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SUPERANNUATION |
Superannuation Contributions |
| Under age 65 |
| Anyone under age 65 is eligible to make superannuation contributions to a complying superannuation fund. |
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| Concessional contributions |
If the person is not in paid employment, or if in paid employment and income from paid employment is less than 10% of total income, then they are eligible to receive a tax deduction for making personal superannuation contributions up to their concessional contribution cap. For a person who is under age 50 years in a financial year the concessional contribution cap is $25,000, indexed to AWOTE. For a person aged 50 and over in a financial year the concessional contribution cap is $50,000. This cap only applies up and until the financial year 2011-12. From financial year 2012-13 the concessional cap reverts to $25,000.
Superannuation contributions paid by an employer, superannuation guarantee contributions and salary sacrifice superannuation contributions are also concessional contributions and count towards the concessional contribution cap.
The superannuation fund receiving the concessional contributions is required to deduct 15% contribution tax.
If the concessional contributions cap is exceeded additional tax of 31.5% is applied to the contributions exceeding the cap. The amount of excess contributions also counts towards the non-concessional contribution cap. |
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| Non-concessional contributions |
Non-concessional contributions can also be made to a superannuation fund. A tax deduction cannot be claimed for non-concessional contributions. There are no restrictions on making personal non-concessional contributions up to the non-concessional contribution cap. The non-concessional contribution cap is three times the concessional contribution cap and is currently $150,000 for each financial year. However, if more than $150,000 is paid in one financial year, $450,000 can be paid within the period of that financial year plus the next two financial years.
If the non-concessional contribution cap is exceeded tax is levied at the top marginal tax rate (currently 46.5%) on the amount of contributions exceeding the non-concessional contribution cap. |
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| Aged 65 to under age 75 |
The same rules for those under age 65 apply but with the following exceptions.
In order to be able to make superannuation contributions the person must meet a work test. To meet the work test they will need to work at least 40 hours in any continuous 30 day period in the financial year in which the contributions are made.
The non-concessional contribution cap is $150,000 only. Those over age 65 cannot use the $450,000 contributions cap by bring forward contributions for the next two years. They are strictly limited to a $150,000 in a financial year. |
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| Aged 75 and over |
| Those aged 75 years or over cannot make contributions to a superannuation fund. |
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