Update: note the potential changes announced in the 2016 Budget.
For the 2016/17 financial year the amount of the superannuation Concessional Contributions cap depends on the age of the member:
- For people who were at least 49 years of age on 30 June 2016 the cap is $ 35,000
- For other people the cap is $ 30,000
These are the same caps that applied in 2014/15 and 2015/16 (though with a different date for determining access to the $35,000 cap – see below) as wages growth has not been sufficient to trigger indexation.
Note that not everyone, even if they had sufficient funds, would be able to contribute up to the full Concessional Contributions cap – for example employees can be restricted, under the 10% rule, from making personal concessional contributions, and if they’re employer didn’t allow salary sacrificing super contributions they may not be able to contribute up to the maximum Concessional Contributions cap. Also people are restricted in the kinds of super contributions they can make based on age – for example people aged 75 and over can’t make personal super contributions.
What determines the Concessional Contributions Cap?
The Concessional Contributions Cap is currently set by s292.20 of the Income Tax Assessment Act 1997 (ITAA 97). This section sets the Concessional Contributions Cap at $ 25,000 for the 2013/14 financial year, with the cap for 2014/15 and later years to be determined by indexation under subdivision 960 M. For 2014/15 the Concessional Contributions Cap was indexed by one $ 5,000 increment to $ 30,000.
Is there a higher Concessional Contributions cap for older Australians?
However the higher Concessional Contributions Cap applying to older people is set by a different piece of legislation – s291.20 of the Income Tax (Transitional Provisions) Act 1997. This section introduced a higher concessional cap for people aged 59 or over on 30 June 2013 for the 2013/14 financial year, and for subsequent years for people aged 49 or over on the last day of the previous financial year. However the indexation of the general Concessional Contributions cap is expected to make this provision redundant in the future – as the general cap is indexed and the s291.20 cap is not.
|Financial year||Concessional Contributions Cap – Over 49||Concessional Contributions Cap – Over 59|
|2013/14||General Cap, i.e. $ 25,000||$ 35,000|
|2014/15||$ 35,000||$ 35,000|
|2015/16||$ 35,000||$ 35,000|
|2016/17||$ 35,000||$ 35,000|
How much has the Concessional Contributions cap changed?
The general trend for Concessional Contributions has been down, with many changes to decrease the cap, freeze indexation, and remove higher caps applying to older people.
*Includes double concessional contributions cap for those aged over 50 and higher caps for those aged over 59 and aged over 49.
How much was the Concessional Contribution Cap in prior years?
For many people these were the maximum Concessional Contribution caps – depending on the financial year.
|Financial year||Concessional Contributions Cap|
However, there was a higher rate of the contribution cap applying for people over 50 from the 2007/08 financial year until 2011/12. For 2012/13 everyone was on the $ 25,000 cap. Different rules applied from 2013/14, as set out above.
|Financial year||Concessional Contributions Cap – Over 50|
You may also find the article Did freezing indexation of the contribution caps change anything? interesting.
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