Q: Are the caps relating to ‘concessional’ and ‘non-concessional’ contributions regarded as separate? Put simply, can I contribute $50,000 concessional and $450,000 non-concessional sums (a total contribution of $500,000) to my super fund for the 2010/2011 year?
A: ‘Yes’ is the answer to the first part of the question. The
‘Yes’ can also be the answer to the second part of the question (can I contribute $50,000 concessional and $450,000 non-concessional), assuming you are aged 50 or over. I explain the two contributions caps elsewhere on the site (Super concessional contributions: 2010/2011 survival guide and Your 2010/2011 guide to non-concessional (after-tax) contributions), but briefly, assuming an individual is aged 50 or over, he can make up to $50,000 in concessional (before-tax) contributions each year until June 2012. (Based on policy changes announced by the Labor Government, the $50,000 cap for over-50s is expected to extend beyond July 2012, subject to certain conditions.)
Note: Any contributions in excess of this concessional (before-tax) cap are subject to excess
If an individual is under the age of 50, then the concessional contributions cap is $25,000 for the 2010/2011 year. The $25,000 cap will be indexed in $5,000 increments in line with increases in Average Weekly Ordinary Times Earnings. The $50,000 transitional cap for over-50s is not indexed (although this is likely to change if the higher cap for over-50s becomes permanent – refer earlier).
The non-concessional contributions cap is $150,000 (for 2010/2011 year) and up to $450,000 when taking advantage of the ‘bring-forward’ rule. The non-concessional (after-tax) bring-forward rule applies to individuals under the age of 65: if an individual is 65 or over, he or she can only make after-tax contributions of up to $150,000 each year rather than $450,000 over a three-year period (which is available to those under the age of 65).
The rules outlined above mean that an individual aged 50 or over can make a total of $200,000 in
If you’re aged 50 or over, you can potentially make $500,000 in super contributions (for the 2010/2011 year) in one year and stay within your contributions caps. A couple, aged 50 or over, could potentially contribute a combined $1 million in one year (for the 2010/2011 year).
Prior to 1 July 2009, the income test that was applied to the Government's co-contribution scheme was identical to the income test applied in respect of tax deductible (member) contributions (namely, Assessable income from eligible employment plus reportable fringe benefits). From 1 July 2009, salary sacrificed super contributions count towards the co-contribution income test. Was there a similar change made in relation to the income test that applies to concessional contributions in the form of member tax deductible contributions. My understanding is that the income test applicable to tax deductible (member) contributions is that the member's assessable income plus reportable fringe benefits from eligible employment must be less than 10% of their total assessable income from all source. Is that still the case after 1 July 2009?
Hi Stephen – I’ve answered your question here.
http://www.superguide.com.au/boost-your-superannuation/tax-deductible-contributions-10-percent-income-test
Regards
Trish