What has changed?
In 2016–17, an individual (mainly those who are 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. This is known as the 10% maximum earnings condition.
From 1 July 2017, the 10% maximum earnings condition will be removed. This means most people under 75 years old will be able to claim a tax deduction for personal super contributions (including those aged 65 to 74 who meet the work test).
The intent of this change is to improve the flexibility of the super system so that more Australians can use their concessional contributions cap.
If you are a member of a Commonwealth public sector superannuation scheme, an untaxed fund such as a constitutionally protected fund (CPF), or certain funds that offer defined benefit interests, you will not be eligible to claim a deduction for contributions made to these funds. If you're a member of one of these funds and wish to claim a deduction, you can choose to make a personal super contribution to another eligible super fund.
Eligibility rules
You can claim a deduction for personal super contributions made on or after 1 July 2017 if:
you made the contribution to a complying super fund or a retirement savings account that is not a:
Commonwealth public sector superannuation scheme in which you have a defined benefit interest
CPF or other untaxed fund that would not include your contribution in its assessable income
super fund that notified the ATO before the start of the income year that they elected to treat all member contributions to
the super fund as non-deductible, or
the defined benefit interest within the fund as non-deductible
you meet the age restrictions
you notify your fund in writing of the amount you intend to claim as a deduction
your fund acknowledges your notice of intent to claim a deduction in writing.
Age restrictions
If you are under 18 years old at the end of the income year in which you made the contribution, you can only claim a deduction for your personal super contributions if you earned income as an employee or a business operator.
If you are 65–74 years old at the end of the income year in which you made the contribution, you still need to satisfy a work test in each financial year that you make a contribution to your fund and claim a deduction. To satisfy the work test, you must work at least 40 hours during a consecutive 30-day period each financial year for which you want to claim a deduction for a personal super contribution.
If you are 75 years old or older, you can only claim a deduction for contributions you made on or before the 28th day of the month following the month in which you turned 75.
Notice of intent
If you are eligible and want to claim a tax deduction, you need to complete a Notice of intent to claim a deduction form and send it to your fund within the required timeframe. You can get this from your fund or from our website.
You will need to receive an acknowledgment from your fund before you lodge your tax return for the relevant year. Then you can claim a deduction in your tax return for the contributions you made.
A notice of intent is only valid if you are still a member of your fund, your fund still holds the contribution, and your fund has not started paying a super income stream using any of the contribution.
If you give your fund a notice of intent after you have rolled over your entire super interest to another fund (closed your account) or withdrawn your entire super interest (paid it out of super as a lump sum), your notice will not be valid. This means you will not be able to claim a deduction for the personal contributions you made before the rollover or withdrawal.
If you have partially rolled over or withdrawn your super interest (which included the contribution you made), your notice will not be valid for the entire contribution. You can only validly deduct a proportion of your contribution that remains in the fund.
Concessional contributions cap
The contributions that you claim as a deduction will count towards your concessional contributions cap. If you exceed your cap, you will have to pay extra tax and any excess concessional contributions will count towards your non-concessional contributions cap.
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