Superannuation contributions explained

Contributing to Superannuation

Superannuation plays an important part in ensuring and securing your lifestyle in retirement. To help you with this, you may choose to make additional contributions to ING Living Super in addition to the Superannuation Guarantee (SG) contributions made by your employer. By paying extra into your super, you may pay less tax and retire with more savings. Contributing small amounts over time is often easier than finding a spare 'lump sum' of money.

How can I contribute to my Super?

There are two types of contributions that can be made:

Concessional contributions

You can choose to make Concessional Contributions, which are before-tax contributions, to your ING Living Super account. This means that you pay 15% contributions tax on these contributions (up to the concessional contributions cap. This is described in more detail later in this document) which may be lower than the tax on your current salary or wage. Concessional contributions include super guarantee employer contributions, salary sacrifice and personal contributions on which you claim a tax deduction.


Please note that anyone earning more than $250,000 from 1 July 2017 may be subject to an additional 15% contributions tax on non-excessive concessional contributions. (Please note that conditions apply. For more information, please refer to the ATO website regarding Division 293 Tax).

Non-concessional contributions

Non-concessional contributions are any after-tax contributions you may choose to make to your ING Living Super account. These include any spouse and personal contributions made by you for which you do not claim a personal tax deduction. No tax is payable when these contributions are made to your ING Living Super account (subject to the non-concessional contributions cap).

Concessional contributions

Superannuation guarantee

Compulsory superannuation guarantee (SG) contributions are made on your behalf by your employer to ING Living Super. If you would like to have your SG contributions paid into your ING Living Super account, all you need to do is complete the 'Super Choice' form and submit this to your employer. The form can be found by logging in to ing.com.au, then clicking on 'My Super Finances' and then 'Contribute to your Super'.

Salary Sacrafice

Salary Sacrifice (SS) are contributions you request your employer to make on your behalf from your pre-tax salary. These contributions will be amounts on top of your employer’s requirements under SG.

Claiming tax deductions on personal contributions

You may be able to claim a tax deduction for contributions you make to your superannuation up to age 74 (Please note: If you are aged between 65 and 74, you will need to have worked 40 hours within any 30 day period in the financial year a contribution is made). These contributions will be subject to the Concessional Contribution caps. Exceeding the Concessional Contribution Cap will attract extra tax.

You must ensure you have provided ING Living Super with your Tax File Number (TFN) when making the contribution. If you your TFN is not provided before or at the time of making the contributions, your contributions could be taxed an additional 34%. Furthermore, these contributions cannot be accepted as personal contributions for the purposes of assessing for the eligibility of government co-contributions.

Self-employed people can also elect to make personal non-concessional contributions to their ING Living Super account and may be eligible for a Government co-contribution payment.

Low Income Superannuation Tax Offset

If you earn less than $37,000 a year (conditions apply) and your employer makes concessional (before-tax) superannuation contributions on your behalf, you may be eligible for a refund of the contributions tax deducted from your ING Living Super account.

If you are eligible, the Government will pay an amount equal to 15% of the total concessional super contributions capped at $500, directly to your ING Living Super account. Please ensure you have provided your TFN to ING Living Super as these refunds cannot be paid to your ING Living Super account without it.

Non-concessional Contributions

Personal contributions

You can contribute from your after-tax income to your ING Living Super account and count towards your non-concessional contributions cap unless you have claimed a tax deduction for them. You can choose to make regular personal contributions from your after-tax salary or personal one-off 'lump sum' contributions.

Government co-contributions

You may be eligible to receive a co-contribution from the government if you earn less than a set threshold in a financial year and make after-tax contributions to your super. Co-contributions are outlined in further detail below.

Spouse contributions

Your spouse may make contributions to your ING Living Super account, as long as the contribution is paid from an account in the name of your spouse or a joint account where your spouse is an account holder.

Also, if you earn less than $13,800 a year for the 2016/17 financial year or less than $40,000 per year from 1 July 2017 (conditions apply) and your spouse makes an after-tax contribution to your account, your spouse may be eligible for a tax offset of up to $540 (please refer to the ATO website regarding Spouse Contributions Changes for more information).

To make spouse contributions, both you and your spouse must be Australian residents when the contributions are made, you must be living together and a personal tax deduction is not being claimed on the contribution.

Contribution caps

Contributions that exceed the contributions caps will have additional tax applied to them. The caps for 2018/19 are outlined below:

Concessional contributions cap

Annual cap for 2018/19

$25,000

Important Note: If you exceed the concessional contributions cap, you will receive a notice of excess contributions assessment from the ATO. The excess contributions will be included in your assessable income for the corresponding financial year and taxed at your marginal tax rate plus the Medicare Levy (less a 15% offset). In addition, you will be liable for the excess concessional contributions charge on the increase in your tax liability. This charge is applied to recognise that the tax on the excess concessional contributions was collected later than normal income tax.

You may apply to withdraw 85% of the excess concessional contributions made into your super account. Unless you choose to withdraw the excess contribution amount, the contribution will also become a non-concessional contribution, which may result in both rates of tax being applied to the same contribution.

Non-concessional contributions cap

Age on the first day of the financial year
Annual cap for 2018/19

Under age 65

$100,000 annually, or $300,000 under the bring forward rule*

Age from 65 to 74

$100,000 annually

Age 75 and over

$0 - non-concessional contributions cannot be made

*If you were under the age of 65 on the first day of the financial year, then you can contribute up to three times the annual amount in a financial year under the ‘bring forward rule’.

Additional rules for Total Super Balances above $1.4 million:

If your total super balance exceeds $1.6 million on 30 June of the previous financial year, you will be unable to make any non-concessional contributions the current financial year. If you are currently under the age of 65, you will be eligible to utilise the bring forward rule and contribute up to 3 times the annual non-concessional contribution cap. However, this will be limited to:

Up to 2 times the annual non-concessional contribution cap if your total super balance is $1.4 million or over but less than $1.5 million at the end of the last financial year;

Up to the annual non-concessional contribution cap only if your total super balance is $1.5 million or over but less than$1.6 million at the end of the last financial year.

Important Note: If you exceed the non-concessional contributions cap, you may be subject to excess non-concessional contributions tax. You can elect how your contributions in excess of the non-concessional cap are taxed by completing the ATO excess non-concessional contributions (ENCC) election notice and returning the form to the ATO. The ATO will then send the instructions to the relevant super fund. Once you have made your election it cannot be changed.

There are three options available from the 2016/17 financial year onwards:

1. Release the amount from superannuation

You can elect to have excess non-concessional contributions (and associated earnings) withdrawn instead of paying the excess non-concessional contributions tax. If you choose this option, you are electing to release all your excess non-concessional contributions and 85% of the associated earnings from your super fund. The full amount of the associated earnings will be included in your assessable income and taxed at your marginal rate of tax. A non-refundable tax offset of 15% of the earnings will be applied to recognise any tax paid by the super fund.

2. Pay an excess non-concessional contributions tax on the excess amount

If you choose not to release your excess non-concessional contributions from your super fund, you will receive an assessment where the excess will be taxed at the highest marginal tax rate. You will receive a compulsory release authority with the assessment which you need to give to your super fund to pay the amount of the assessment. The super fund will release the amount to you and you need to pay the tax to the ATO.

3. Advise the ATO you have no money in Superannuation

If the ATO is satisfied that the value of your superannuation interests is nil, then the full associated earnings stated in the determination will be included in your assessable income and will be taxed at your marginal tax rate. A non-refundable tax offset of 15% of the earnings will be applied to recognise any tax paid by the super fund. ING Living Super cannot accept non-concessional contributions where the amount exceeds your non-concessional cap in a single contribution.

Summary of age restrictions on contribution types

Your eligibility to make different contributions is based on your age and the type of contribution that you, your employer or spouse wishes to make. The following table summarises when contributions can be made.

Summary of age restriction on contribution types

1. Gainfully employed means employed or self-employed (for gain or reward) for at least 40 hours in a period of not more than 30 consecutive days in the financial year in which the contribution is made.
2. If eligible, you may be able to claim a tax deduction for your personal contributions. You must complete a personal tax deduction notice and receive an acknowledgement from us before claiming personal contributions as a tax deduction in your tax return.

What is a co-contribution?

Depending on your income, the Government may top up your super with between 10 cents to 50 cents for every $1 you add to your super, up to a maximum of $500. To qualify, you need to contribute to your super account from your take-home pay and earn less than the set thresholds (discussed below). The co-contribution is not subject to contributions tax.

How much will you get?

If you make a personal after-tax contribution for which no tax deduction is claimed and your total income (conditions apply) is under the co-contributions upper threshold ($51,021 for 2016/17 and $51,813 in 2017/18), the Government may contribute between $0.10 to $0.50 for each dollar you contribute up to $500 p.a. The maximum co-contribution payable reduces for every dollar your total income exceeds the lower threshold ($36,021 for 2016/17 and $36,813 for 2017/18), until your total income reaches the upper threshold.

To be eligible for the Government co-contribution you must satisfy all of the following requirements:

you don't claim a tax deduction for the personal super contributions you make during the financial year;

you must earn 10% or more of your total income from carrying on a business, eligible employment, or both (From 1 July 2017 this requirement no longer applies);

your total income (conditions apply) must be under the co-contributions upper threshold;

you must not be a temporary resident at any time during the income year in which the contribution is made (certain exceptions may apply);

you must be under 71 years of age at the end of that income year; and

you must lodge a tax return.

Full information regarding eligibility for the Government co-contribution can be found at ato.gov.au.

Other Contributions

The ATO also allows for the below contributions to be made into superannuation:

These contributions are subject to their own criteria. Please give us a call on 133 464 or refer to the ATO websites for more information on how to make these contributions.