Changes to the Superannuation Concessional Contributions Cap

As you may be aware the Australian Taxation Office has a cap on Concessional (before-tax) Contributions that is made by or for you to a complying super fund. The general Concessional Contributions cap for 2013-14 is $25,000.

If you are 59 years old or over on 30 June 2013, the Australian Taxation Office has allowed additional Concessional Contributions to be made to your super, with the cap increasing from $25,000 to $35,000.

From 1 July 2014 the higher cap of $35,000 will also apply to people who are 50 years or over.

What are Concessional Before Tax Contributions?

Concessional contributions include:

• Employer contributions such as:
• ­ Compulsory super guarantee contributions
• ­ Any additional voluntary super contributions your employer may make
• ­ Any insurance premiums or administration fees that are paid by your employer on your behalf
• ­ Salary sacrifice amounts
• ­ Personal contributions by an eligible person (such as a self-employed person) that are allowed as an income tax deductions
• ­ Transfers from reserves
• ­ The taxable component of a directed termination payment in excess of $1 million

It is important to regularly monitor contributions made to your super fund as you do not want to exceed a cap. Also the timing of contributions are also important as to when the super fund receives your contributions. If an employer sends contributions in the month after each quarter, your April-June contributions may not be received until July and therefore, that counts forwards the new financial year caps.

If you have any queries about Concessional Contributions and the tax implications, please call our office on 8344 6011.

back