Personal super deductions: remember the notice

If you are considering making a personal contribution to your super and would like to claim a deduction on the contributions made, it is important to remember to give the required notice to your super fund before making a claim in your tax return. There have been cases of taxpayers being denied deductions for personal super contributions made where the required notice to a super fund was not made on time.

There are a few different types of contributions that can be made to super funds. These include compulsory super guarantee that is paid by an employer, salary sacrifice super amounts usually paid from before-tax income, reportable employee super contributions such as having a bonus paid directly into super, and personal contributions to super funds made from after-tax income.

With regard to personal contributions to super funds made from after-tax income, a deduction can only be claimed by an individual if eligibility requirements are met. A deduction for a personal contribution can be claimed if the income earned came from salary and wages, a personal business, investments, government pensions or allowances, superannuation, partnership or trust distributions, or a foreign source.

An individual between 67 to 74 years old must also meet the work test or satisfy the work test exemption criteria to be able to claim a deduction for any personal contributions made. To satisfy the work test, an individual must work at least 40 hours during a consecutive 30 day period each income year. For those individuals 75 years or older, a deduction for personal contributions can only be claimed if made before the 28th day of the month following the month in which they turned 75.

Provided an individual satisfies the eligibility criteria and has made a personal contribution for the year, a notice of intent to claim or vary a deduction must be made to the super fund by the earlier of: the day you lodge your tax return for the year in which you made the contributions; or the end of the income year following the one in which you made the contributions.

The ATO provides a standard form for giving this notice to super funds. However, many super funds have their own online forms which can be lodged easily. A super fund will then send a written acknowledgment indicating that they have received a valid notice from an individual. Only then can a claim for deduction in your tax return be made. Remember, the notice must be given “earlier of” the two options, so if an individual inadvertently forgets to give notice by the time the tax return is lodged, they will be unable to claim a deduction for the personal contributions made for the year.

Cases have shown that there is no discretion in s 290-170, or in any other provision of legislation, to extend the time for giving the notice or to disregard non-compliance with the time frame specified in s 290-170, even if the delay is caused by external factors.

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