Non-concessional contributions are the voluntary contributions that you can make into your super account but the contribution is already taxed amount.
To be eligible for Non-Concessional contributions your age needs to be under 75 years. Anyone under 65 years of age is eligible for non-concessional contribution within the cap limit.
If you are above 65 and below 75 then you are eligible for non-concessional contribution within the cap subject to work test. The work test means that you are gainfully employed that is, self-employed or employed for gain or reward in any business, trade, profession, or employment for at least 40 hours in any period of not more than 30 consecutive days during the relevant financial year.
One advantage is that for non-concessional contributions is that returns on the investments are taxed at 15%, all super fund earnings are taxed at this rate
For example, for tax year 2015/2016 non-concessional contributions yearly cap is set at $180,000 for members over 65 years and less than 75 years. If you are under 65 years of age you can contribute up to $540,000 for 2015/2016 financial year and you will not be able to contribute anything for the next 2 years under bring forward option, this option can be distributed in a three -year time frame.
The following table species the limit under the cap and bring forward option for each year.
|Income year||Cap||Bring Forward option|
You need to complete the application form and associate your TFN to the super fund in order to do this non-concessional contribution. If the fund doesn’t have your TFN you can’t make after-tax contributions.
If you exceed the cap the excess is liable to tax at the rate of up to 47% (plus 2% Medicare levy).