Edited version of your written advice

Authorisation Number: 1013081544186

Date of advice: 5 September 2016

Ruling

Subject: Personal superannuation contribution

Question

Are you entitled to claim a deduction for a personal superannuation contribution in the 20XX-YY financial year?

Answer

Yes

This ruling applies for the following periods:

Year ended 30 June 20YY

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You are serving as an elected councillor of a local council. You received an allowance for this position. You also had other assessable investment income. You did not have any other employment income.

You were less than 75 years of age at 30 June 20YY.

You intend to make a contribution to a complying self-managed superannuation fund. You have written to the fund notifying them you intend to claim this deduction, and have received appropriate confirmation from the fund.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 290-150

Income Tax Assessment Act 1997 Section 290-155

Income Tax Assessment Act 1997 Section 290-160

Income Tax Assessment Act 1997 Section 290-170

Superannuation Guarantee (Administration) Act 1992 Section 9AO

Reasons for decision

Personal superannuation contribution deductions

A deduction is available for personal superannuation contributions (PSC) made during the income year ended 30 June 2015 where all the conditions specified in section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997) are met.

These conditions are:

• Where the contribution is made to a superannuation fund, the fund must be a complying superannuation fund in the income year that the contribution was made, and

• You must satisfy the age related conditions, and

• You must not have exceeded the maximum earnings as an employee condition (if applicable) and

• You must have given a valid notice of intent to the superannuation fund in the approved form by the required time and received acknowledgement from the fund

These rules do not differentiate between retail funds, retirement savings accounts or self-managed super funds.

Complying fund condition

Section 290-155 of the ITAA 1997 sets out the condition regarding the complying status of the superannuation fund/s to which the contribution was made.

In your case, you are considered to have a self-managed super fund which is a complying superannuation fund.

Age related condition

Section 290-165 of the ITAA 1997 sets out the age related conditions which must be met to be entitled to claim a deduction and stipulates that; 

• If you were under 18 years of age at the end of the income year in which you made the contribution, you must have derived income from:

• carrying on a business, or

• from activities related to employment that resulted in you being treated as an employee (as defined in section 290-160), or

• You were under 75 years of age, or

• If you turned 75 years of age, the contribution was made before 28 days after the end of the month in which you turned 75.

In your case as you were under 75 years of age in the income year that the contribution was made, you have met this condition.

Maximum earnings as employee condition  

Section 290-160 of the ITAA 1997 considers the maximum earnings as an employee condition.

Section 290-160 of the ITAA 1997 states that it only applies if:

• in the income year in which you make the contribution, you engage in any of these activities:

• holding an office or appointment;

• performing functions or duties;

• engaging in work;

• doing acts or things; and

• the activities result in you being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act . 

You have received your taxable income from investments as well as an allowance for performing your duties as a local councillor.

Section 12 of the Superannuation Guarantee (Administration) Act 1992 (SGAA) extends and clarifies the ordinary meanings of "employee" and "employer" for the purposes of determining a superannuation guarantee obligation.

Subsection 12 (9A) of the SGAA states that a person who holds office as a member of a local government council is not an employee of the council.

As you are not considered an employee of the council for the purposes of the SGAA, and you do not earn any other income from employment, you do not fulfil the provisions of section 290-160 of the ITAA 1997. This section therefore does not apply to you.

Valid notice of intent to deduct condition

Section 290-170 of the ITAA 1997 sets out specific conditions in relation to the notice of intent to claim a PSC deduction. These are:

• you must have given a valid notice to the superannuation fund in the approved form of your intention to claim a deduction, and

• you must have given the notice of intent before the earliest of the following two dates;

• the day on which you lodge your income tax return for the income year in which the contribution was made, or

• the end of the next income year; and

• the superannuation fund must have acknowledged receipt of your notice.

In your case, you have provided notification of your intention to claim a deduction prior to the lodgment of your tax return for the 20XX-YY financial year. Your super fund has also acknowledged receipt of your notice.

As you have met all of the applicable conditions listed in section 290-150 of the ITAA 1997 you are entitled to claim a deduction for a personal superannuation contribution.