Superannuation Q&As

In or out? Budget 2014 - Redrawing excess contributions

1 min read

19/08/14 10:24

We have a client who has inadvertently exceeded their non-concessional contributions cap in the 2014 financial year.

We note that changes to excess non-concessional contributions cap rules were proposed in the 2014 budget whereby a member may be refunded these excess contributions without penalty.

Can you please advise whether these changes have become law and if they haven't should the super fund hold off finalising their return until it becomes law?

Answer

In the May Federal Budget, the Government announced the measure whereby individuals who exceed their non-concessional contributions cap will have the option to withdraw the excess amount and any associated earnings. The earnings will then be taxed at the member's marginal tax rate. This measure is proposed to apply from 1 July 2013. Read more here.

However, as far as we are aware, this measure has not yet been legislated.

We are not convinced that holding off finalising their return in case this measure becomes law would be the best thing to do - as set out in the measures, it may be that the changes are effective from 1 July 2013 anyway.

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