Last week saw a number of Bills pass through the Senate in a last ditch effort, in what was Parliament’s last sitting before the federal election. One of the Bills that was passed and now awaits royal assent, is the legislation increasing the concessional (tax deductible) super contributions for older Australians. For the 2013/2014 financial year individuals aged 60 years and over will be eligible to contribute up to $35,000 of concessional super, while For the 2014/15 year onwards this limit will apply to those aged 50 years and over.
The Bill also increases the tax rate on concessional contributions for taxpayers whose income plus concessionally taxed contributions exceeds $300,000. Where this is the case the individual will be liable for a 15% tax on their taxable contributions in the fund. The tax is paid by the individual in their personal income tax return. This applies to contributions made to super from 1st July 2012.