Document ID: chunk:federal_register_of_legislation:C2007A00009:clause:1_1:p1
Version: federal_register_of_legislation:C2007A00009
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 1/29)
Character Range: 7849–11001

1  After Part 3‑10
Insert:

Part 3‑30—Superannuation

Division 280—Guide to the superannuation provisions

Table of sections

280‑1 Effect of this Division
280‑5 Overview

Contributions phase

280‑10 Contributions phase—deductibility
280‑15 Contributions phase—limits on superannuation tax concessions

Investment phase

280‑20 Investment phase

Benefits phase

280‑25 Benefits phase—different types of superannuation benefit
280‑30 Benefits phase—taxation varies with age of recipient and type of benefit
280‑35 Benefits phase—roll‑overs

The regulatory scheme outside this Act

280‑40 Other relevant legislative schemes

280‑1  Effect of this Division

 (1) This Division is a *Guide.

 (2) Tax concessions in this Part are intended to encourage Australians to save in order to make provision for their retirement, recognising that superannuation investments, and the income from them, are quarantined for retirement.

280‑5  Overview

 (1) There are 3 phases in the tax treatment of superannuation, as follows:
 (a) the contributions phase;
 (b) the investment phase;
 (c) the benefits phase.

 (2) In the contributions phase, contributions are made to a superannuation plan in respect of a member of the plan.

 (3) In the investment phase, these contributions are invested by the superannuation provider.

 (4) In the benefits phase, these contributions, plus earnings from investing them, are usually paid as benefits to the member when he or she retires after reaching preservation age. In the event of death, the benefits are usually paid to the member's dependants.

 (5) There is also a regulatory scheme outside this Act that is relevant to the taxation treatment of superannuation. For example, other Acts set out prudential and operating standards for superannuation providers.

Contributions phase

280‑10  Contributions phase—deductibility

Contributions that can be deducted

 (1) Employers can usually deduct contributions they make in respect of their employees. Individuals can usually deduct contributions they make in respect of themselves if less than 10% of their total assessable income (plus reportable fringe benefits) for the income year is attributable to employment or similar activities.

Other contributions cannot be deducted

 (2) Other contributions cannot be deducted. These include personal contributions made by individuals whose employment income is 10% or more of their total income, and contributions made by others in respect of them (such as contributions by a spouse or family member, or Government co‑contributions).

280‑15  Contributions phase—limits on superannuation tax concessions

 (1) There is a limit to contributions that can be made in respect of an individual in a year that receive favourable tax treatment. This limit takes the form of a tax on excessive contributions, and neutralises the favourable tax treatment arising from the excessive contributions.

 (2) If concessional contributions exceed an indexed cap, the individual concerned is taxed on the excess. This tax liability can be met by releasing money from his or her superannuation interests.

 (3) If non‑concessional