Question 1

My wife will retire soon with $300k in super. There is around $50k with long service and holiday accrual, which will be paid on the last day. She has $60k in concessional catch up. Can the final pay be put into super and therefore be taxed at 15 per cent?

Generally, not straight in, no.

The ATO states that a salary sacrifice arrangement has to be ‘effective’.

To be effective for lump sum annual and long service leave entitlements, a written agreement must be entered into prior to the annual or long leave accruing.

Therefore, unless that was already done, it’s probably too late now as the benefits would have accrued.

However, to get the same result, once your wife receives the funds, she can then make a super contribution up to her $60,000 concessional cap and claim a tax deduction on this amount.

The ATO provides instructions here.

Your super fund can also assist.

Don’t forget to take into account concessional contributions already made into your wife’s super, such as employer SG contributions, as they count towards the $60,000 cap.

Question 2

If you don’t own a home, instead you live in, say, a caravan or a boat, can these be classified as a “home” under Centrelink rules?

If you have a right or interest in a principal home and the right or interest in the home gives you reasonable security of tenure in the home, you are considered to be a homeowner.

The home does not have to be a permanent fixture on land. For example, a person living in a houseboat with reasonable security of tenure can be a homeowner.

Similarly living in your caravan also applies.

In what is a bit of a quirk, even though you are considered a homeowner in the above scenarios, you may also be eligible for rent assistance.

Rent assistance can be received for fees payable regularly as a condition of occupying your home, e.g. fees for the use of a caravan site either in a caravan park or through a private arrangement.

Question 3

Hi Craig  I’m 72 y.o. and retired. If I sell my investment property, could I contribute the proceeds to my superannuation under the downsizing rules? Any issues re tax etc. Thank you. Emie

Hi Emie,

Yes, so long as you are 55 or over you can make a downsizer contribution to super, provided other eligibility requirements are met.

There is no maximum age.

There are no tax issues/liabilities on contributing the funds to super.

However, you have stated it’s an investment property.

To qualify for a downsizer super contribution, it must have been owned for at least 10 years and your primary residence for at least a part of the time you have owned it.

It does not qualify if it has never been your primary residence.

The investment property may have Capital Gains Tax (CGT) implications on sale, so I would suggest seeking advice.

Craig Sankey is a licensed financial adviser and head of Technical Services and Advice Enablement at Industry Fund Services.

Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.

Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives.

– TND