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  • Contributions to hybrid super funds

    Super funds providing a combination of accumulation benefits and defined benefits are known as hybrid funds.

    Hybrid funds can provide:

    • a defined benefit – which may be defined by a formula based on factors such as your salary, length of contributory service and age at exit
    • an accumulation benefit – based on your own contributions plus earnings on those contributions.

    Some super funds have both unfunded and funded portions (for example, CSS and PSS).

    If your super fund has an unfunded and funded portion, only the unfunded portion has a zero concessional contributions amount. Any funded portion may have concessional contributions that count towards your concessional contributions cap. For example, the productivity contributions paid by employers to the CSS and PSS are concessional contributions.

    Example

    John is 42 years old. He works for the Australian Government and is a member of the CSS.

    In the 2016–17 financial year, John's employer contributes $2,000 in productivity super contributions to the CSS. John also salary sacrifices $20,000 to another super fund.

    John's concessional contributions for the financial year will be $22,000, consisting of:

    • the productivity contributions of $2,000 paid to the CSS
    • his salary sacrificed amount of $20,000.

    There are no concessional contributions as part of his unfunded benefit in the CSS.

    As John did not exceed his concessional contributions cap, he does not pay any excess concessional contributions tax.

    End of example
      Last modified: 26 Sep 2018QC 20481