• Exceptions to the calculation

    State higher level office holders

    Individuals who are classified as state higher level office holders who have certain super contributions made on their behalf into a constitutionally protected fund (CPF) are exempt from having Division 293 tax applied to those super contributions.

    For these state higher level office holders, all contributions made to a CPF, other than salary packaged contributions, are excluded from being taxed. Salary packaged contributions are contributions made because the individual agreed with their employer for the contribution to be made and, in return, withholding payments are reduced.

    While certain contributions are excluded from being taxed, they are to be included in the calculation for determining whether the threshold has been exceeded. This means that when working out the taxable contributions for the income year, it is the lesser of:

    • the excess above the threshold (including all low-tax contributed amounts and all defined benefit contributions) for the income year; and
    • the individual’s low-tax contributions for the financial year (worked out having regard for the excluded contributions).

    Example 17

    For the 2012–13 income year, Stuart, a state higher level office holder, has income for Division 293 purposes of $300,000, and concessional contributions as follows:

    • employer contributed amounts (super guarantee payments) of $20,000
    • salary packaged contributions of $20,000
    • defined benefit contributions of $30,000.

    Stuart's taxable contributions are the lesser of:

    • excess above the threshold which is Income plus All Contributions minus Threshold ($300,000 + $70,000 ($20,000+$20,000+$30,000) - $300,000). The excess is $70,000; and
    • low-tax contributions calculated by excluding the exempt contributions which are the employer contributed amounts (super guarantee payments) and the defined benefit contributions. This leaves only the salary packaged contributions of $20,000. This means Stuart's low-tax contributions are $20,000.

    The lesser amount is the low-tax contributions, which means that Stuart's taxable contribution amount is $20,000.

    End of example

    Commonwealth judges

    Individuals who are justices of the High Court, or justices or judges of a court created by the parliament, who make super contributions to a super fund established under the Judges’ Pensions Act 1968, are exempt from having Division 293 tax applied to those contributions.

    While certain contributions made on behalf of these individuals are excluded from being taxed, they are to be included in the calculation for determining whether the threshold has been exceeded. This means that when working out the taxable contributions for the income year, it is the lesser of:

    • the excess above the threshold (including all low-tax contributed amounts and all defined benefit contributions) for the income year, and
    • the individual’s low-tax contributions for the financial year (worked out having regard for the excluded contributions).

    Example 18

    For the 2012–13 income year, Matthew, a High Court justice, has income for Division 293 purposes of $325,000, defined benefit contributions made to his Judges Pension Scheme of $35,000, and low-tax contributed amounts made to his self-managed super fund of $20,000.

    Matthew's taxable contributions are the lesser of:

    • excess above the threshold which is Income plus All Contributions minus Threshold ($325,000 + $55,000 ($35,000+$20,000) - $300,000). The excess is $80,000; and
    • low-tax contributions calculated by excluding the exempt contributions which are the contributions made to his Judges Pension Scheme. This leaves only the low-tax contributed amounts made to his SMSF of $20,000. This means Stuart's low-tax contributions are $20,000.

    The lesser amount is the low-tax contributions, which means that Matthew's taxable contribution amount is $20,000.

    End of example
      Last modified: 07 Dec 2016QC 36275