian legislation employers are obliged to make a super contribution to a complying super fund on behalf of the employers.

Employers are obliged to make at least 4 super guarantee payments to the employee super fund each year.

These contributions are currently at 9 percent phased to be gradually increased to 12 percent. It started in 1988 when Paul Keating decided to give 3 percent national wage raise in the form of superannuation contribution paid by employers. Currently, the minimum percentage employer needs to contribute has raised to 9.5% and is expected to grow further in future.

The following is the table showing superannuation increase through the years.

Year	Percentage
1992-93	3 / 4
1993-94	3 / 5
1994-95	4 / 5
1995-96	5 / 6
1996-97	6
1997-98	6
1998-99	7
1999-2000	7
2000-01	8
2001-02	8
2002-13	9
2013-14	9.25
2014-21	9.5
2021-22	10
2022-23	10.5
2023-24	11
2024-25	11.5
2025-26 and subsequent years	12

The following people are not eligible for an employer super guarantee contribution

Employees whose are is less than 18 years
Employees who work less than 30 hours or fewer per week
Employees who earn less than $450 per month
Members of the Army, Navy or Air Force Reserve
Employees who earn less than $450 per month.

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How are superannuation Concessional Contributions Taxed under Australian law

Concessional superannuation contributions are the contributions paid with pre-tax money, such as employer and salary sacrifice contributions and personal contributions that you have or will claim for tax deductions.

Under Australian law, any person who is under 65 is allowed to make a contribution to his super account, and if you are under 65 years of age there is no employment test that needs to be satisfied.

In case if you have reached 65 years of age there are minimum hours of work criteria that needs to be met for the employee to do concessional contribution into his super.

This type also includes payments made by you or any voluntary salary sacrifice, they are taxed at 15%. There are caps on the concessional contributions you can make on each financial year’

When working out contributions for each financial year, contributions don’t count when the payment is sent, they only count once the payment is received in the super fund.

An employee can salary sacrifice some of their pre-tax salary (up to a cap amount) into a complying super fund and save paying income tax on the amount contributed.

Once you make a contribution you can’t withdraw it legally unless you satisfy release criteria.

The amount of concessional contribution into superannuation is capped each year if you exceed the capped limit, the excess amount is taxed up to 47%.

If you age is under 50 years for the taxable year the contribution is capped at $25,000, any contribution above that limit during a financial year is taxed up to 47%.

If your age is more than 50 years and your superannuation account balance is less than $500,000 then the contribution limit is raised to $50,000, the excess amount is taxed at 47%.

If your age is more than 50 years and your superannuation account balance is more than $500,000 then the contribution limit is raised to $25,000, the excess amount is taxed at 47%.

There is no limit on the amount that can be contributed by your employee or eligible contributors.

What is superannuation

Superannuation is an investment scheme, that’s been designed to accumulate wealth in working life and support you financially while you retire. The money comes from contributions made into your super fund by your employer or you and, ideally, and or topped up by your own money.

The sole purpose of this is that members are benefited when they intend to retire and all the dependent members are benefited in event of member’s death.

While it started in 1988, by 1992 all workers were covered by compulsory payment known as the superannuation Guarantee.

In 2007 itself all the superannuation fund of baby boomers is reaching $1 trillion, making Australian managed fund as the 3^rd largest fund.

When compulsory superannuation was introduced at this time, federal government was sending a clear message to everyone that they have to fund their own retirement.

To encourage participation, government has introduced number of tax concessions that may interest you.

Apart from compulsory contributions, people can choose to do personal contributions to boost up super for retirement. You have to note that once you made a contribution, you cannot legally touch the money until you satisfy the condition of release.

There is limit as to how much individuals can contribute to super in a given financial year, any additional contributions are taxed at normal taxation rules and can be taxed up to 47% depending on your income.

Superannuation investment returns are taxed at concessional rate if the funds are genuinely held to benefit members during their retirement.

Car Accident Not My Fault

A real life situation when you are not at fault in a car accident picture source

I didn’t have a great weekend, it was ok, could have been bad. My car was damaged on weekend in a parking lot. I have been to this shopping centre many times, actually almost every weekend. As I finish my shopping, sat in my car preparing to drive back home. The next thing I hear is a horn and bang. I got down with a bad feeling, I thought the whole back section of my car has disappeared, it was strong nudge preceded by a screeching sound.

It was a white Toyota Camry that hit the back of my car in an angle, puncturing through the bumper. At first I was surprised at the amount of damage my car has taken and that there were merely scratches to other one, I am not sure if it has to do with the car model, mine being Mazda or it was dependent on the angle and speed. Whatever might be the reason, my car was worst-off than his (at least I feel it that way), you can see the pictures below.

Claim history

I have been driving around in Australia for the past 15 years, never had an accident, it was something that I was always proud about and most bragged on (sometimes felt lucky as well). I guess this accident has taken that badge away. Most of the accidents can be avoided if we are present with our driving, some accidents like this can’t be avoided, they are meant to happen.

Whose fault was this car accident?

If involving in a car accident is not headache enough, having an accident with an idiot is adding salt to a wound. I was in that particular accident. There was a lady who was trying to take her car out of the parking lot and this person tried to swirl around the car to avoid collision and in turn ended up hitting my car.What would have been wise is first to stop the car and second going at a speed that is stoppable in parking lot.

I call him an idiot as he would totally disagree the fact that he was driving too fast in a parking lot and instead blames the lady for the cause of the accident. He was quite amateurish in dealing with situations like this, what he doesn’t understand is she is not in picture with the insurance company, as he didn’t touch her car, in situations where there is series of car accidents, cars bumped into one another on a freeway you can only claim insurance from the car owner whose car has touched you….