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  • Preventing inadvertent concessional caps breaches by certain employees

    In the 2018–19 Budget, it was announced that eligible individuals will be able to choose to nominate their wages from certain employers would not be subject to the superannuation guarantee (SG).

    Individuals with more than one employer who expect their employers' compulsory super contributions will exceed their annual concessional contributions cap for the 2019–20 financial year, will be able to apply for an exemption certificate to release some of their employers from their SG obligations.

    Individuals will still need to receive SG payments from at least one employer.

    Once the law has passed and received Royal Assent, eligible individuals will be able to download an application form from ato.gov.au to complete and return to the ATO for consideration.

    It is anticipated that individuals will need to submit their applications 60 days before the start of the quarter for which they are seeking the exemption.

    The application form will request information required for the Commissioner to make an assessment including:

    • which employers the exemption certificate will apply to
    • the quarter(s) in the financial year for which the exemption is sought.

    Exemption certificates may be issued for multiple quarters within a financial year but cannot cover more than one financial year.

    If approved, the individual and their exempted employers will receive an exemption certificate directly from the ATO. By issuing an exemption certificate the Commissioner will provide certainty for the employer as, once issued, the certificate cannot be varied or revoked.

    The exemption certificate does not prevent the employer from making super contributions on behalf of the employee. The only consequence of having a certificate is that the employer will not need to make SG contributions to avoid liability for the SG charge.

    The certificate does not change the employer's obligations under a workplace award or agreement, or an employer's agreement with their super fund.

    Employees will need to talk to their employers before making an application as the take-up of this arrangement and any changes to remuneration need to be negotiated between the employee and their employers.

    Legislation and supporting material

    The Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018External Link was passed by the House of Representatives on 20 June 2018 and is currently awaiting consideration by the Senate.

    See also:

    • 2018–19 Budget Paper No. 2 – Revenue Measures page 40

     

      Last modified: 02 Aug 2019QC 55371