Refund of excess contributions tax enacted
The Gillard Government has enacted regulations to enable an estimated 30,000 individuals to benefit from refund of certain excess concessional contributions.
Eligible individuals will have a one-time option to have excess concessional contributions of up to $10,000 refunded to them. The excess concessional contributions will be assessed as income for the year of the excess contributions rather than subject to excess contributions tax. This applies to contributions made since 1 July 2011. The refund measure was announced in the 2011‑12 Budget.
Minister for Financial Services and Superannuation Bill Shorten said that the refund measure will make our superannuation system fairer. Now that the final piece of the legislation is in place, the Australian Taxation Office (ATO) will be able to make its first refund offers later this year.
The regulations were made at yesterday's meeting of the Executive Council. The changes are contained in the Superannuation Industry (Supervision) Amendment Regulation 2012 (No. 3) and the Retirement Savings Accounts Amendment Regulation 2012 (No. 2).
The regulations allow superannuation providers to release the excess contribution to the ATO. The ATO will typically then provide any refund to the individual after any personal income tax is paid.
"The refund offer will be automatically offered to eligible individuals by the ATO, and funds will be able to use existing administrative processes. This will minimise the compliance cost on the industry and individuals," Mr Shorten said.
17 August 2012