super contributions caps

Employees can make contributions to their super fund before any tax is paid on them, known as concessional contributions. They can also make non-concessional contributions after they have paid tax on the funds. However there are limits on the size of each kind of contribution, known as caps.

For people aged 50 years or over on 1 July 2014 the concessional contributions cap will be temporarily increased to $35,000.

The temporary higher cap is not indexed and will cease when the general concessional contributions cap is indexed to $35,000.

For people aged 49 years or younger on 1 July 2014 the concessional contributions cap will be $30,000. The non- concessional contributions cap is now $180,000 for eligible investors.

bring-forward rule

People under 65 may also be able to make non-concessional contributions of up to three times the new cap in any one year (or over a three-year period), known as the ‘bring-forward rule’. In response to the cap increases, the bring-forward cap has also risen to $540,000.

option to reduce excess contributions tax

Previously taxed at the highest marginal rate, excess contributions (and associated earnings) made after 1 July 2013 can now be completely or partially withdrawn and instead taxed at the investor’s usual marginal rate.

The federal government decided not to implement the proposed pension tax, originally intended to apply to pension earnings over $100,000.

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