Tax Deduction for Personal Super Contributions

Prior to the end of the financial year, there is an opportunity to claim a significant tax deduction for contributions to taxpayers personal superannuation.

To ensure that the contributions are deductible, what do we need to consider?

Notice of intention to claim a tax deduction

To qualify and claim the deduction, a notice of intention must be received and accepted by the superannuation fund prior to the lodgement of the member's income tax return or 30 June of the year following, whichever occurs first.

In some circumstances it may be necessary to lodge a notice of intention earlier. If you have a member planning to rollover or withdraw their benefits or seeking to commence a pension, lodgement and acceptance of the notice must occur before these events take place.


In order for a contribution to be allocated in the current financial year payment must be received by the superannuation fund. This is important for ensuring deductibility and the allocation towards a members contribution cap in this financial year.

CAUTION: 30 June 2018 falls on a Saturday!  The timing of contributions is therefore crucial to ensure that they are received by the member's superannuation fund by no later than 29 June 2018.

Some superannuation funds have a cut off date just prior to the end of financial year to ensure that contributions received are processed and allocated in the current year. Please check with the relevant superannuation fund.

Also take into account the time required for electronic payments or transfers to be processed by the client's financial institution and received by the superannuation fund. Transfers within the same institution may not occur automatically or on the same day.

Contribution Caps

Caution is required to avoid excess contributions. Excess amounts are assessable at the members marginal tax rate, thus reducing the tax benefit obtained from the deduction claimed.

The concessional contribution cap for all members, regardless of age, reduced to $25,000 on 1 July 2017.

Do confirm employer contributions paid for the year to date. How frequently does the employer make its superannuation payments? Quarterly? Monthly?

Check the members superannuation statement for prior year contributions received in the current financial year. June contributions will generally be received by the superannuation fund in July (e.g. the following financial year).

Age Limitations

Don't forget the work test for members aged 65 years and over. This applies for member contributions whether concessional or non-concessional. To qualify the member needs to have been gainfully employed for at least 40 hours over 30 consecutive days in the financial year in which the contribution is made. The member will need to complete and provide a work test declaration to their superannuation fund.

Members aged 75 years and over are restricted to mandated contributions (typically employer superannuation guarantee payments) or qualifying downsizer contributions only. Additional personal contributions are not permitted even where the work test has been satisfied.


As always you need to contact A Grade Tax Penrith to discuss your personal situation in respect to the tax deductibility of contributions to superannuation.


Article courtesy of Legalwise News

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