In media release No 2011/122, issued 17 August 2011, the Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, announced the release of a consultation paper discussing proposed changes to excess concessional superannuation contribution caps.
Individuals who breach their concessional contributions caps by up to $10,000 for the first time will be given the option to have the excess concessional contributions refunded to them.
For individuals who exercise this option, the excess concessional contributions will be included in their assessable income and taxed at their marginal rate, subject to a refundable tax offset equal to 15% of the excess concessional contributions. This offset recognises the tax effectively already paid by the fund on the excess concessional contributions and ensures that double taxation does not occur. The excess concessional contribution will not count towards the non-concessional contributions cap.
The employer is not involved in the new refund process and so will not be affected by this measure.
Interested parties are invited to make written submissions on the consultation paper by 7 September 2011.