One of the inconsistencies in the superannuation system has been the way it has treated salaried workers and self-employed people differently.

If you have a full-time or even part-time job, then you are covered by the compulsory Superannuation Guarantee, which requires your employer to pay 9.5 percent of your salary into a nominated fund.

You can also have your employer take money out of your salary in what is called salary sacrifice, which also has the advantage of reducing your pre-tax income.

But if you work for yourself, you have to fund your own super contributions, and some of these are considered after tax.

The nature of work is changing, of course, and there are now an estimated 800,000 self-employed people with their numbers growing every year as the economy transforms.

The Government’s superannuation changes, set to come into force on July 1 this year, recognize this tend for the first time.

From that date, all Australians under the age of 75 will be able to claim tax deductions for personal super contributions, with these contributions subject to the concessional contributions cap of $25,000 per year.

Until then, the caps are $30,000 for people aged under 48 and $35,000 for older Australians.

One of the key changes coming in July is the abolition of the “10 percent test” which has been a major complication for the self-employed, many of whom rely on a “portfolio” of work which includes their own business and a number of part-time jobs.

Up until now, if less than 90 percent of your income is generating from self-employment, then you have been unable to make concessional contributions to your super.

Critics have long claimed that this system is unfair, and the Government has been listening and has abolished this provision and it’s a level playing field for all income earners.

Another change tinkers with the rules around allowing people to fund the super contributions of a low income spouse or life partner.

Here, the income limit will be raised from $13,800 to $40,000 with the maximum rebate of $540 tapering down when the spousal income reaches a $37,000 threshold.

So, the answer to the question “who can pay into super” is employers, employees, self-employed and – in low income situations – your spouse.

There’s been a lot of talk about the super changes, but critics are in agreement that – in this area at least – the Government has got it right at last. Let us know your thoughts in the comments below, or on our Facebook page.

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