Budget confirms excess contributions treatment
The Federal Government has used the Budget to confirm its move to address long-standing issues with excess superannuation contributions, declaring that from 1 July, 2013, they will be able to be withdrawn without penalty.
The Minister for Finance and Financial Services, Senator Mathias Cormann, said the measure fulfilled a pre-election promise and that it would ensure the treatment of excess concessional and non-concessional contributions was broadly consistent.
“For any excess contributions made after 1 July, 2013, breaching the non-concessional cap, the Government will allow individuals to withdraw those excess contributions and associated earnings,” he said.
“If an individual chooses this option, no excess contributions tax will be payable and any related earnings will be taxed at the individual's marginal tax rate.”
Cormann said individuals who left their excess contributions in the fund would continue to be taxed on these contributions at the top marginal rate.
He claimed the measure also dealt with both policy recommendations made in the Inspector General of Taxation's report on the Australian Taxation Office's approach to superannuation excess contributions tax.
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