Nick Bruining Q+A: Superannuation submission law for employers works against workers’ personal contributions

Question

I recently followed your advice regarding a check-up on my superannuation contributions recorded by the Australian Taxation Office and, I understand, it is based on information provided by my funds.

The myGov portal was excellent and revealed a great deal of information about my superannuation and other tax-related matters.

However, the report shows that a contribution made by my employer appeared in the system on July 26, 2023. This included the compulsory 10.5 per cent, but also three months worth of salary-sacrificed contributions that totalled nearly $10,000.

These contributions were made before June 30.

The issue is that I was planning on doing the same this year but I am now worried I might exceed the $27,500 contribution limit.

I can’t find a way of getting the payment backdated to when the contribution was actually made in the last financial year.

How do I go about notifying the ATO of the error?

Answer

I am sorry to tell you that it is unlikely to be an error. It simply highlights an issue that is not uncommon.

The current law surrounding employer superannuation contributions is not broadly understood.

While an employer must contribute (now) 11 per cent of your ordinary time earnings to super, the law stipulates that the contribution must only occur on a quarterly basis. In fact, the payment must occur with 28 days of the end of the quarter concerned.

Of course, it can be more frequently, but this is the minimum.

It is a problem that will not be corrected until July 2026 when new rules commence requiring contributions being forwarded to the fund immediately.

Given that the ATO shows that the payment was made on July 26, it looks like your employer has complied with the current rules.

Unfortunately, this quarterly requirement also extends to voluntary concessional contributions — or, in other words, your salary-sacrificed amounts. You may have also missed out on any earnings associated with the extra money in super.

You might want to raise the issue with your employer, or the easier solution might be to change the voluntary contribution arrangements.

Given that you can make a personal concessional (tax deductible) contribution to superannuation, you could cancel the salary sacrifice arrangements and simply make a manual contribution each payday, or a single lump-sum amount just before June 30.

Your superannuation fund will have an ATO “notice of intent to claim” form which you complete and send in once your contributions have been made. Alternatively, you can download the NAT 71121 form directly from the ATO website.

While you won’t get instant tax relief, when you lodge your tax return after June 30 your refund will hopefully be boosted by the tax saved through your personal concessional contribution.

As an added bonus — and if your affairs are relatively simple — you will be able to use the myGov portal to help you lodge your tax return as well.

This interactive service is very user friendly and you will find that almost all of the information needed to complete your tax return will be pre-filled already. Normally, all the information is in the ATO’s systems by the end of August or early September.

Question

I sold an investment property in Baldivis this financial year, which will make me a profit of about $50,000.

Many years ago, I sold some shares at a loss after the dotcom bust and have held a carryover loss of $74,000 for more than 20 years.

Can I use this loss against the profit on my property sale or can it only be used against profits made on shares?

Answer

While I am sorry to hear of this significant loss from many years ago, the good news is that yes, it can be applied against the gain on the property and is not quarantined on a like-for-like asset.

Be aware that this loss must be applied against the full profit of the sale. In other words, not after you have applied the 50 per cent discount after holding the asset for more than 12 months.

In your example, and assuming the $50,000 is the full profit, that amount is deducted from the $74,000 carryover loss meaning none of the profit will be taxable.

The remaining $24,000 loss stays in your ATO “account” to be applied on other future capital gains.

Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association