Superannuation 2012 Federal Budget

Higher tax concession for high income earners reduced

The Government will reduce the tax concession which very high income earners receive on their concessional contributions, so it is more in line with the concession received by average income earners. Individuals with income greater than $300,000 will have the tax concession on their contributions reduced from 30 per cent to 15 per cent (excluding the Medicare levy)

The definition of income for the purpose of this measure includes concessional superannuation contributions is less than the $300,000 threshold, the reduced tax concession will only apply to the part of the contributions that is in excess of the threshold.

The reduced tax concession will not apply to concessional contributions which will exceed the concessional contributions cap and are therefore subject to excess contributions tax.

This measure will take effect from 1 July 2012.