- Annual after-tax contributions cap to remain, but cut by nearly half
- How will the new non-concessional contributions cap work?
- What if I triggered the bring-forward during the 2016/2017 financial year?
- How does my ‘total superannuation balance’ affect my non-concessional contributions?
- How is my ‘total superannuation balance’ measured for the purposes of making NCCs?
- How does the bring-forward rule relate to my ‘total superannuation balance’?
- When and how does the bring-forward rule apply (from 2017/2018 year)?
- For more information…
- Next time, consult first and listen to the people Treasurer Morrison
- What information is available on the old lifetime $500,000 cap?
- Were there any exceptions allowed outside the lifetime $500,000 cap?
- What happens if I had made my non-concessional contributions anyway, based on the old rules?
- What did the ATO say about the proposed $500,000 lifetime cap?
- How was the ATO assisting taxpayers making NCCs, and who tried to comply with the new rules?
On 15 September 2016, Treasurer Scott Morrison and Minister for Revenue and Financial Services Kelly Dwyer issued a joint media release announcing that the proposed $500,000 lifetime cap on non-concessional contributions (which was to take retrospective effect from 3 May 2016) is now scrapped as a policy and will be replaced with an annual $100,000 cap, taking effect from 1 July 2017. (You can find out more about the scrapped policy at the end of this article.)
The annual $100,000 non-concessional contributions cap and the maximum $300,000 bring-forward cap became law on 29 November 2016 (passed both houses of parliament on 23 November 2016, and received royal assent on 29 November 2016), and applies from 1 July 2017.
Continue reading this article to find out more about the changes to the non-concessional contributions rules taking effect from 1 July 2017.
The current $180,000 after-tax cap, and the 3-year $540,000 bring-forward cap remains in place until 30 June 2017 (for more information on the current non-concessional contributions caps, see SuperGuide article Your 2016/2017 guide to non-concessional (after-tax) contributions )
From 1 July 2017, the annual non-concessional (after-tax) contributions cap will always be 4 times the concessional (before-tax) contributions cap. The new $100,000 NCC cap will be indexed in $10,000 increments in line with the $25,000 concessional (before-tax) cap, which will be indexed in $2500 increments, and which will also take effect from 1 July 2017. (For information on the $25,000 concessional contributions cap, see SuperGuide article Concessional contributions caps to be slashed from July 2017.)
Annual after-tax contributions cap to remain, but cut by nearly half
Although you may be jumping up and down with glee that your after-tax contribution plans for the 2016/2017 year are now back on track (with the scrapping of the $500,000 lifetime limit), note that the post-July 2017 annual non-concessional contributions cap ($100,000) taking effect from 1 July 2017 is a lot lower than the 2016/2017 annual cap ($180,000). Further, an additional limit may stall your retirement plans.
The simple explanation is that from 1 July 2017, the annual non-concessional contributions cap will drop to $100,000, and the maximum bring-forward cap will be $300,000. The complicating factor is that taking effect from 1 July 2017, individuals with a total superannuation balance of more than $1.6 million will no longer be eligible to make non-concessional contributions. Finito!
If you have under $1.6 million in super, then from 1 July 2017, you can make up to $100,000 a year in non-concessional contributions. Further, assuming you are under the age of 65, and your total superannuation balance is less than $1.4 million (explained later in the article), you can even bring forward 3 years’ worth of the annual cap.
In other words, from July 2017, it will be possible for an Australian under the age of 65 to make up to $300,000 in non-concessional contributions in one year (representing the cap for 3 years), subject to having less than $1.4 million in super.
Confused? What happened to the $1.6 million total super savings threshold restricting Australians from making non-concessional contributions? When did it drop to $1.4 million? Yes, the inexperienced government, and perhaps agenda-driven treasury advisers, have now made it a very complicated process to make non-concessional contributions. All Australians will now have to regularly monitor their total superannuation balance, even if they have nowhere near $1.6 million, or $1.4 million in super savings.
The government’s rationale for cutting the annual NCC cap and introducing an upper threshold is set out in the explanatory memorandum (Chapter 5) accompanying the legislation: “By reducing the annual non-concessional caps and restricting their use to those with balances less than the general transfer balance cap [$1.6 million], this measure will better target the tax concessions. This will encourage those with aspirations to build their superannuation balance up to an amount equal to the general transfer balance cap, while retaining the flexibility to accommodate lump sum contributions from one-off events such as receiving an inheritance or selling a large asset”.
I explain the $1.6 million ‘total superannuation balance’ threshold for making NCCs (and the $1.5 million and $1.4 million thresholds) later in the article, but in the next section I explain the basic rules for how the non-concessional contributions cap will apply from 1 July 2017.
Important: The current $180,000 non-concessional cap, and the 3-year $540,000 bring-forward cap will remain until 30 June 2017 (for the 2016/2017 year).
Super alert! After-tax contributions to defined benefit schemes and constitutionally protected funds will also be subject to the reduced non-concessional caps.
Note: According to earlier explanatory materials, the additional CGT cap of $1.415 million for eligible small business owners will remain in place before and after July 2017, and will not be counted towards the annual non-concessional cap. I could not find any mention of this in the final explanatory memorandum, but I assume the CGT cap will still be available from July 2017. We will update this paragraph when we have definitive confirmation.
How will the new non-concessional contributions cap work?
The lower annual NCC cap of $100,000, applicable from July 2017, will operate under similar rules to what is in place for the 2016/2017 cap ($180,000), except anyone who has a total superannuation balance of more than $1.6 million will not be able to make NCCs from July 2017.
The bring-forward rule that applies for the 2016/2017 year, allows an individual to bring forward up to 2 years’ worth of the annual cap, which then covers a 3-year period ($540,000). The bring-forward rule also applies from July 2017, but you will have a maximum bring-forward cap of $300,000 (for the 3-year period), and with more restrictive elements. In particular, a bring forward is not available for those with a total superannuation balance of more than $1.5 million, and a restricted bring forward is available for those with a total superannuation balance of more than $1.4 million. More on these savings thresholds and the meaning of your ‘total superannuation balance’, later in the article.
What if I triggered the bring-forward during the 2016/2017 financial year?
Transitional arrangements will apply for Australians who are in the middle of a bring-forward arrangement, that is, the bring-forward rule was activated in the 2015/2016 or 2016/2017 years (for information on how the bring-forward rules currently work, see SuperGuide article Bring-forward rule: 10 super facts you should know).
Quoting from the explanatory memorandum (Chapter 5), “Where an individual triggered their bring forward period in the 2015-16 financial year, their non-concessional contributions caps for the first (2015-16) and second (2016-17) years are set by the rules that applied to those financial years. However, the cap for the third year (2017-18) will be set by transitional rules put in place by [Schedule 3 of the Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016]”.
On 1 July 2017, the remaining bring-forward amount will be reassessed to reflect the new annual NCC cap.
What this means is that an individual can trigger the bring-forward rule during the 2016/2017 year (assuming under the age of 65) and make up to $540,000 in NCC for the 2016/2017 year, and comply with the NCC rules. If the individual does not fully utilise the $540,000 cap during the 2016/2017 year, then the maximum bring-forward cap will fall to reflect the drop in the annual NCC cap from July 2017.
Further, from July 2017, the individual also will be subject to the total superannuation balance threshold, and if his total superannuation balance exceeds the $1.6 million threshold for the 2017/2018 year, his bring forward cap drops to nil.
Example: Joseph makes a $200,000 NCC during 2016/2017 year
If Joseph made a NCC of $200,000 during the 2016/2017 year, he triggers the bring-forward rule. Due to the drop in the annual NCC cap from July 2017, his maximum bring-forward cap for the remaining 2 years of the bring-forward period is $180,000 (that is $180,000 + $100,000 + $100,000 less $200,000). If Joseph had triggered the bring-forward rule during the 2015/2016 financial year with a $200,000 NCC, and then made a $120,000 NCC during the 2016/2017 year, his maximum bring-forward cap for the 2017/2018 year would be $140,000 ($180,000 + $180,000 + $100,000 less $200,000 less $120,000), assuming his total superannuation balance is less than $1.6 million.
The explanatory memorandum accompanying the legislation provides the following example (Molly) of the transitional provisions, set out below. We have reworded the original example.
Example: Molly contributes $250,000 in September 2016
Molly is 40 and has a total superannuation balance of $200,000 as at 30 June 2016. In September 2016, she receives an inheritance of $250,000, and makes a $250,000 non-concessional contribution into her super fund account. This super contribution triggers her three-year bring forward, which is $540,000 (until 30 June 2017). From 1 July 2017, Molly’s bring-forward cap has now been lowered, due to the lowering of the annual NCC cap. Rather than a remaining bring-forward cap of $290,000 ($540,000 less $250,000), Molly can only make further non-concessional contribution of $130,000 ($180,000 + $100,000 + $100,000 less $250,000). She chooses to make a NCC of $110,000 during the 2017/2018 financial year, and $20,000 during the 2018/2019 financial year. From the 2019/2020 financial year, Molly can then access the new bring forward, and contribute up to $300,000 in non-concessional contributions, assuming her total superannuation balance is less than $1.4 million (or the higher indexed amount at that time).
How does my ‘total superannuation balance’ affect my non-concessional contributions?
The ‘total superannuation balance’ restriction on non-concessional contributions (NCCs) is that anyone with more than $1.6 million in super will not be able to make non-concessional contributions, and nor can they make non-concessional contributions that would mean they exceeded the $1.6 million amount in super (although there is slight movement on this rule, which I will explain later in this section).
Quoting from the explanatory memorandum (Chapter 5) accompanying the legislation, “If an individua’s total superannuation balance as at 30 June of the previous financial year, is equal to or greater than the general transfer balance cap in the relevant financial year ($1.6 million in the 2017-18 financial year), they are not eligible for any non-concessional contributions cap in that financial year. This eligibility criterion applies in every year of an individual’s bring forward period.”.
Note: The $1.6 million ‘total superannuation balance’ threshold for making non-concessional contributions will be based on an individual’s balance as at 30 June of the previous financial year, although there is a transitional measure for the first year of implementation (2017/2018 year). See next paragraph for this alternative calculation.
In an earlier version of this article, I assumed this ‘total superannuation balance’ measure would mean for example, that if you plan to make non-concessional contributions in March 2018, then the superannuation account balance will need to be measured as at 30 June 2017. Using another example, if you plan to make an after-tax super contribution in July 2017, then the $1.6 million threshold will need to be measured as at 30 June 2017. Considering the term ‘total superannuation balance’ won’t legally exist for the purposes of this measure until 1 July 2017, then taking such an approach would require some legal magic by the government. In light of this difficulty, the new laws have an alternative calculation for your ‘total superannuation balance’ on 30 June 2017: “the calculation of an individual’s transfer balance is based on the sum of credits to their transfer balance account just after the start of 1 July 2017 less the sum of certain debits to their transfer balance account on 1 July 2017”.
In my view, the government should scrap the $1.6 million ‘total superannuation balance’ threshold for making non-concessional contributions. It is overly complicated. The administration of the total super balance applies to everyone regardless of how much super they have, and I believe the huge costs in administering the rule (and it will hit all fund members) will outweigh the revenue generated by introducing the threshold.
Super alert! From 1 July 2017, an individual will not be eligible for government co-contributions if his or her non-concessional contributions exceed his or her annual non-concessional cap, OR if, at 30 June of the previous financial year, his or her total superannuation balance equals or exceeds the general transfer balance cap amount ($1.6 million). Currently, and until 30 June 2017, the size of your super account balances does not affect your co-contribution eligibility (for more information on the current co-contribution rules, see SuperGuide article Cashing in on the co-contribution rules (2016/2017 year).
How is my ‘total superannuation balance’ measured for the purposes of making NCCs?
The term ‘total superannuation balance’ is used to measure a person’s superannuation savings for two main purposes under the new super rules:
- Ability to make non-concessional contributions, and in turn eligibility to receive government co-contributions.
- Ability to make catch-up concessional contributions (see SuperGuide article https://www.superguide.com.au/boost-your-superannuation/super-catch-up-concessional-contributions).
Note: A related threshold, but measured differently, is the $1.6 million general transfer balance cap, which is a limit on how much superannuation you can transfer into retirement phase, and in turn limits the amount of super savings that can enjoy tax exempt earnings. The total superannuation balance threshold of $1.6 million is indexed in line with the $1.6 million general transfer balance cap (for information on the $1.6 million transfer balance pension cap, including indexation, see SuperGuide article Burden for retirees: Monitoring $1.6 million transfer balance cap).
The definition of ‘total superannuation balance’ is complicated but essentially includes all of your super accounts, including inactive ones, and the definition is set out below (and this explanation is replicated in the SuperGuide article Super opportunity: Catch-up concessional contributions from July 2018).
According to the explanatory memorandum accompanying the new legislation, an individual’s total superannuation balance at a particular time includes the following three items:
- The value of all superannuation interests in accumulation phase (that is, all super interests not in pension phase)
- The balance of a person’s transfer balance account (generally commencement value of a superannuation pension), adjusted to reflect the current value of account-based pension interests in retirement phase (pension phase)
- ‘In transit’ rolled over superannuation benefits (that are not yet reflected in the balances mentioned in the previous two bullets).
The sum of these amounts is then reduced by the sum of any structured settlement contributions (if applicable, which relate to compensation payments resulting from serious injury and income loss that are rolled over into super).
Warning: Apparently the government is going to hold you responsible for knowing what your total superannuation balance is each year. Continue reading to discover more information about the three components that make up your total superannuation balance.
1. Accumulation phase value of a superannuation interest
According to the explanatory memorandum (Chapter 5), the default rule for calculating the accumulation phase value of an individual’s superannuation interest at a specific time, is “the total amount of superannuation benefits that would become payable if the individual voluntarily caused the interest to cease at that time. Otherwise the accumulation phase value is the value of the superannuation interest as set out in the Income Tax Assessment Regulations 1997”.
If you have a single interest in a super fund, then this value will be your ‘withdrawal benefit’ amount. If you have more than one interest in a super fund (such as a right to a defined benefit pension on resignation), then only the accumulation account balance is counted towards this first limb of the total superannuation balance.
If you have accumulation phase interests in more than one super fund, you include the combined amount of all of these interests in this first limb/component.
2. Retirement phase value, or pension phase value (transfer balance account)
The second component of the ‘total superannuation balance’ is the retirement phase value, or pension phase value (that is, the balance of an individual’s transfer balance account), which is generally going to be the commencement value of a superannuation pension. The transfer balance account is the net amount of capital an individual has transferred to pension phase, and may be adjusted to reflect the current value of account-based superannuation interests in pension phase.
Not clear enough? Blame Treasurer Scott Morrison for introducing this ridiculously complicated total superannuation balance threshold for taking advantage of the non-concessional contributions rules (and also for taking advantage of the catch-up concessional contributions provisions).
Note: The transfer balance account is already required to be calculated by super funds to comply with the $1.6 million transfer balance cap rules (for background on this policy see SuperGuide article Burden on retirees: Monitoring the $1.6 million transfer balance cap).
3. Rollover superannuation benefit
The third limb of the total superannuation balance definition is any rollover super benefits that a person has arranged to be transferred, and at year-end, does not yet appear in the accumulation phase value or in the balance of the transfer balance account. This is a catch-all limb to ensure that any rollovers at the end of the financial year are included in the calculation.
How does the bring-forward rule relate to my ‘total superannuation balance’?
From 1 July 2017, your total superannuation balance will determine whether you can make non-concessional contributions, and whether you can take advantage of the bring-forward rules, and also how large your bring-forward cap will be.
If your total superannuation balance is $1.6 million or more (applicable for the 2017/2018 year), you cannot make non-concessional contributions (NCCs) for the 2017/2018 year, and in turn, you cannot take advantage of the bring-forward rule.
Table 1 below summarises the bring-forward rules applicable from 1 July 2017.
If your total superannuation balance (TSB) is less than $1.4 million on 30 June 2017, then you can make non-concessional contributions (NCCs), and you can take advantage of the maximum bring-forward cap of $300,000, and your bring-forward period is 3 years.
If your TSB is $1.4 million or more, but less than $1.5 million, then your maximum bring-forward cap is $200,000 and your bring-forward period is 2 years.
If your total superannuation balance is $1.5 million or more but less than $1.6 million, then you can only take advantage of the annual NCC of $100,000. You have no bring-forward cap.
When and how does the bring-forward rule apply (from 2017/2018 year)?
|Total superannuation balance on 30 June 2017||Non-concessional contributions cap for the first year||Bring-forward period|
|Less than $1.4 million||$300,000||3 years|
|$1.4 million to less than $1.5 million||$200,000||2 years|
|2a3005A||$100,000||No bring-forward period, general NCC cap applies|
|$1.6 million or more||Nil||n/a|
Source: Adapted from Explanatory Memorandum accompanying the Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016 .
For more information…
For information on how the current non-concessional contributions rules operate, and the bring-forward rules operate, that is, for the 2016/2017 financial year, see SuperGuide articles Your 2016/2017 guide to non-concessional (after-tax) contributions and Bring-forward rule: 10 super facts you should know.
For a summary of the changes to the non-concessional contributions rules from 1 July 2017, see SuperGuide article Non-concessional contributions: 10 facts about new $100,000 cap. For a summary of all super changes taking effect from 1 July 2017, see SuperGuide article Super changes (July 2017): Planning ahead for the 2017/2018 year.
For background information on how the new non-concessional contributions cap came about, continue reading this article.
Next time, consult first and listen to the people Treasurer Morrison
On 3 May 2016, as part of the 2016 Federal Budget, federal treasurer Scott Morrison mucked up the retirement plans of countless Australians when he announced an immediate cut to the non-concessional (after-tax) contributions cap, taking effect from 7.30pm on 3 May 2016 (subject to legislation).
Effective from 7.30pm on 3 May 2016, the Coalition government planned to introduce a $500,000 lifetime non-concessional contributions cap (subject to legislation), and this lifetime cap would take into account all non-concessional contributions made on or after 1 July 2007 (that is, 10 years ago). The lifetime $500,000 cap was to be indexed annually in line with average weekly ordinary time earnings, in $50,000 increments.
On 15 September 2016, the federal government announced that the proposed $500,000 lifetime cap on non-concessional contributions was now scrapped, and would be replaced with an annual $100,000 non-concessional cap (now law). The start date for the annual non-concessional cap is 1 July 2017, which means the $180,000 annual non-concessional cap remains in place until 30 June 2017, and the bring-forward rule allowing up to $540,000 in non-concessional contributions, also remains in place until 30 June 2017.
Although the new proposed cap has implementation and administrative issues and is far too restrictive, the new version of the non-concessional contributions cap has redressed the retrospective issues. As I have stated before on this website, the lifetime cap was too low, and too inflexible.
I also commented that without doubt it should not be retrospective, and the parliament should consider scrapping it. Until 15 September 2016, we were already 4 months into a superannuation policy that had no legislative basis (and minimal additional information since the 2016 Federal Budget was announced in May). The retrospective $500,000 lifetime cap had already affected the super plans of Australians for previous financial years, in particular the 2015/2016 year, and also the current 2016/2017 financial year.
I also stated in August 2016: “Let’s see what time, consultation and political pressure does to a bad superannuation policy, and to the career of an ambitious politician who has again failed to properly consult with his party, the parliament, the super industry and his employer — the Australian public”.
Treasurer Scott Morrison (when he was Minister for Social Services) is also responsible for the January 2017 changes to the Age Pension assets test that have detrimentally affected more than 300,000 Australian retirees (for information on this Age Pension change, that was also introduced without consultation with the Australian public, see SuperGuide article Age Pension: 330,000 Australians lose entitlements since January 2017).
What information is available on the old lifetime $500,000 cap?
The planned introduction of a $500,000 lifetime cap (now scrapped) was a shock change to the non-concessional caps, and would have been financially disruptive to many Australians who may have been in the process of planning significant non-concessional contributions under the old rules. This $500,000 lifetime cap was particularly shocking considering that under the rules that were in place until 3 May 2016 (and now continue to apply for the 2015/2016 and 2016/2017 years), an individual under the age of 65 could make up to $540,000 in non-concessional contributions over a 3-year period.
Be clear: The lifetime concessional cap of $500,000 was to replace the existing annual cap, which had allowed an individual to contribute up to $180,000 a year in non-concessional contributions (or if under the age of 65, up to $540,000 over three years).
On 12 May 2016, the ATO published further information on this measure, which we have included later in this article. On 24 May 2016, the ATO also announced a special service for accountants and advisers who need urgent information on the amount of non-concessional contributions made by their clients (we explain this service at the end of this article, and the fine-tuning of this service, which was announced on 15 August 2016). The special ATO service is now redundant considering the government has reverted to an annual non-concessional cap, and an upper limit based on the size of a person’s super balance.
Were there any exceptions allowed outside the lifetime $500,000 cap?
True to Treasurer Morrison’s recent form, following his May 2016 announcement of this ill-considered NCC policy, he was causing further confusion by suggesting (but not being specific) there may be ‘life event’ exceptions to the $500,000 lifetime cap. Exceptions may have included the event of divorce or inheritance, or if a contractual commitment was in place before the announcement (for example, SMSF property purchase). Apparently he was doing extensive consultation with his fellow MPs about these life events: perhaps this consultation should have taken place before he announced this questionable policy to the world.
Small business CGT contributions cap still applied: In the superannuation Q&A fact sheet accompanying the 2016 Federal Budget papers, the government made it clear that the small business capital gains tax (CGT) exemption continues to apply, in addition to the $500,000 lifetime cap. Quoting from the fact sheet:
Eligible small business owners can make superannuation contributions that do not count towards their non-concessional contributions cap where the contribution is the proceeds from the disposal of a CGT asset that is exempt from CGT under the 15-year exemption or the retirement exemption:
- The 15-year exemption – which currently allows the maximum contribution of $1.395 million [for 2015/2016 year, and $1.415 million for 2016/2017 year] where it is an active asset that has been owned continuously for 15 year[s] and the owner is over 55 years of age; and
- The retirement exemption – which allows lifetime maximum contributions of $500,000
These two exemptions cannot currently exceed the cumulative total of $1.395 million [for 2015/2016 year, and $1.415 million for 2016/2017 year]
What happens if I had made my non-concessional contributions anyway, based on the old rules?
I cannot answer this question specifically, but apparently some Australians were taking a punt and continuing on as business as usual, either because they believe the ALP combined with independent parliamentarians would veto the proposed lifetime cap, or because they believed the final legislation would be fairer, or because the possible penalties were worth the risk.
According to the ATO (before legislation was drafted and with no legislative authority), if an individual made non-concessional contributions after commencement of the legislation (which was never drafted) and that caused them to exceed their cap, the ATO would notify them to withdraw the excess from their super account. If they don’t withdraw the amounts, the excess contributions would then be subject to the current excess contributions rules (for information on those rules see SuperGuide article Excess contributions rules: A quick summary). Thankfully, Australian taxpayers will no longer have to face this dilemma since the government has scrapped the $500,000 lifetime cap.
Note: The ATO information set out in the next section does not state that an individual would have been penalised for making the super contribution, but that he or she would have been penalised if the contribution was not withdrawn after the individual received a notice from the ATO to withdraw the amount. Without legislation, it was very unclear and very unfair for retirement planning to be a punt, and the federal government and the ATO needed to provide more detailed information on this measure. Again, thankfully, the retrospective $500,000 lifetime NCC has now been scrapped.
What did the ATO say about the proposed $500,000 lifetime cap?
On 12 May 2016, the Australian Tax Office published some information on this now scrapped policy (which has since been integrated into another ATO website page): for completeness, we have reproduced the original text in full below.
Introduce a lifetime cap on non-concessional superannuation contributions
On 9 May 2016 the Australian Government assumed a caretaker role. The continuation of this measure will be a matter for the incoming government to decide.
In the 2016-17 Budget it was announced that from 7.30pm (AEST) on 3 May 2016 there will be a lifetime cap of $500,000 on non-concessional superannuation contributions.
The lifetime cap will take into account all non-concessional contributions made on or after 1 July 2007.
The lifetime cap will be indexed to the Average Weekly Ordinary Time Earnings (AWOTE), increasing in $50,000 increments.
If an individual has exceeded the cap prior to commencement, they will be taken to have used up their lifetime cap but will not be required to take the excess out of the superannuation system.
If an individual makes contributions after commencement that causes them to exceed their cap they will be notified by the ATO to withdraw the excess from their superannuation account.
Individuals who choose not to withdraw the excess amount will be subject to the current penalty arrangements.
Non-concessional contributions made into defined benefit accounts will be included in an individual’s lifetime non-concessional cap.
Legislation and supporting material
- Legislation is currently being developed for this measure.
How was the ATO assisting taxpayers making NCCs, and who tried to comply with the new rules?
The ATO had not yet introduced measures to help individual taxpayers with queries about non-concessional contributions made since 1 July 2007. The ATO had however introduced mechanisms to assist taxpayers who use an accountant or financial adviser.
On 24 May 2016, the ATO published information inviting accountants and advisers to contact the ATO if they needed urgent information about a client’s non-concessional contributions for the 2015/2016 year. The ATO stated “We aim to simplify the calculation process before 1 July 2016. To help us provide information within a few business days to those with a critical need we ask that you prioritise your clients’ requests. We ask that you lodge requests for more than ten clients via the Tax Agent Portal using portal mail – select topic ‘Superannuation’ and ‘other’.”
The ATO manually calculated a person’s non-concessional contributions made since 1 July 2007, assuming that the person had met their lodgement obligations from 1 July 2007 through to 30 June 2015.
On 15 August 2016, the ATO announced that from late August 2016, the Tax Agent Portal will have a new portal mail topic called ‘NCC balance’. The ATO reports that tax agents can use this mail topic to request reported non-concessional contributions for clients. According to the ATO, tax agents will be able to “request balances for a specific list of clients or for all clients. The new mail topic makes requesting and processing balances easier and quicker”.
This ATO service will no longer be needed, although we may need the ATO’s assistance to track total superannuation balances under the new NCC rules announced on 15 September 2016, and which became law on 29 November 2016, and which take effect from 1 July 2017.