New income tests affecting superannuation concession entitlements
Certain superannuation contributions will now be taken into account when determining whether an individual is entitled to:
- Income tax deductions for personal concessional contributions
- Spouse contribution rebate and
- Superannuation co-contribution.
This change is effective from 1 July 2009.
Changes to the personal contributions 10% test
Individuals in receipt of employer superannuation support, who intend to claim an income tax deduction for personal superannuation contributions made to their superannuation fund, must satisfy various tests including the 10% test.
Effective 1 July 2009, reportable employer superannuation contributions (RESC) are included in the 10% test.
Under the 10% test, the amount earned as salary and wages, reportable fringe benefits and RESC combined by an employee, must be less than 10% of their assessable income. This rule applies regardless of whether or not an employer has paid superannuation on their behalf.
The test may apply to company directors and contractors.
18% rebate on spouse contributions
A superannuation contribution made on behalf of a spouse may now be eligible for a rebate of 18% on the contribution made.
The rebate applies to contributions up to $3,000 in an income year. The maximum rebate available is $540.
The rebate is calculated based on the income of the spouse receiving the contribution, and includes their assessable income, reportable fringe benefits and RESC.
The rebate is reduced where the spouse's income falls between $10,800 and $13,800.
Superannuation Co-contribution
As announced earlier this year, the superannuation co-contribution scheme will be temporarily reduced during the coming years, before scaling back up to 150% in 2014-15. During 2009-10, the Government will match $1 for each $1 contributed to superannuation up to a maximum $1,000 per annum.
Eligibility for a co-contribution payment will be determined based on your assessable income, reportable fringe benefits and RESC for the year. The following table summarises the level of co-contribution you may be entitled to:
| Total Income for FY 2010 | Calculation of the Co-contribution |
| Total income less than $31,920 | Entitled to the lesser of: - $1 x $1 of personal undetected contribution made; and - $1,000 maximum limit |
| Total income between $31,921 and $61,919 | Entitled to the lesser of: - $1 x $1 of personal undetected contribution made; and - $1,000 maximum limit less (total income - $31,920) x 0.0333 |
| Total income equal to or great than $61,920 | No co-contribution entitlement |
