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It is important
that SMSF trustees are aware of the rules
relating to contributions from members.
This is especially the case since May 2006
when many of the rules changed.
Employer contributions
The SIS Act allows super funds to accept
mandated employer contributions at any time.
Mandated employer contributions are typically
those made by an employer on behalf of a
fund member to:
- satisfy the employer's
superannuation guarantee (SGC) obligations;
- superannuation guarantee
shortfall components; or
- comply with an industrial
award or workplace agreement.
Personal contributions
Other contributions, such as the member's
own contributions, can also be accepted if
they satisfy the following criteria.
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Undeducted contribution limits
(e.g. from personal savings, sale
of an investment or business)
|
|
Age
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Period
|
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10/5/06
-
30/6/07
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1/7/07
-
30/6/08
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1/7/08
-
30/6/09
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1/7/09
-
30/6/10
|
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Under
65
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Up
to $1m
|
$150,000
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$150,000
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$150,000
|
|
Option
to contribute up to $450,000
|
|
Between
65
and 75
|
Up
to $1m provided work
test is satisfied
|
$150,000
provided work
test is satisfied
|
$150,000
provided work
test is satisfied
|
$150,000
provided work
test is satisfied
|
|
Age
75 and over
|
Not
able to contribute
|
Not
able to contribute
|
Not
able to contribute
|
Not
able to contribute
|
|
Deductible
contribution limits
(e.g. salary sacrifice contributions)
|
|
Age
|
Financial
Years
|
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2006/07
|
2007/08
- 2011/12
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2012/2013
onwards
|
|
Under
35
|
$15,260
|
$50,000
per year
|
$50,000
per year
|
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Between 35 and 49
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$42,385
|
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Between
50 and 65
|
$105,113
|
$100,000
per year
|
Between
65 and 70
|
$105,113
provided
work test is satisfied
|
$100,000
per year provided work test
is satisfied
|
$50,000
per year provided work test
is satisfied
|
Between
70 and 75
|
No
deduction available unless contributions
mandated under an employment contract
|
Age
75 and over
|
Not
able to
contribute
|
Not
able to
contribute
|
Not
able to
contribute
|
Eligible spouse contributions
Eligible spouse contributions may be accepted
at any time if the spouse is under tWorkhe
age of 65. If the spouse is aged between
65 and 70, eligible spouse contributions
may be accepted only if the receiving spouse
is at least gainfully employed on a part-time
basis. If the spouse is 70 or over, you
cannot accept eligible spouse contributions.
There is no age limit or employment test
for the person making the contribution.
Super Co-contributions
The Super Co-contribution assists eligible
low and middle income earners to save for
their retirement. The Super Co-contribution
commenced on 1 July 2003 and replaced the
superannuation tax offset for personal superannuation
contributions. From 1 July 2004, eligible
individuals can receive a Super Co-contribution
of up to $1,500 (previously $1,000) which
is normally paid to their superannuation
account. The Tax Office determines eligibility
for Super Co-contribution the based on information
from income tax returns and surcharge member
contributions statements.
In specie contributions
In specie contributions are contributions
to the fund in the form of an asset other
than money. SMSFs are generally prohibited
from intentionally acquiring assets (including
in specie contributions) from related parties
of the fund. The main exceptions to this
rule are listed securities and business
real property, which must be acquired at
arm’s length and at market value. There
are additional exceptions for in-house assets.
Work Test
A member meets the work test if they have
been gainfully employed for at least 40
hours in a period of not more than 30 consecutive
days in financial year.
A few points to note:
- The work test must
be met prior to the contribution being
made.
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