News & Information

Claiming a Tax Deduction on Personal Superannuation Contributions

July 13, 2018

During the 2016-17 budget reform announcement, the Federal Government announced changes to personal superannuation contributions.  This new change means individuals would no longer have to earn less than 10% of their income from salary and wages (or not have been employed during the financial year) to be eligible to claim a tax deduction. 

This tax deduction is potentially available to anyone who earns 10% or more of their income from employment for the first time. The intent of the change was motivated by the desire to create a more flexible superannuation system, allowing more Australians to use their concessional contribution cap. 

This valuable opportunity is a great way of encouraging Australians to put aside more money for their future. And it also opens up the doors for anyone who:

  • Is under the age of 75 and is eligible to contribute to their super fund
  • Has not met their concessional contribution cap
  • Has enough assessable income to be able to use the tax deduction

Claiming a tax deduction for personal superannuation contributions is also a way for individuals to reduce their taxable income and can provide a tax-effective way to:

  • Grow you super when a salary sacrifice arrangement isn’t available
  • Fund your insurance held within super
  • Save for a first home deposit

 With the end of the financial year fast approaching it’s important to start thinking of the potential benefits and the impact it could have on you, not only this financial year but also future years to come.

In order for you to be eligible to claim a tax deduction for a personal superannuation contribution you must:

  • Be under the age of 75
  • Make a personal contribution to a complying superannuation fund
  • Submit a Notice of Intent to Claim a Tax Deduction form, also know as the s290-170 form; it’s crucial that the form is submitted to the superannuation trustee in the required timeframe for the contribution to be claimed as a tax deduction
  • Receive from the trustee to which you’ve made the contribution that the notice of intent form has been received before you claim the tax deduction
  • Claim a tax deduction on your tax return for an amount that does not exceed the amount stated in the notice of intent

You should also note there are certain contributions which cannot be claimed as a deduction. They include:

  • A downsizer contribution
  • A contribution made to a Commonwealth public sector superannuation scheme in which you have a defined benefit interest
  • A contribution made to an untaxed fund
  • A contribution made by a minor, unless that income is a result of employment or carrying on a business
  • A CGT exempt amount contributed to super as required under the small business retirement exemption

 LifeTime Financial Group are specialist (holding appropriate accreditations) advisors who are ideally positioned to assist you in selecting and then managing your retirement funds.

Would you like to discuss your personal position further with one of our highly qualified financial planners? Why not call us today on 03 9596-7733.

There is no cost or obligation for our initial conversation/meeting.

Written by Adam Watts of LifeTime Financial Group. A leading privately owned Melbourne Financial Planning practice.