Why non concessional contributions

Once you reach age 75 , you generally cannot make non-concessional contributions — even if you are still working. This is because once you start a bring-forward arrangement, your annual contributions cap amount is set for the fixed three-year period of the arrangement. Making a non-concessional contribution is easy, with most super funds allowing you to make them using payment systems like cheque, BPay or electronic funds transfer.

Need to know : You cannot claim a tax deduction for personal contributions you want to keep as non-concessional after-tax contributions. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement PDS or seek personal financial advice before making any investment decisions.

Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Learn more. All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. Learn more about SuperGuide. Reading time: 4 minutes On this page What is a non-concessional super contribution?

What types of contributions are non-concessional? What is the non-concessional contributions cap? In addition, volunteers are generally not considered to be gainfully employed as they do not receive remuneration for their services.

If you assist another family member by say, babysitting or gardening, the particular circumstances surrounding the arrangement will be critical.

In this case, even if you are paid for your services, the definition of gainful employment may not be satisfied. If you meet certain criteria, you will be able to make voluntary contributions for 12 months from the end of the Financial Year in which you last met the Work Test — this is known as the Work Test Exemption. In terms of the amount of money that could be contributed, the existing concessional contribution cap and non-concessional contribution cap will continue to apply.

If the "ineligible" amounts are not returned within this time, your SMSF will have breached the superannuation contribution rules resulting in compliance issues that will be reported to the ATO in your SMSF's annual audit.

If you are aged between 67 and 74, the Non Concessional Contributions limit for a given Financial Year is as follows:. The Bring Forward Rule allowing you to bring forward up to two years of contributions is not available to persons above age However if you are aged 66 on 1 July of the current Financial Year and turn 67 during the Financial Year, you may access the bring-forward arrangement in the current Financial Year if all other requirements are met.

Each Contribution and Contribution Type must be allocated to a specific Member as part of the annual compliance process. This is a legal requirement. To the extent that the narration on the Bank Statement is insufficient, you will be asked to confirm on whose behalf the contributions have been made and the Contribution Type using an annual checklist we send to all SMSF clients each year by 31 August.

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Use this calculator to calculate the benefits of a superannuation recontribution strategy. This tax rate can be much lower than individual marginal tax rates.