As of 1st of July 2012, all taxpayers will have a $25,000 limit on the concessional contributions you can make to a fund. Previously, for those over the age of 50, a $50,000 limit applied.
You will need to ensure that you adjust your salary sacrifice arrangements to ensure you do not breach the new limit. Importantly, remember the total of superannuation guarantee payments (i.e. 9% of your salary) and further salary sacrificed amounts, count towards the limit. If you are 65 years of age or older, you will also need to continue to pass a work test to make contributions into your fund.
The non-concessional contribution cap (out of pocket contributions) has not changed ie $150,000 per year or $450,000 over a 3 year period, subject to other conditions.
For breaches of the $25,000 concessional contributions limit of up to $10,000, from 1st July 2011 you can request the superfund refund the payment and have the amount taxed personally. This refund can occur only once.
Hillyer Riches is a specialist taxation accounting firm Melbourne, providing business advisory and superannuation services. For more information email firstname.lastname@example.org.
This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.
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