In the 2016-17 Federal Budget, the Government 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 cap will take into account all non-concessional contributions made on or after 1 July 2007. The ATO says the lifetime cap will be indexed to the Average Weekly Ordinary Time Earnings (AWOTE), increasing in $50,000 increments. The ATO notes that legislation is currently being developed for this measure.
If an individual has exceeded the cap prior to 7:30pm (AEST) on 3 May 2016, 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 7:30pm (AEST) on 3 May 2016 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, the ATO says.
Non-concessional contributions made into defined benefit accounts will be included in an individual’s lifetime non-concessional cap.
The ATO says if taxpayers need to know how much they have contributed into their super fund to ensure they don’t exceed the superannuation contribution caps, they should contact the ATO on 13 10 20.
Legislation and supporting material
- 2016-17 Budget Paper No 2External Link – Revenue Measures, page 27.
- Joint media releaseExternal Link issued on 3 May 2016 by the Treasurer and Minister for Small Business and Assistant Treasurer.
[ATO website] [LTN 139, 21/7/16]