The contribution caps aim to ensure that the substantial tax concessions for super are sustainable and fair.
The intent of increasing the concessional caps for people who have not had the benefit of super guarantee for their entire working lives is to allow them to contribute more to their super as they near retirement age.
Excess contributions tax (ECT) was introduced in 2007 to limit the amount of super contributions that are subject to concessional tax rates.
Amendments to the ECT legislation for concessional contributions came into effect on 29 June 2013. This means that members who contribute in excess of the cap will have this amount included in their assessable income and taxed at their marginal tax rates.
Your members can make an election with us to have up to 85% of their excess concessional contributions released from their super fund. This applies to excess concessional contributions made from 1 July 2013.
How much is the concessional contributions cap?
Your members aged 49 or over (on 30 June 2014) will be able to access the higher cap of $35,000 from 1 July 2014.
Will the concessional contributions cap be indexed in 2014–15?
Indexation of the general concessional contributions cap has been paused at $25,000 up to and including the 2013–14 year. Normal indexation of the general concessional cap will resume in the 2014–15 year.