The Government will increase the fully deductible amount for superannuation contributions made by self-employed and other eligible persons from $3,000 to $5,000, commencing from 1 July 2002. Contributions above the new, higher fully deductible amount will remain 75 per cent tax deductible with a maximum deduction equal to the taxpayer's age based limit.
This measure was first announced on 5 November 2001 in the policy document A Better Superannuation System.
This measure, combined with the Government's other initiatives, will encourage increased savings and self-reliance in retirement. In particular, the increase in the fully deductible amount will boost the superannuation savings of the self-employed by providing them with an increased incentive to save for their retirement through superannuation.