Perri: Compulsory super can work

Making compulsory superannuation work more effectively can provide substantial taxation relief to clients of financial planners,AMPtechnical services manager John Perri says.

Perri, speaking at an AMP briefing yesterday, says planners can introduce a number of strategies to make compulsory superannuation work for their clients.

Chief amongst these is spouse contributions.

Perri says spouse contributions can be used to maximise the tax effectiveness of superannuation and are particularly useful if one partner is not working.

“Spouse superannuation contributions are one of the best moves this current government has introduced,” he says.

Perri says there is effectively no limit on how much can be contributed under spouse contributions and a $540 tax offset can be claimed provided the recipient spouse’s assessable income is less than $10,800.

Compulsory superannuation can also be used to pay for insurance premiums, so the pool of superannuation money or the interest deriving from it, can be directed by financial planners towards obtaining adequate insurance cover for clients, Perri says.

According to Perri, through salary sacrifice, money can be redirected towards paying for life and disability premiums from the pre-tax income paid into superannuation plans.

Perri says self-employed people may be able to claim a tax deduction for super contributions that can fund the life and disability component of their super plan.

He says while some corporate superannuation funds can be a little restrictive on the use of compulsory super, a planner’s focus should be on achieving the client’s insurance needs.