Private ruling: Personal superannuation contribution
Date of advice: 21 September 2015
Published: September 2015
Ruling period: Year ending 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Are you entitled to claim a deduction for personal superannuation contributions? | A1: Yes

Relevant facts and circumstances: Your income consists of superannuation pension payments, and military rehabilitation and compensation payments. You will not receive any reportable superannuation contributions or reportable fringe benefits as you are retired. You intend to make a personal superannuation contribution to a complying superannuation fund. You will notify the fund of your intention to make a contribution and will await acknowledgement of receipt of the notice. You wish to then claim a deduction for the personal superannuation contribution.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 290-150 | Income Tax Assessment Act 1997 Section 290-160

Reasons for decision: Summary: Under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997) a taxpayer can claim a deduction for a personal contribution they make to a superannuation fund or an RSA provided the following conditions are met: • Less than 10% of the total of their taxable income, reportable fringe benefits and reportable employer superannuation contributions is attributable to being engaged in office or employed such that they are considered an employee for superannuation guarantee purposes; • The taxpayer is aged over 18 or under 75 years of age; • The contribution is made to a complying superannuation fund or RSA for the purpose of providing superannuation benefits to the taxpayer; and • The taxpayer notifies the fund or RSA provider that they intend to make a personal contribution, and the notification is acknowledged by the fund or RSA provider. In your case, you are aged between 18 and 75 years of age, you are making the contribution for the benefit of yourself, and you intend to notify the fund of your intention to make the contribution and will claim the deduction once you have received acknowledgement. The question is whether you satisfy the maximum earnings as an employee condition. The condition in section 290-160 of the ITAA 1997 is that if a taxpayer is engaged in any activities that result in them being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (SGAA) then less than 10% of the total of their assessable income and reportable fringe benefits must be attributable to those activities. Subsection 290-160(1) states: This section applies if: a) in the income year in which you make the contribution, you engage in any of these activities: (i) holding an office or appointment; (ii) performing functions or appointment; (iii) engaging in work; (iv) doing acts or things; and b) the activities result in you being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (assuming that subsection 12(11) of that act has not been enacted). In your case, you are retired from work. Your income consists of superannuation pension payments, and Military rehabilitation and compensation payments. Paragraph 76 of Superannuation Guarantee Ruling SGR 2009/2 states that workers' compensation payments made to an employee who is not required to work due to incapacity are not salary and wages. Consequently, the provision of superannuation guarantee support on these payments is not required. In relation to your receipt of superannuation pension income, this does not represent income from employment as it is not a reward for services rendered, hence, no superannuation guarantee support on these payments is required. As none of your income earning activities results in you being considered an employee for the purposes of the SGAA, you have satisfied the maximum earnings as an employee condition. As you have satisfied all the conditions of section 290-150 of the ITAA 1997 you are entitled to claim a deduction for personal superannuation contributions.