Changes to the $25,000 Superannuation Concessional Contribution Cap

The Government has proposed the introduction of an annual (unindexed) concessional contribution cap of $35,000 that will apply to taxpayers who meet certain age requirements.

Under this announcement, taxpayers who are 60 years and over from 1 July 2013 (ie; the 2014 income year) will be eligible to claim the new $35,000 concessional contribution cap.

From 1 July 2014 (ie the 2015 income year) taxpayers aged 50 and over will also be eligible for the $35,000 concessional contribution cap.

Under the concessional contribution caps that applied for the 2012 income year, a taxpayer was eligible for the $50,000 concessional cap as long as they were at least 50 years of age during the 2012 year (i.e. they turned 50 during the financial year 1 July 2011 and 30 June 2012).

There has been no clarification from the Government regarding whether the taxpayer needs to satisfy the age requirement as at 1 July 2013 or will they just need to reach the minimum age requirement sometime during the income year in question is yet to be made.

With no clarification from the Government to date, it is assumed that the reforms proposed will adopt a similar approach to that of the 2012 income year. That is a taxpayer who turns 60 between 1 July 2013 and 30 June 2014 and a person who turns 50 between 1 July 2014 and 30 June 2015 will be eligible for the new $35,000 concessional contribution cap.

DISCLAIMER: The above is general advice only, you should not act on this advice without consulting a professional adviser to discuss your personal circumstances.