EOFY, end of financial year, Age Pension changes

Bumper end of financial year update:

What you need to know and do before 30 June

With just six weeks to go to the end of the financial year, it’s a great time to review the things you can do to ensure you are using tax, super and Age Pension rules to your own best advantage. Today we look at three ways you can benefit from knowing how the financial year has a bearing on the things you can do and how this can save you money – sometimes a lot! There’s still time to make decisions and implement them before 30 June, so let’s consider some end of financial year implications across super, retirement planning and Age Pension gifting.

Super contributions

As you are aware there are caps on how much you can contribute to your super. We’ve covered these rules in more detail previously. The beginning of a new financial year is a great time to review your cash holdings and how they might be used to significantly reduce your tax. 

Retirement Essentials financial adviser, Nicole, has recently worked with more than a few clients who are planning on retiring within five years or less and could make the most of relevant tax rules right now.

Often pre-retirees keep a significant amount in cash. It’s not an issue, but it’s also not always the best strategy. Here’s how Nicole helped Suzanne and John rethink their pre-30 June actions.

John works part-time as a relief teacher, earning $45,000 per annum. He has $220,000 in super. Suzanne works full-time in health services, earning $80,000 per annum, but with a smaller super balance of $160,000 They have another $100,000 invested in a fixed term cash account. They plan to retire in three to five years and hope to spend three months heading across the Nullarbor to the Kimberley, but were unsure how they might afford this. When Nicole asked whether they could salary sacrifice, neither Suzanne nor John felt they could make this form of contribution. She then pointed out that the cash component of their assets was adding to their taxable income. Using ‘Bring Forward’ rules they would be able to contribute an extra $30,000 each year (to Suzanne’s super) over a three-year period, reducing their cash, but also Suzanne’s tax. If fact, Suzanne would have $6125 less net tax, and an actual benefit of about $11,000 per year over all. The goal of retiring in three years just got real – and an extended break was more affordable with the $33,000 in savings.

Did you know that …?

You can find out how much you are eligible to carry forward simply by checking in your myGov account? 

Planning to retire in next 12 months?

If you have plans to step back from full-time work in the next year, then there are a lot of pre-30 June decisions to be made. Here are some of the top level choices that you may be facing:

  • Will you qualify for an Age Pension? Counting yourself in or out will affect most of your money decisions. Even if you are still a few months out, checking your eligibility will enable you to focus on either the finer points of Age Pension assessments or the strategies available to those who are self-funded. 
  • Moving more money into super We’ve looked at this in more detail under the ‘super contributions’ example above, but this strategy is just one of the many ways you might choose to increase your super balance in a tax-favourable manner. How you time such contributions pre and post-1 July can make a significant difference, depending upon whether the contributions are salary sacrifice, after tax, or using ‘Bring Forward’ or ‘Downsizing’ options.
  • Understanding how ‘younger spouse’ rules work This strategy can enable an older spouse to receive benefits by moving super into a partner’s (accumulation) account. How you treat your assets matters a lot. This made a material difference in the case of Natalie and Vijay as we explained in a recent article. Using this strategy meant Natalie qualified for an Age Pension even though, at the outset, the couple felt their assets were well over the threshold. Qualifying for the Age Pension brings extra benefits including significant savings through the automatically awarded Pension Concession Card.
  • Timing leave entitlements. This can be quite complex, but depending upon whether you take leave entitlements as a lump sum or as deferred salary can have sizeable tax implications. 

Gifting, loans and the Age Pension

We’ve covered the rules on gifting and the Age Pension in detail previously, so here’s a link to assist if you’d like a quick refresher. Briefly, if you are on an Age Pension (or hope to qualify in the near future), it’s important to understand that simply giving or loaning money is not necessarily going to help reduce your assets in order to be eligible. Funds which are gifted are restricted to $10,000 in any one year, or $30,000 over five years. Amounts above this will be assessed as an asset. So understanding where you are in the five-year gifting ‘cycle’ is very important.

Or if your plans to retire are further along the track, knowing how gifting works can help you transfer money if you wish to do so well before it becomes an issue for Age Pension eligibility. Our Head of Customer Services, Steven Sadler, suggests that those who might be planning on gifting more than $10,000 might wish to think about the 30 June deadline. He adds that there is no repercussion or rule for gifting additional amounts for the same purpose.

The main take out

No matter how many questions you have about which retirement income strategy might best work for you, forward planning is almost always the best start. We hope our end of financial year update has prompted some helpful questions for you by highlighting the above pre-30 June opportunities. If you need further support or some scenario planning, the following tailored advice consultations are designed to solve most retirement income dilemmas.


Understanding more about super (there are many options available to maximise income or wellbeing).

Age Pension

Maximising your entitlements (making the most of your financial resources and Centrelink)

Retirement Forecasting

Retirement Forecasting (understanding spending options during your retirement journey).