With the end of financial year in sight, its time to review your SMSF clients to ensure they maximise any planning opportunities and avoid any costly mistakes

Here is is our annual checklist to ensure you are on top of your SMSF clients coming into the new financial year


Retirement Phase Pensions

A minimum pension must be paid annually. The pension must be paid in cash and clearly be shown on the funds bank statements on or before 30 June each year.

This will ensure that the pension payment standards are met meaning you can claim a tax exempt current pension income (ECPI) deduction in respect of the proportion of income earned on retirement phase pensions

Transition to Retirement Pensions (TRIS)

Payments of transition to retirement income streams have a 10% maximum capped amount on amounts that can be paid. Earnings on TRIS are not tax exempt.
Any members receiving a TRIS who turned 65 during the financial year will be able to convert into the retirement phase pension and claim ECPI on the income related to the retirement pension

Members with Maximum Pension Transfer Balance

For members at  or near their Maximum Pension account limit, amounts greater than the minimum pension could be paid as lump sums from accumulation.  This may be advantageous to increase the tax exempt ECPI %
Alternatively, if treated as a partial commutation from pensions this would reduce the member maximum transfer balance amount allowing room to increase pension assets in the future.

members must have clear written instructions in place with the trustee on how to allocate payments taken in excess of the minimum and this must be in place prior to the payment being made.

SuperNova can provide the necessary documentation to enable this process

Reduced Pension Drawdown

 The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for the 2019-20 and 2020-21 income years. 

This measure will benefit retirees with account-based pensions and similar products by reducing the need to sell investment assets to fund minimum drawdown requirements.

The reduction applies for the 2019-20 and 2020-21 income years. 


Default minimum drawdown rates (%)

Reduced % for 2021-22

Under 65


















95 or more



 To receive the favourable tax treatment, minimum pensions must be physically paid in cash by 30 June and show as withdrawals from the fund bank statements

Consider the impact of the $1.7 million limit on the amount of funds that can be held in the retirement phase of a taxed fund to support an account-based pension. Consider referring your client to an appropriately licensed financial adviser if a client is intending to enter into the retirement phase of the fund to ensure that the client’s personal transfer balance cap does not exceed the prevailing $1.7 million general transfer balance cap or where they require general retirement financial planning advice.

Key points

·       50% reduction in pensions drawdown rates in 2021-22 and 2022-23

·       All pension and lump sum requests and acceptance should be documented

·       Ensure pensions are physically paid in cash from the fund account by 30 June


Ensure superannuation contributions are actually paid by year end and meet all required conditions for deductibility.


Where an employer makes contributions in respect of an eligible employee a deduction will only be available where the employee is engaged in producing the employer’s assessable income, the contribution has been made to a complying superannuation fund or retirement savings account and, where the employee has turned 75, the contribution has been made on or before the 28th day after the end of the month in which the employee turned 75.

An individual will also be entitled to a deduction for personal superannuation contributions provided such contributions are made to a complying superannuation fund, the contributions are made on or before the 28th day after the end of the month in which that person turns 75, and that person provides a notice to their fund of their intention to claim a deduction for those personal superannuation contributions. Such a deduction is available to both self-employed individuals as well as employees seeking to make additional superannuation contributions in addition to those made by their employer. However, any such personal superannuation contribution cannot create or increase a tax loss under section 26-55 of the ITAA 1997.       

Both employees and self-employed persons are subject to a cap on such concessional contributions (i.e. deductible contributions) which is $27,500 for each individual regardless of their age for the year ended 30 June 2022.

You should consult an appropriately licensed financial adviser to consider the merits of maximising concessional superannuation contributions by 30 June 2022 if the cap has not been fully utilised for that year. Care should be taken to include employer contributions made for superannuation contribution purposes in any calculation of deductible superannuation contributions that should be made by year end to ensure that the $27,500 cap is not exceeded.   

Excess Contributions

Division 293 imposes an additional 15% tax on concessional contributions where the combined total of the individual’s adjusted taxable income and low tax contributions exceed $250,000 for the year ended 30 June 2022. In this context adjusted taxable income for Division 293 purposes is the aggregate of income for Medicare levy surcharge purposes (other than reportable superannuation contributions), and low tax contributions means concessional contributions up to the amount of the prevailing concessional contributions cap in the relevant year.          

Contribution Limits and caps

Consider the limits that apply to the making of concessional and non-concessional contributions for the year ended 30 June 2022:
• the cap on concessional contributions for the 2022 year is $27,500 for each individual regardless of age
• the annual cap on non-concessional contributions for the 2022 year is $110,000. However, an individual can only make non-concessional contributions if that individual’s total superannuation balance was less than $1.7 million (plus indexation if applicable) as at 30 June 2022 (see section 292-85(2) of the ITAA 1997).

The amount of non-concessional contributions that a person aged under 67 can bring forward under the three-year rule is capped at $330,000 for the 2022 year (subject to certain transitional arrangements). Such a contribution can likewise only be made where the individual’s total superannuation balance was less than $1.7 million as at 30 June 2022 . You should consult an appropriately licensed financial adviser to consider the merits of making any additional concessional or non-concessional contributions for the 2022 year.

Downsizer Contributions

Section 292-102 of the ITAA 1997 allows individuals aged 65 or over to make additional non-concessional contributions of up to $300,000 per individual from the capital proceeds on the sale of the ownership interest in a main residence held by the individual (or their spouse or former spouse) from 1 July 2020 which will be excluded from the broader non-concessional contributions cap. It was announced in the 2021-22 Federal Budget that the eligible age for the downsizer contribution will decrease from 65 to 60 years old from 1 July 2022.

Care should be taken to ensure that all the eligibility conditions to make a downsizer contribution are satisfied.

CGT Small Business Exemption

The CGT cap excludes exempt capital gains of up to $1,615,000 under the CGT small business 15-year exemption and the CGT small business retirement exemption from being included in an individual’s cap on non-concessional contributions for the year ended 30 June 2022.

First Home Super Saver

Consider the merits of withdrawing superannuation contributions to help finance a first home deposit under the First Home Super Saver (FHSS) scheme. The scheme allows an individual to make additional voluntary superannuation contributions or after-tax contributions to a complying superannuation fund from 1 July 2017 of up to $50,000, which can be withdrawn to help finance a first home deposit starting from 1 July 2018.
The scheme provides that 85% of concessional contributions can be withdrawn together with any associated earnings as a FHSS released amount, which is then in aggregate included in the individual’s assessable income and subject to a 30% non-refundable tax offset. Eligibility conditions need to be satisfied before an individual can access the scheme.

Government Co-Contribution & Low Income Super Offset

Check whether the taxpayer is entitled to the Federal Government’s superannuation co-contribution for personal after-tax contributions made up to $500, or the $500 low-income superannuation offset.
Individuals will not be eligible for the government co-contribution if their non-concessional contributions exceeded the non-concessional contributions cap for the year, or if their ‘total superannuation balance’ was equal to or more than the $1.7 million general transfer balance cap as at 30 June 2022.

Low Income Spouse Super Tax Offset

Consider whether the individual would be entitled to the low-income spouse superannuation tax offset. A taxpayer may be entitled to an 18% tax offset of up to $540 where there the taxpayer makes superannuation contributions of up to $3,000 in respect of a low-income spouse whose income does not exceed $37,000. In this context, a spouse’s ’income’ comprises the total of the spouse’s assessable income, reportable fringe benefit amounts and reportable employer contributions. The offset will be gradually phased out so that no offset is available where the spouse’s income is $40,000 or more.
However, the offset will not be available where the spouse’s non-concessional contributions exceed the annual non-concessional contributions cap for the 2022 year, or where the spouse’s total superannuation balance exceeds the general transfer balance cap of $1.7 million as at 30 June 2022.


Key points

·       Review your member year to date contributions to see any potential issues or opportunities

·       take advantage of any of the above contribution strategies

·       Ensure contributions are physically received in the fund bank account and show in the bank statement by 30 June


Investment Strategy 

investment strategies are coming under more attention by auditors. It is no longer acceptable to have a generic document that covers all and any situation. Investment strategies should be one of the key “living” documents of a fund as this demonstrates the trustees vision and decision-making. Should a trustee who doesn’t understand how to formulate an investment strategy be allowes to invest large sums of money

In addition COVID-19 has had a significant effect on markets worldwide, and this is likely to continue for a number of years to come. It is worth taking the time to consider how your fund’s investments and cash flow will be affected to pay fund administrative expenses, pension payments or tax etc

Where fund assets are predominantly in one asset class (eg Real estate) auditors will need to see documentary evidence that you understand and have a management plan around the additional risks this create

SuperNova can provide you with an auditor approved investment strategy template that can be customised to each funds circumstances

Key points

·       Review and update your investment strategy regularly. At least once a year and more often during economic uncertainty

·       All significant investment decisions  – eg the purchase of a real estate property should be documented and refer to meeting the objectives of the strategy

·       Be aware of the risks of the documented strategy and how these can be mitigated

·       Treat the strategy as an important living document – not as an audit requirement.


Investment Valuations

 As a generally rule auditors will require properties to be formally independently valued once every 3 years and accept a trustee valuation in the interim. However this assumes a stable economy and market. With the potential impact of COVID-19 on the property market it would be prudent for trustees to have a valuation at 30 June 2020 in any case due to the potential abnormal changes in value

Supernova can provide online valuations and trustee document to accept the valuation to meet the audit requirement. Exception is commercial properties and certain properties where there is insufficient comparative sales data

Key points

·       have properties independently valued at least every 3 years

·       supported with a trustee minute confirming this

Trust Deed

There have been significant changes to superannuation since 2007, which may or may not be expressly provided for in the fund’s deed. In some cases, a trust deed specifically details what is allowable (outside of SIS legislation), especially in relation to binding death benefit nominations,

It is generally recommended trustees update the fund’s trust deed every 5-7 years, so it remains up to date and relevant to its members.

Key Points

Review the fund’s current trust deed and consider updating it

SuperNova can arrange for your fund deed to be updated – simply by providing some basic information. For existing SuperNova clients you simply need to confirm the details we have on file

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this p