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Personal super contributions deduction

  • Updated

Currently an individual (primarily self-employed) can claim a deduction for personal super contributions where they meet certain conditions. One of these conditions is that less than 10% of their income is from salary and wages.

From 1 July 2017, this condition will be removed. The remaining conditions remain the same.

 

Summary

This measure removes the requirement in the income tax law that an individual must earn less than 10 per cent of their income from employment-related activities to be able to deduct a personal contribution to superannuation making it a concessional contribution.

NEW LAW
CURRENT LAW
  • An individual is able to deduct personal contributions, making these contributions concessional contributions, regardless of whether they earn 10 per cent or more of their total income from employment or related activities.
  • Other restrictions apply to limit when an individual can deduct personal superannuation contributions, including new restrictions on deducting contributions to certain defined benefit superannuation funds and contributions that are not included in the taxable income of the superannuation fund.
  • An individual is not able to deduct personal contributions if 10 per cent or more of their total income is from employment or related activities.
  • Other restrictions apply to limit when an individual can deduct personal superannuation contributions.

Changes to Simple Fund 360

 Reports: It is expected that changes will need to be made to the information on the notice of intent to claim forms and acknowledgement letters (Deductions Notice (s.290-170).

Further References

  1. Federal Register of Legislation
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