Contribution caps

Concessional contribution caps

Broadly speaking, concessional contributions are money you invest in super that qualify for certain tax concessions. The two main types are:

• contributions made by your employer (including pre-tax ‘salary sacrifice’ and superannuation guarantee amounts), and
• personal contributions that can be claimed as a tax deduction (which can usually be made if you are self-employed or not employed).

The advantage of these contributions is you may pay less tax on your income and grow your retirement savings.

On 1 July this year, the cap on concessional super contributions was halved from:

• $50,000 to $25,000 pa (for people under age 50), and
• $100,000 to $50,000 pa (for people aged 50 or over).

Note: the concessional contribution cap was scheduled to reduce to $25,000 pa for people aged 50 or over from 1 July 2012. However, the Government has now proposed that the $50,000 cap be retained for people aged 50 or over who have a total super balance under $500,000.

Non-concessional contribution caps

Non-concessional contributions include personal after-tax super contributions and certain other amounts.

In 2009/10, the cap on these contributions is $150,000. But if you’re under age 65, it’s possible to contribute up to $450,000 in 2009/10, provided your total non-concessional contributions in this financial year, and the following two financial years, don’t exceed $450,000.