Super contribution cap changes

Find out if the superannuation contribution cap changes affect you.

Superannuation contribution cap changes

This information is relevant to you if you:

  • capreceive contributions from your employer into super
  • salary sacrifice into super
  • make personal contributions to your super, and claim a tax deduction for the contributions.

Exceeding the concessional contributions cap

You may exceed your concessional contributions cap, even though your contribution behaviour remains the same. You may exceed your cap if:

  • your concessional contributions were more than $25,000 in the 2017-18 or later financial years. If so, you must lodge a tax return for the year you exceeded the cap
  • you are a member of a constitutionally protected fund. Concessional contributions made to these funds now count towards the concessional contributions cap
  • you are a member of a defined benefit fund which has unfunded contributions each financial year. These contributions now count towards your concessional cap.

New non-concessional contribution and bring-forward arrangements

The non-concessional contributions cap and bring-forward arrangements are relevant to you if you:

  • make or plan to make after-tax contributions into your super
  • were under 65 years old at any time in the first year the bring-forward is triggered
  • made a lump sum non-concessional contribution that triggered a bring-forward arrangement in the 2015-16 or 2016-17 financial year, prior to the introduction of the $1.6 million limit on 30 June 2017
  • had a total super balance of $1.4 million or more from 30 June 2017.

When your non-concessional contribution cap is zero

If your total super balance (TSB) on 30 June of a financial year is $1.6 million or more, your non-concessional cap for the following financial year is zero.

If you are currently in a bring-forward arrangement and your TSB is $1.6 million or more on 30 June prior to either the second or third year of the bring-forward, your remaining bring-forward cap will be nil for the respective financial year.

Mandated non-concessional contributions

Paying the excess contributions tax

If your TSB is $1.6 million or more at 30 June in the previous financial year and you are committed to mandated non-concessional contributions within a defined benefit fund, you will exceed the non-concessional contributions cap. You will receive an excess non-concessional contributions (ENCC) determination.

If you are unable to release the amount in the ENCC determination from your super fund, you must select Option 2 in the ENCC election, and you will receive an excess contributions tax (ECT) assessment.

You will need to pay the resulting ECT liability from your own sources. You will not be able to release amounts from your super to pay this.

A change in remaining bring-forward cap

Your remaining bring-forward cap will change because the annual contribution cap has reduced from $180,000 to $100,000 for the 2017-18 and future years.

Transitional arrangements will apply if you:

  • triggered the bring-forward arrangement in 2015-16 or 2016-17
  • have not completely used your bring-forward cap amount before 1 July 2017.

The maximum amount of bring-forward available depends on the year that you triggered your bring-forward arrangement. It will reflect the reduced annual non-concessional contributions cap.

 

Seek professional advice

It may be wise to speak with your adviser at Intuitive Super to understand how changes to superannuation contribution caps affect you. Call us on 1300 856 064 today.

Source ATO

 

Last Updated:15-08-2019 13:21