Home | DSS | PM&C | Education | Employment | AGD | Contact us
 
FA Guide Contents Using the Guide What's New 1 Key Terms & Principles 2 Eligibility 3 Rate Calculation 4 Claims & Payments 5 Gathering Information 6 Review & Reconciliation 7 Debts 8 Transitional Arrangements Acronym List Keyword Index Act Section Index Site Map

Print this page Print this page    

3.2.9 Reportable Superannuation Contributions

Summary

This topic explains the assessment of reportable superannuation contributions (1.1.R.35) for the FTB, CCB, SBP and baby bonus income tests.

 

Reportable superannuation contributions

As of July 2009, reportable superannuation contributions are included as a component of ATI for FA purposes.

 

Reportable superannuation contributions include discretionary contributions (also known as concessional or before-tax contributions). These can be split into 2 components:

  • reportable employer superannuation contributions, and
  • superannuation contributions made by self-employed people (personal deductible superannuation contributions).

 

Note: Mandated employer paid superannuation contributions (superannuation guarantee) are not 'reportable employer superannuation contributions' (refer to 1.1.R.35).

 

Act reference: FAAct Schedule 3 clause 2(1)(f) the individual's reportable superannuation contributions...

 

Reportable employer superannuation contributions

Reportable employer superannuation contributions (1.1.R.35) are employer superannuation contributions that could have been received by the employee as income. The reportable employer superannuation contributions are in addition to the legally required employer contributions such as those made under the superannuation guarantee laws or an industrial award. The contribution would also be one in which it could be reasonably expected that the employee had capacity to negotiate with their employer regarding the size of the amount, or the way the amount is contributed so as to reduce their assessable income. A common example is contributions made on the employee's behalf by an employer under a salary sacrifice arrangement.

Example 1: Mary receives a salary of $40,000. Her employer is legally required to contribute 9% (or $3,600) to her superannuation fund. Mary also enters into a salary sacrifice arrangement with her employer, to sacrifice $10,000 of her earnings into her fund.

 

The $3,600 is a legally mandated contribution, and is not a reportable superannuation contribution. Therefore, it does not need to be reported to Centrelink for FA purposes.

 

The $10,000 is an additional contribution paid at the request of Mary by her employer. This is a reportable employer superannuation contribution, and when calculating her FA eligibility, this amount will be counted as a component of Mary's ATI. Although Mary's taxable income is $30,000, her assessable income for the purposes of FA will be $40,000.

 

Note: For the baby bonus and SBP income tests, the amount added back in the above example would be only that portion of the $10,000 received during the relevant 6 month income test period. If the 6 month income test period falls entirely within the income year to which the $10,000 superannuation contribution relates; Mary would need to include half of that amount ($5,000) in her income estimate.

 

Example 2: Mike pays his employees a bonus each year if they meet their performance targets. Under a long standing agreement, one of Mike's employees has elected to have Mike pay the amount of any bonus into their superannuation fund, the amount will be a reportable employer superannuation contribution.

 

Self-employed superannuation contributions

Superannuation contributions made by self-employed people are personal contributions made to a superannuation fund for which an income tax deduction is claimed on an individual's tax return.

 

Assessing reportable superannuation contributions

For the purposes of the baby bonus and SBP income tests, individuals and/or their partners need to state the amount of superannuation contributions they have received for the relevant 6 month income test period. For further details on how the income test period is defined see 4.5.1 for baby bonus and 4.15.1 for SBP.

 

Actual amounts of reportable superannuation contributions used in estimate - FTB & CCB only

An individual who receives FTB by fortnightly instalment or CCB by fee reduction at more than zero rate can update their estimate of ATI with the actual amount of reportable superannuation contributions.

 

Estimates for the purposes of the baby bonus and SBP income tests do not need to be updated, as it is based on the 'best efforts' of the individual and will not be reconciled with actual income (see 3.2.8.10).

 

Reportable superannuation contributions - affected payments

From 1 July 2009, the income test for the following programs include the reportable employer superannuation contributions of an individual and their spouse (where applicable). The other component of reportable superannuation contributions - personal deductible contributions - are already assessed for an individual, and their spouse, for income support program purposes.

  • Austudy payment,
  • bereavement allowance,
  • CP (adult),
  • CP (child),
  • disability support pension,
  • income test, residential aged care,
  • newstart allowance,
  • PP (single or partnered),
  • partner allowance,
  • sickness allowance,
  • special benefit,
  • widow allowance,
  • widow B pension,
  • wife pension, and
  • YA (personal income test).

 

From 1 July 2009 the following payments also assess both reportable employer superannuation contributions and personal deductible contributions, for individuals of all ages:

  • ABSTUDY living allowance (parental income test, family actual means test, personal income test),
  • ABSTUDY (rent assistance),
  • additional boarding allowance, AIC scheme,
  • baby bonus,
  • child care benefit,
  • FTB (Part A),
  • FTB (Part B),
  • higher education loan program,
  • student financial supplement scheme, and
  • YA (parental income test, family actual means test, personal income test).

 

From 1 March 2014, SBP will also assess both reportable employer superannuation contributions and personal deductible contributions, for individuals of all ages.

 

Exceptional circumstances relief payment & interim income support

Schedule 4 to the Tax Laws Amendment (2009 Measures No.1) Act 2009 amends the Farm Household Support Act 1992 to ensure that the income test for exceptional circumstances relief payment, and interim income support, remains unchanged from 1 July 2009.

 

That is, the income test for those programs continues to exclude superannuation contributions made on behalf of individuals below age pension age with the exception of contributions made by companies or trusts on behalf of individuals who are attributable stakeholders of the companies or trusts, or contributions made on behalf of particular associates of attributable stakeholders of companies or trusts as defined in SSAct section 1207C.

 

Act reference: SSAct section 1207C Associates

_______________________________________________________

Last reviewed: 10 February 2014


Previous
Previous
Top
Top
Next
Next





Page Url: ../../../fag/faguide-3/faguide-3.2/faguide-3.2.9.html
Last Edited: 29/01/2014 4:05:03 PM


© Commonwealth of Australia, 2014 All rights reserved