If your kids under 18 are eligible for super guarantee payments under new rules, this is why it might be more cost-effective to use your self-managed fund.
This is the result of the $450-per-month minimum threshold for super guarantee payments being removed so that employees who are under 18 will be eligible for super if they work more than 30 hours in a week, regardless of how much they’re paid.
Small amounts of super earned from part-time work could be eroded by fees in industry or retail funds.Let’s say you have encouraged your teenager to get a part-time job. They might be cooking burgers at McDonald’s, picking up glasses and cups at the local café or even working in the family’s small business. You might believe this teenager doesn’t meet the 30-hour-per-week test.
The Australian Taxation Office is clear that super is payable for any week when the 30-hour test is met.So now they’ll start to receive annoyingly small amounts of superannuation. The question then is: who should your child’s super be paid to? It could be convenient, cost-effective and even parentally responsible to have that super paid into your existing SMSF.
Predominantly to save the costs eating away at your child’s small super balance in a public offer fund. In your SMSF the costs can be controlled more carefully, will be shared with the other fund members and can be proportional to the size of their account.You as their parent and guardian join them up to the fund, whether it’s a public offer fund or an SMSF.Not until they turn 18. Until then, their parent will represent them on the board of the corporate trustee.
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