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From 1 July 2009, changes apply to super co-contributions, income tests and concessional contributions caps. For a summary of these changes, refer to Changes to super for individuals.
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From 1 July 2007, there will be significant changes to the tax treatment of super
For most people aged 60 and over, who receive super benefits from a taxed source, payment of a benefit as a lump sum or income stream (such as a pension) will be tax-free.
If your super comes from a source that is not taxed (such as public service super funds), your benefits will continue to be taxed when you receive them. However, you may be entitled to a tax offset that will reduce the tax payable on these benefits.
Reasonable benefit limits will be abolished for benefits received from 1 July 2007. These currently limit the benefits you can receive at a concessional tax rate from your super.
From 1 July 2007, concessional contributions made to super will be subject to an annual cap of $50,000. Concessional contributions include employer contributions (including contributions made under a salary sacrifice arrangement) and personal contributions claimed as a tax deduction by a self-employed person. The age-based limits on deductions that currently exist for these contributions will no longer apply.
You will be taxed on concessional contributions over the $50,000 cap at a rate of 31.5%. This is on top of the 15% tax paid by the fund. You can ask your super fund to release money to pay this excess contributions tax.
Between 1 July 2007 and 30 June 2012, a transitional concessional contributions cap will apply. During this time, the annual cap will be $100,000 for people aged 50 or over.
From 1 July 2007, non-concessional contributions made to super will be subject to an annual cap of $150,000.
Non-concessional contributions include personal contributions for which you do not claim an income tax deduction.
There will be a ‘bring-forward’ option available, meaning that people under 65 years of age can make non-concessional contributions of up to $450,000 over a three-year period.
You will be taxed on non-concessional contributions over the cap at the rate of 46.5%. You will be required to ask your super fund to release an amount that is equal to the tax liability.
If you are self-employed you may be able to claim a full tax deduction for your super contributions.
You may also be eligible for the Super Co-contribution on contributions that you do not claim a deduction for.
From 1 July 2007, employer contributions made to new super accounts without a tax file number (TFN) will be taxed an additional 31.5%. This is on top of the 15% tax paid by the fund. For existing accounts, the additional 31.5% will generally be payable on all contributions once the contributions for the year reach $1,000. For accounts created after 30 June 2007, the additional 31.5% will be payable regardless of the amount contributed. To avoid this you must provide your TFN to your super fund.
If your fund pays the additional tax and you provide your fund with your TFN, your fund may be entitled to claim a tax offset. Your fund will credit the tax offset to your account.
Super funds will not be able to accept certain contributions if you have not provided your TFN. The contributions your fund will have to reject include contributions you make and contributions your spouse makes to your super fund for you.
Unclaimed money from private sector super funds will have to be paid to the Australian Government (except for state and territory government superannuation schemes).
Unclaimed super from private sector schemes is required to be paid to us, rather than to their state or territory authority in respect of the half-year ending on 30 June 2007 and later periods.
The reporting requirements for each half-year period are as follows:
- 1 July 2006–31 December 2006, funds must lodge their reports to their state or territory authority by 30 April 2007, and
- 1 January 2007–30 June 2007, funds must lodge their reports and forward unclaimed money to us by 31 October 2007.
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Information on how the new legislation will affect unclaimed money and how to report it will be progressively added to our website.
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Most employment termination payments (previously known as eligible termination payments) will no longer be able to be rolled over into super
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For more information refer to:
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Reporting for self managed super funds will be streamlined, and there will be new penalties for late lodgment.
Death benefits will be affected.
Until the changes start on 1 July 2007, some transitional arrangements will apply.
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For more information about these arrangements, refer to the following fact sheets:
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To obtain a copy of our publications or for more information:
If you do not speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service on 13 14 50 for help with your call.
If you have a hearing or speech impairment and have access to appropriate TTY or modem equipment, phone 13 36 77. If you do not have access to TTY or modem equipment, phone the Speech to Speech Relay Service on 1300 555 727.
Last Modified: Friday, 21 August 2009
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