Contributions that are personal contributions
Personal contributions are generally those made by a member for their own benefit from their after-tax monies, including where a member has claimed a personal tax deduction. Personal contributions can also be made by their employer on their behalf.
Both concessional and non-concessional contributions made by the member are reported here.
There are special rules and concessions that apply to these types of personal contributions:
- Capital gains tax cap election amounts
- Personal injury election/structured settlement amount
- Amounts transferred from foreign funds
These are reported separately in order for us to properly administer them. The personal contributions to which each of these concessions apply are reported at the applicable field, with only the remainder being reported at the personal contributions field.
Ensure your processes and systems recognise how the personal contributions field interacts with these other separately reported personal contributions.
If a member seeks to have a concession applied to a contribution, and you assess that the concession is not applicable, the contribution should be reported as a personal contribution. For example, if a contribution is made with a capital gains tax election and the provider determines it is invalid because the election was given to the provider after the contribution was made, the contribution should be reported at the personal contributions field and not at the capital gains tax cap election amounts field.
Transfers from non-complying funds
A transfer from a non-complying fund is a member contribution. The entire amount should be included at the Personal contributions field. The amount should not be reduced or varied by any fees, taxes or interest paid. Note that different rules apply to transfer from foreign funds – for more information, see Amounts transferred from foreign funds.
Insurance premiums paid by a member
Insurance premiums paid to you by the member are personal contributions and are to be reported as Personal contributions.
Some of your members may have an entitlement to super co-contributions arising from insurance premium payments. However, even though you may not be able to accept the super co-contributions, these super co-contributions could be paid to another provider.
Example: insurance premiums paid by a member
Secure Life Super has a range of risk-only policies where members pay an annual premium and the fund provides cover for death and disability. Stan is one of these members and paid a premium for a risk-only policy of $1,000 in 2014–15 and again in 2015–16.
Secure Life Super reported for risk policies when they also held accumulation interests for the same members but not for its risk-only policies. Stan was therefore not made aware that the premium payments counted as personal contributions.
In late 2017, the ATO conducted a routine audit of Secure Life Super. It identified that the fund had not lodged for a large proportion of its membership and was not compliant with its reporting obligations.
Following the audit, Secure Life Super reported the outstanding premium amounts as personal contributions in the relevant years. It also reported to us that super co-contributions can't be accepted by the fund for the risk-only accounts.
A failure to lodge administrative penalty was imposed on Secure Life Super for the late reporting.
It was determined that Stan was entitled to super co-contributions for 2014–15 and 2015–16 financial years. As the fund had reported that super co-contributions can't be accepted, we asked Stan to nominate another super fund to which the entitlements will be paid.
End of example