What contributions can be accepted by my SMSF?
Contributions can be divided a number of ways; mandated and non-mandated; employer and self-employed, concessional and non-concessional.
Mandated Contributions
Mandated contributions are certain employer contributions that are required to be made on behalf of the member. Your SMSF can accept these contributions for fund members.
They include:
- Superannuation Guarantee (SG) contributions
- Superannuation Guarantee Shortfall (SG) components
- Award contributions
Non-Mandated contributions
Non-Mandated contributions are all other voluntary contributions from sources such as:
- Employer contributions above the SG and award requirements
- Personal contributions by employee and self-employed contributions
- Other personal contributions
There are some restrictions on a SMSF accepting these types of contributions based on the age of the member.
- Where the member is under 65 the fund can accept all non-mandated contributions provided the member’s Tax File Number (TFN) has been quoted.
- After age 65 non-mandated contributions can only be accepted where the member is gainfully employed at least on a part time basis and the member has quoted their TFN.
- Where the member is aged 70 to less than 75, the same conditions apply but spouse contributions are not acceptable.
After age 75 non-mandated contributions cannot be made to the fund.
We are an independent family owned business that has specialised in Self Managed Superannuation (SMSF) for more than 30 years..
Contribution Limits
With all contributions there are now limits on the amount each member can contribution to their Superannuation fund.
Non Concessional Contributions
Non-concessional contributions are essentially contributions which do not form part of the assessable income of the fund. These are normally after contributions from after tax income. These may include:
- Personal contributions by the member, for which a tax deduction is not claimed.
- Contributions made by the spouse on behalf of the member
- Certain transfers from foreign Superannuation funds.
This is by no means a definitive list but contains the main elements of non-concessional contributions.
The current non-concessional contribution cap for members aged 64 (or less) on 1 July of the relevant financial year, is either
- An annual cap of $150000, or
- A cap of $450000 over a 3 year period. (This is under the bring-forward provisions)
For members aged 65 but less than 75 on 1 July of the relevant financial year, their annual cap is $150,000. Before making the contribution, they need to satisfy the work test in the year the contribution is made.
Concessional Contributions
This category of contributions includes those contributions made by the employer on behalf of the member, or by the member themselves where the contribution is included in the assessable income of the fund. In this case the contributor, i.e. the employer or member claims a tax deduction for these contributions.
(Please note that member can only claim a tax deduction for their contribution where certain conditions are met.)
From 1 July 2012 all concessional contributions are subject to an annual limit of $25,000. Prior to this there were transitional rules which allowed members aged 50 and over to contribute higher annual amounts.
It is most important to be aware of these contriibution limits as very severe penalties are imposed for exceeding these limits.
Nothing in this website should be considered personal advice. The information is of a general nature and does not consider your personal needs and objectives or your financial situation. Before you proceed to make changes to your Superannuation you should consider seeking financial advice. Our related company Dunross Financial Planning Pty Ltd (Australia Financial Services Licence Number 237496) can help you with your financial goals and investment needs.
The Alan Skerritt Consultancy
Windsor Holdings Pty Ltd (ACN 010 018 041 ABN 12 862 040 559)
(Incorporated in Queensland) Trustee
What is a Self Managed Super Fund (SMSF)?
Can a SMSF have just one Member?
How much Superannuation do you need to set up a SMSF?
What contributions can be accepted by my SMSF?
Contribution Limits - concessional and non concessional contributions
Can my SMSF pay a pension when I retire?
Transition to Retirement Income Streams (TRIS's)
What tax will I pay on my pension?
Compliance issues with the Sole Purpose Test
Buying a property within your SMSF
Nothing in this website should be considered personal advice. The information is of a general nature and does not consider your personal needs and objectives or your financial situation.
