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  • Division 293 tax – information for super funds

    This measure was originally announced in the 2012 federal Budget and was referred to as the ‘Reduction in tax concessions for very high income earners’. Now known as the ‘Sustaining the superannuation contribution concession measure’, it amends the ITAA 1997 to introduce the new Division 293 tax.

    Since 1 July 2012, your members will generally be liable to pay Div 293 tax if their income for surcharge purposes (disregarding their reportable super contributions) and their low tax contributions are greater than $300,000. This is to reduce the tax concession received on concessional contributions from 30% to 15%.

    Around 128,000 people will be affected by this measure for the 2012–13 financial year (about 1.2% of the population contributing to super).

    What is Division 293 tax?

    Division 293 tax will be charged at 15% of an individual’s taxable concessional contributions above the $300,000 threshold (which are capped for 2012–13 at $25,000). For individuals who are members of a defined benefit fund, Division 293 tax may be calculated on notional contributions, which are not capped.

    Who is liable for Division 293 tax?

    Individuals will be liable for Division 293 tax if they have taxable contributions for an income year and their income for surcharge purposes plus their low-tax contributions are greater than $300,000. The taxable contributions will be the lesser of the low-tax contributions and the amount above the $300,000.

    Income for surcharge purposes

    Division 293 tax uses an adjusted income based on income for Medicare levy surcharge purposes. This information is collected from the individual’s tax return.

    Attention

    Reportable superannuation contributions are disregarded from the surcharge calculation because these contributions are included in another part of the calculation.

    End of attention

    Find out more

    How Division 293 tax is calculated 

    End of find out more
    • Last modified: 15 Oct 2014QC 36567