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The ATO advises that at the end of June 2013, the Government passed legislation enacting the "Sustaining the Superannuation Contribution Concession" measure.

The legislation is contained in Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013 and Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Act 2013.

The measure was originally announced in the 2012 federal Budget as a reduction of the higher tax concession for contributions of very high income earners. The very high income earner threshold is set at $300,000 (calculated by reference to income for surcharge purposes, disregarding reportable superannuation contributions, and concessionally taxed contributions, less excess concessional contributions).

The law now includes Division 293 in ITAA 1997. In this Division, the tax applied is referenced as "Division 293 tax".

Division 293 tax will be charged at 15% of an individual’s taxable concessional contributions above the $300,000 threshold (which are capped for 2012–13 at $25,000). For individuals who are members of a defined benefit fund, Division 293 tax may be calculated on notional contributions, which are not capped.

The ATO also advises that tax agents may start receiving correspondence for clients with high incomes referencing Division 293 tax from February 2014.

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