Ready for super reform - a guide for APRA-regulated super funds

Reduction in tax concession for very high income earners

What is the policy intent?

As part of the 2012-13 Budget measures, the government announced a reduction to the tax concession that high-income earners receive on their concessional contributions to align it more closely with the concession received by average-income earners.

What is decided?

From 1 July 2012, individuals with income greater than $300,000 will have the tax concession on their contributions reduced from 30% to 15% (excluding the Medicare levy).

The definition of concessional contributions for this measure includes all employer contributions (both super guarantee and salary sacrifice contributions) and personal contributions for which a tax deduction is claimed. For members of defined benefit funds (funded and unfunded schemes), it includes all of their notional contributions.

The reduced tax concession will not apply to concessional contributions that exceed the concessional contributions cap because they are subject to the excess contributions tax.

What isn't decided?

The Treasury has consulted with the industry on the various design options and details to implement the measure as announced. Further details are not yet available.