• Change to Division 293 income threshold

    Currently, individuals with income and concessional super contributions greater than $300,000 will trigger a Division 293 assessment.

    From 1 July 2017, the government will lower the Division 293 income threshold to $250,000. An individual with income, and concessional super contributions, exceeding the $250,000 threshold will have an additional 15% tax imposed on the lesser of:

    • the excess, or
    • the concessional contributions (except excess contributions).
    Examples

    Main points

    Example

    • Income is $260,000
    • Concessional contributions are $5,000
     

    The sum of Tara's income and concessional contributions for the income year is $265,000.

    Tara will be assessed for Division 293 tax on the lesser of the amount over $250,000 ($15,000) and her concessional contributions ($5,000).

    Tara will receive a Division 293 assessment for 15% tax on $5,000.

    • Income is $240,000
    • Concessional contributions are $25,000
     

    The sum of James' income and concessional contributions for the income year is $265,000.

    James will be assessed for Division 293 tax on the lesser of the amount over $250,000 ($15,000) and his concessional contributions ($25,000).

    James will receive a Division 293 assessment for 15% tax on $15,000.

    The intent of this change is to better target tax concessions to ensure the superannuation system is equitable and sustainable.

    See also:

    Last modified: 17 Feb 2017QC 51331