Various thresholds for superannuation have been indexed in line with increases in AWOTE. The new thresholds for 2011/2012, along with the thresholds for the previous two years, are set out below.
Better super change to indexation
The Better Super changes to superannuation included changes to the indexation of certain thresholds. Some thresholds are now indexed by reference to the change in AWOTE for the year ending the previous 31 December, and some for the year ending the previous 31 March. All the thresholds for 2011/2012 are now available and are included in this Bulletin.
Indexed Thresholds
Contribution Caps
2011/2012
2010/2011
2009/2010
Concessional Cap
$25,000
$25,000
$25,000
Transitional Concessional Cap
$50,000
$50,000
$50,000
Non-concessional Cap
$150,000
$150,000
$150,000
Contributions in respect of a person are taxed in total at 46.5% if they exceed the contribution caps (this includes the 15% contributions tax that applies to all concessional contributions). The concessional cap applies to employer, salary sacrifice and other concessional, or deductible, contributions. The non-concessional cap applies to after tax member contributions, spouse contributions and certain other amounts. Transitional arrangements apply until 30 June 2012 for those who reach or exceed age 50 before that date. The higher cap applies from the start of the year in which the person reaches age 50. The government has proposed permanently retaining the higher concessional cap at $50,000 (indexed) for those aged 50 or over with total superannuation balances les than $500,000. This proposal is not yet law.
Low Rate Cap Amount
2011/2012
2010/2011
2009/2010
Low Rate Cap Amount
$165,000
$160,000
$150,000
Where a superannuation lump sum is received in cash between the member’s preservation age and age 60, lower tax rates apply to that part of the taxable component below the low rate cap amount. The rates are 0% for taxed elements (for payments from private sector funds) and 15.0% (plus the Medicare Levy of 1.5%) for untaxed elements (such as certain payments from public sector funds).
Untaxed Plan Cap Amount
2011/2012
2010/2011
2009/2010
Untaxed Plan Cap Amount
$1,205,000
$1,155,000
$1,100,000
Where a member receives a superannuation lump sum that has not been subject to contributions tax (for example, from an unfunded public sector scheme), concessional tax only applies to the part of the benefit that is less than the untaxed plan cap amount. The cap applies to each plan, not each benefit paid.
ETP Cap Amount and Transition Cap Amount
2011/2012
2010/2011
2009/2010
ETP Cap Amount
$165,000
$160,000
$150,000
Transitional Lower Cap Amount
$165,000
$160,000
$150,000
Transitional Upper Cap Amount
$1,000,000
$1,000,000
$1,000,000
Where an ETP is received in cash from an employer, lower tax rates apply to that part of the taxable component below the ETP cap amount. The rates are 15% if the recipient is aged at least their preservation age at the end of the year of receipt, or 30% otherwise (plus the Medicare Levy of 1.5%). Transitional arrangements apply to certain entitlements in place at 9 May 2006. The tax rate on that part of the taxable component that is between the transitional lower and upper cap amounts is taxed at 30% plus the Medicare Levy.
Co-contribution Thresholds
2011/2012
2010/2011
2009/2010
Lower Income Threshold
$31,920
$31,920
$31,920
Upper Income Threshold
$61,920
$61,920
$61,920
Under the co-contribution scheme from 1 July 2009, the government will pay up to $1.00 for every $1.00 of after tax contributions made by a member (to a maximum co-contribution of $1,000 pa). The full payment applies for those on incomes less than the lower income threshold, phasing out once income exceeds the upper income threshold. The thresholds from the 2009/2010 year have been frozen for the 2010/2011 and 2011/2012 years, and the government has proposed extending the freeze to the 2012/2013 year.
Superannuation Guarantee Maximum Contribution Base
2011/2012
2010/2011
2009/2010
Per Quarter
$43,820
$42,220
$40,170
Per Annum
$175,280
$168,880
$160,680
Superannuation Guarantee (SG) contributions are not required to be made in respect of that part of Ordinary Time Earnings in excess of the Maximum Contribution Base. While both per quarter and per annum figures are shown, compliance with the SG is tested quarterly not annually.
Tax Free Component on Genuine Redundancy
2011/2012
2010/2011
2009/2010
Base Amount
$8,435
$8,126
$7,732
Per Year of Service
$4,218
$4,064
$3,867
Part of a payment received as a result of genuine redundancy or as part of an early retirement scheme is tax-free, while the remainder is taxed as an employment termination payment (ETP). The tax free amount is calculated as the “base amount” plus the “per year of service” amount for each year of service to which the redundancy relates.
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