Current enacted legislation

Concessional contributions

  • The excess contributions are subject to the top marginal tax rate of 46.5% (including Medicare Levy)
  • The excess contributions tax relief only applied if you had exceeded your concessional contributions cap by $10,000 or less.
  • The relief only applied to first-time breaches.
  • You only received a once only offer to have the excess concessional contributions refunded to you and assessed at your marginal tax rate, rather than pay excess contributions tax.

Non concessional contribution

  • 46.5% penalty is imposed on the individual rather than the super fund
  • Can elect to withdraw an amount equal to the tax liability from their super fund to fund the payment
  • An amount can be returned in the limited circumstances outlined in regulation 7.04 of the SIS Regulations. That is, where one of the contribution standards is not met.

Proposed legislation

Effective 1 July 2013

Concessional contributions

  • No longer subject to excess contributions tax
  • Excess amount will be included as assessable income in the individual tax return and taxed at marginal tax rate
  • Pay excess concessional contributions (ECC) charge on the increase in your tax liability
  • A 15% tax offset will be available for contribution tax already paid
  • Can elect to withdraw up to 85% of the ECC to help pay the income tax assessment
  • No more excess contributions tax relief available

Non concessional contribution

  • As part of the 2014 -15 Federal Budget, member with excess non concessional contributions will be allowed to withdraw the excess contributions and associated earnings.
  • As a result, member will not be subject to the excess non-concessional contributions tax but will be taxed on the associated earning at their marginal rate.
  • An amount can be returned in the limited circumstances outlined in regulation 7.04 of the SIS Regulations. That is, where one of the contribution standards is not met.