Superannuation contributions surcharge - information for super funds and professionals
This publication is designed to provide information on the superannuation contributions surcharge and highlights information that may be relevant to super providers, including self-managed super funds, tax professionals, and other super professionals.
If you are an individual, refer to Superannuation surcharge - information for individuals.
End of further information
The superannuation contributions surcharge is levied on certain super contributions (usually employer and personal deductible amounts). In May 2005, the abolition of the super contributions surcharge was announced as part of the 2005-06 Federal Budget. The surcharge legislation was amended so the superannuation contributions surcharge will not apply to any super contributions made on or after 1 July 2005.
The superannuation contributions surcharge applies to certain superannuation contributions made after 20 August 1996 and before 1 July 2005. The surcharge will still need to be paid for any liabilities that are raised for the financial years 1997-2005.
There may be times in the future where an original assessment will issue or an amendment to a superannuation contributions surcharge assessment for the financial years 1997-2005 may be required, and this could result in a liability. This can happen even if a superannuation contributions surcharge assessment was not previously issued.
Super providers must ensure they lodge any outstanding Superannuation member contributions statements for the financial years 1997-2005.
Unfunded defined benefit funds and members of constitutionally protected funds are not required to pay the superannuation contributions surcharge liability until the member has left the fund, or begin to receive their benefits.
Even though superannuation contributions surcharge has been abolished for contributions made from 1 July 2005, superannuation funds and retirement savings account providers still need to lodge a Superannuation member contributions statement (NAT 2710) to calculate super co-contribution entitlements and to ensure employers have met their superannuation guarantee obligations.
End of attention
If you are a tax agent, and would like to discuss the superannuation contributions surcharge with your client, refer to Superannuation surcharge - information for individuals. It is aimed at people affected by the superannuation surcharge.
The surcharge will apply to contributions if the sum of an individual's taxable income and certain other amounts reach a given threshold for the relevant financial year.
Surchargeable contributions for members of accumulation funds include:
- employer contributions
- personal contributions for which a tax deduction has been claimed
- the post 20 August 1996 portion of an employer eligible termination payment rolled over on or after 1 July 1997
- allocated surplus amounts (this is any amount allocated to a member's account on or after 1 July 1997 by the super provider from surplus that exceeds an amount considered reasonable by an eligible actuary).
Surchargeable contributions for members of defined benefit funds are determined by an actuary using a formula to calculate the value of the benefits and expenses relating to the membership for a financial year.
Personal contributions, for which no income tax deduction has been claimed, are not surchargeable contributions.