A number of initiatives were announced in the 2012/13 Federal Budget impacting on individuals using superannuation to save for retirement.

Reduction of tax concessions for contributions of very high income earners

From 1 July 2012 individuals with incomes greater than $300,000 p.a will have a 30% tax levied on their concessional contributions.

Deferral of the higher Concessional Contributions Cap for over 50s

The Government will defer the start date of the 2010-11 Federal Budget measure of increasing concessional contribution caps for individuals aged 50 and over with low superannuation balances by two years from 1 July 2012 to 1 July 2014.

The two year deferral means that for 2012-13 and 2013-14 all individuals will have a concessional contribution cap of $25,000 p.a. In 2014-15, the general cap is likely to increase to $30,000 due to indexation (refer below) and the higher cap would commence at $55,000. 

Other announcements outside the 2012-13 Federal Budget relating to the Contributions Caps

  • Concessional contributions caps - one year pause in indexation On 29 November 2011, the government announced it will pause the indexation of the super general concessional contributions cap for one year in 2013-14, so it remains at $25,000. Indexation of the cap will be deferred until 2014-15, when the cap is expected to rise to $30,000.
  • Refund of excess concessional contributions In the 2011-12 Federal Budget the Government announced that from 1 July 2011, if an individual breached the concessional contributions cap by $10,000 or less, they can choose to take the excess concessional contributions out of their super fund and have it assessed at their marginal rate of tax. The measure only applies to a first time breach made in the 2011-12 financial year or subsequent years.