Super SA has announced a new lifetime limit cap of $1,780,000 for its Triple S account holders, effective 1 July 2024. Super SA Triple S is only available to those in the South Australian public sector, such as medical professionals and teachers.
Previously, Triple S members were limited to a lifetime cap of $1,705,000, before penalty tax would apply. The increased cap effectively provides members with the potential to salary sacrifice $75,000 more into their superannuation account.
Unlike most super funds which have an annual concessional cap of $30,000 from 1 July 2024, Super SA Triple S has no annual concessional cap. Rather, members can sacrifice their salaries as much as they can afford to, providing considerable tax savings.
The tax savings that occur from salary sacrificing to your super account depend on how much you earn. On average, however, people can expect to pay around 20% less tax on the amount they contribute. Therefore, $30,000 contributed to other funds would save you about $6,000 in tax, whereas $100,000 contributed to Triple S would save you about $20,000 – a significant increase.
We would encourage anyone who is eligible to use Super SA’s Triple S fund to consider whether their financial situation allows them to take advantage of its very generous tax concessions.
Strategies to maximise your nest egg
While $1,780,000 is a large amount to have in your super, for those fortunate enough to be worried about reaching this ceiling, there are several strategies that can help you to grow your super even further:
- Consider super splitting your contributions to a spouse (if you meet eligibility criteria). You can split up to the previous year’s normal concessional cap ($27,500 for FY24) to a spouse, thus lowering your balance by $27,500 and creating access to a second cap of $1,780,000 for your spouse (even if they already have a Super SA account and even if they have already contributed in their own right).
- Consider rolling most of your Super SA account to another super fund so the earnings will accrue there and provide you with more time before you reach Super SA’s cap.
- For those earning above $250,000, consider having Super SA pay your Division 293 tax bill, as this would allow you to pay the bill with pre-tax dollars.
- Even if you reach the cap, you don’t pay tax once you go over. You only pay tax once you roll out / withdraw from super. Therefore, if you had, say, $2,000,000, you could roll out $1,780,000 and wait for the cap to index over several years before rolling out the rest.
If you also have one of Super SA’s older products such as the Pension or Lump Sum Scheme, you are potentially eligible for two $1,780,000 caps.
We must emphasise that the rules around Super SA are complicated. Everyone’s situation is different, and there can be considerable tax penalties if you make a mistake. Therefore, make sure you seek professional advice before attempting such strategies.
If you would like to discuss your Super SA strategy, please contact your local William Buck Wealth Advisor.
Read our previous information on Super SA rule changes here.
