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Types of contributions and payments

There are several contribution types, depending on who is making the payment, whether the contribution is tax deductible or qualifies under special rules.

Concessional contributions

Concessional contributions are typically:

  • employer contributions (including salary sacrifice contributions), or
  • personal contributions that you claim as a tax deduction, for example, if you are self-employed (refer to the Claiming tax deductions for your contributions section for further details).

Concessional contributions are subject to an annual contributions cap.

Non-concessional contributions

Non-concessional contributions are generally contributions that are not tax deductible. They include:

  • personal contributions that you do not claim as a tax deduction
  • contributions made for you by your spouse, and
  • certain amounts transferred from an overseas pension scheme which are not taxed in the Fund.

These contributions are also subject to an annual contributions cap. However contributions that are excluded from this cap include Government co-contributions, certain CGT exempt small business sale proceeds and personal injury proceeds where certain conditions are met.

Co-contributions

If you make personal non-concessional contributions, you may qualify for a Government co-contribution, depending on whether or not your income falls within a maximum limit. Eligibility for a co-contribution is subject to certain requirements including your income level, age and sources of income. For further information about the co-contribution thresholds and rates, refer to the ATO website or to your financial adviser. Co-contributions are not subject to a contributions cap and are not taxed in the Fund.

CGT exempt small business sale proceeds

You may be able to contribute the proceeds arising from the sale of an asset that was used in running a small business.

Contributions may qualify for an exclusion from the non-concessional contributions cap (up to a lifetime limit known as the CGT cap amount) if the sale proceeds qualify for either:

  • the small business CGT 15-year exemption, or
  • the small business CGT retirement exemption.

You must notify us using the applicable ATO form either before or at the time (ie not after) of making the contribution that it is being made under this provision. We recommend you speak with your adviser if you wish to contribute the sale proceeds from your small business.

Personal injury proceeds

You may contribute amounts from a court approved settlement or court order, or a lump sum workers compensation payment that arises as a result of your permanent incapacity. Strict timeframes and conditions apply for such a payment to qualify as a personal injury proceeds payment. If the conditions are met, these contributions can be excluded from the non-concessional contributions cap.

Broadly, the amount must be contributed to your account within the later of 90 days of either the day you received the payment, the day the relevant agreement was entered into, or the day the order was made. Your permanent incapacity must be verified by two medical practitioners and you must notify us using the applicable ATO form either before or at the time of making the contribution that the contribution is being made under this provision. It is your responsibility to ensure you meet these conditions. We recommend you consult your adviser when contributing personal injury proceeds.

To have the contribution treated as a personal injury proceeds payment, you must notify us using the applicable ATO form either before or at the time of making the contribution.

Employment termination payments

Employment termination payments generally may not be rolled over and must be taken in cash. However, transitional rules apply in certain circumstances to employment termination payments that are made under an existing employment contract which was in place before 10 May 2006 where the payment is made prior to 1 July 2012. Payments made into superannuation under these transitional rules can qualify for a limited exclusion from the concessional contributions cap and are known as Directed Termination Payments. To have a contribution treated as a Directed Termination Payment, your employer should notify us using the applicable ATO form.

Amounts you choose to transfer from a foreign superannuation or pension scheme

If you hold benefits in a foreign superannuation or pension scheme, you may be able to transfer them into your Super Division account, subject to the rules of the foreign scheme and the law applying to the scheme in which your benefits are held. If you are considering transferring benefits from overseas, it will be important for you to obtain professional specialist advice on both the overseas and Australian tax treatment. Transfers from an overseas scheme are subject to the contribution eligibility rules and are usually treated as non- concessional contributions. For more information, refer to the Taxation section. If you are transferring benefits from the UK, please refer to the Investments from overseas section.

Superannuation lump sum amounts that are rolled over

You can rollover a superannuation lump sum amount from another Australian superannuation fund, at any age. Rollovers from Australian complying superannuation funds generally do not count towards the contribution caps and are not subject to the eligibility rules applying to contributions that are made from outside the superannuation system.