Contribution caps to remain unchanged

The Tax and Superannuation Laws Amendment (2012 Measures No 1) Bill introduced on 1st March 2012 contains a number of super measures including the following:

• The concessional contribution cap will be stay at $25,000 for the 2013 and 2014 tax years.
• This means the non-concessional cap will not be indexed either
• Persons over the age of 50 with super balances of less than $500,000 will still retain the concessional cap of $50,000 pa, so some good news for people in this position.

The intention to freeze contribution caps for the next two financial years highlights again the need to maximise concessional and non concessional cap opportunity during your working life. Developing good financial behaviours early has never been more important.   

Interestingly, a further measure introduced to allow eligible persons to have excess concessional contributions of up to $10,000 from 1 July 2011 refunded and assessed as income rather than subject to excess benefits tax could provide options for clients who overfund their concessional cap by a small amount.