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Concessional super contributions extended for over 50s



28 February 2011The Government announced today an extension of the concessional contributions cap for individuals aged 50 and over with super balances under $500,000.

Applying from 1 July 2012, the concession enables individuals over 50 with low balances to make up to $50,000 in concessional superannuation contributions.

The $500,000 threshold will not be indexed.

It is proposed to set the contributions cap for individuals aged 50 or over at $25,000 above the indexed cap for individuals under 50.

In terms of calculating the $500,000 account balance, two options are considered in the proposal: June in the financial year preceding the year in which contributions are to be made; or, June two years prior to the end of the financial year in which contributions are to be made.

The proposal also looks at whether or not to include those who have commenced drawing down their superannuation in the concession. The three models contemplated include: Extending eligibility to those who have commenced withdrawals and add those withdrawals to the account balance; Extending eligibility to those who have commenced withdrawals but do not add withdrawals to the account balance; and, excluding those who have commenced withdrawals from eligibility.

In terms of the administration of the superannuation cap concession, the proposal considers either a fully self assessment model or an ATO driven model where they would advise the cap.

For others, the concession will default back to $25,000 from 1 July 2012.

More information
Press release - Over 50’s can save more super
Consultation paper - Concessional Super Contributions Caps for Individuals Aged 50 and Over

 

 



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