Q. I am 59 with a super account of less than $500,000. With salary sacrifice I had been contributing around $40,000 pa in recent years until limited by the $25,000 cap this financial year. I understand that I can contribute between up to $50,000 pa (without tax penalty) once I am 60. I will be 60 in April 2014. Will I be able to resume my higher contribution rate from 1 July 2013 or will I have to wait until I am 60 for the full financial year i.e. 2014/15?
A. For this financial year (2012/2013), the Concessional Superannuation Contribution cap will still be $25,000pa.
Your reference to $50,000 is incorrect. For the 2013/14 financial year, a higher cap of $35,000 will apply to individuals who are aged 59 years or over on 30 June 2013. From 1 July 2014 and thereafter, this higher cap of $35,000 will apply to individuals aged 49 or over on 30 June in the previous financial year. For all others the general cap of $25,000 continues to apply. Thankfully there is restriction to the higher caps based on assets within your Superannuation fund.
As you will be 59 at 30 June 2013, the higher cap of $35,000 will apply.
Please note that the higher cap has not been passed through parliament and is technically not law yet. Hopefully we will see it passed in the next 8 days!