New Superannuation Contribution limits are applicable from July 1, 2017.

From 1 July 2017, the concessional contribution limit is reduced to $25,000 and applies to all taxpayers regardless of age.

Concessional contributions include:

  • compulsory employer contributions,
  • any pre-tax salary sacrificed super and
  • any after-tax contributions you make personally which you intend to claim as a tax deduction.

Given the reduced limit, take care when calculating your total contributions & be sure to take into account any June 17 contributions if they were paid late, and not received by the fund until July 17.

Please note, if you are aged under 18 or over 65 years of age, you need to satisfy the work test to make a concessional contribution.

Abolition of 10% Assessable Income Test Rule

The Assessable Income Test Rule has now been abolished so employees can now make personal tax deductible super contributions. Importantly, the removal of this test removes the necessity for employees to enter into salary sacrifice arrangements with their employers.

We would also like to bring to your attention that when you salary sacrifice, your employer is entitled to calculate super contributions on your reduced salary. In these circumstances it may be more beneficial to cease any salary sacrifice arrangements and personally contribute the funds directly into your super fund from after-tax income.

Carry Forward of Unused Concessional Contribution Cap

There is a new rule that allows for a ‘catch up’ claim of unused concessional contributions. If you do not contribute the full amount of your concessional contribution cap in a year, the unused amount will be carried forward and accumulated over a rolling 5-year period.

It provides the opportunity to make lump sum contributions of all unused amounts to reduce your taxable income in a future income year. This rule applies from 1 July 2018 onwards and is only available to individuals with superannuation account balances less than $500,000 at the end of the previous financial year where you seek to utilise the ‘catch up’.