Reportable superannuation contributions

To be eligible for many Government benefits your adjusted taxable income is taken into consideration. Some of these benefits include the Family Tax Benefit, Child Care Benefit and the Superannuation Co-contribution scheme. Your adjusted taxable income is also used in determining your liability for the Higher Education Loan Program (previously HECS), child support payments and the Medicare Levy Surcharge.

Adjusted Taxable Income

Currently, adjusted taxable income includes:

	Taxable income (includes salary and wages, lump sum payments, and income from: business or self-employment, investments, real estate, taxable Government pensions and benefits; and other taxable income)
	Reportable fringed benefits
	Net rental property losses
	Certain exempt income from government payments (these are very specific payments)
	Target foreign income
	Less Child maintenance paid to another person

From 1 July 2009 your adjusted taxable income will now include:

	Reportable superannuation contributions and
	Net investment losses

Reportable super contributions include:

	reportable employer super contributions
	personal deductible contributions.

Reportable employer super contributions

Reportable employer super contributions include contributions your employer makes on your behalf under a salary sacrifice arrangement. This is additional to the minimum contributions they must make under one of the following:

	super guarantee law
	an industrial agreement
	the trust deed or governing rules of a super fund
	a federal, state or territory law.

If your employer makes reportable employer super contributions on your behalf, they will include the total amount of these contributions on your end of financial year payment summary. You must copy this amount into your income tax return and we will use it to work out your total reportable super contributions for the year.

Personal deductible contributions

Personal deductible contributions include the total of any personal contributions you make to a super fund for which you can claim an income tax deduction on your individual tax return.

You can claim an income tax deduction for personal contributions you make to a super fund if you meet certain eligibility criteria.

The ramifications of these changes will mean salary sacrificing into superannuation will no longer avail you to greater payments of the Family Tax Benefit and the Superannuation Co-contribution. Also, repayments towards HELP and Medicare Levy Surcharge will include additional superannuation contributions.

In light of these changes you may wish to reconsider your salary packaging arrangements from 1 July 2009 to ensure your desired goals match the actual outcomes available to you. Also, following the recent Federal Budget, contribution limits into superannuation will be halved from 1 July 2009. With this and the changes to how superannuation contributions are disclosed, re-evaluating your superannuation contribution strategy is especially important.

Published : 13 May 2009