Completing a Deduction Notice for personal superannuation contributions

This article explains what’s required when you: 

• intend to claim a deduction for personal super contributions, or 
• wish to vary a previous Deduction Notice you gave to the fund.

If you don’t meet these requirements, you won’t be entitled to claim the deduction.

For more information on the conditions that must be met to claim a deduction, go to www.ato.gov.au and search for ‘claiming deductions for personal super contributions’. 

You must give a Deduction Notice to the fund before the earlier of:

• the day you lodge your tax return for the year in which the contributions were made, and
• the end of the financial year after the year in which the contributions were made.

A fund can’t accept an invalid Deduction Notice. A Deduction Notice is invalid if, at the time you submitted it:

• you weren’t a member of the fund (e.g. you’ve withdrawn all of your benefits from the fund)
• the trustee no longer holds the contribution (e.g. you’ve made a partial withdrawal or rollover after making the contribution but before submitting the Deduction Notice)
• the trustee has begun to pay a super income stream in whole or part on the contribution from your account after a contribution was made to that account but before a Deduction Notice is submitted
• you’ve applied to split contributions with your spouse (and the trustee has accepted the application).

You must meet a work test (or work test exemption)  in order for you to claim a tax deduction for contributions you make from age 67 up to the 28th day after the end of the month you turn 75.

• Work test – The work test requires you to be gainfully employed for at least 40 hours in a period of not more than 30 consecutive days in the financial year in which the contribution is made.
• Work test exemption – No work test is required in the financial year following the year you retire, provided: 
  • your total superannuation balance is less than $300,000 as at 30 June of the previous financial year, and 
  • you were gainfully employed for at least 40 hours in 30 consecutive days in the year of retirement.

If you make personal deductible contributions, the ATO applies the  work test (and work test exemption)   when you lodge your income tax return.

If you’ll be 67 or over when you plan to make a personal deductible contribution, we suggest you confirm with your adviser whether you meet the requirements to claim a tax deduction, including the work test (or work test exemption).

Providing a valid Deduction Notice and receiving an acknowledgement of this notice does not automatically result in the contribution counting towards the concessional contribution cap. This will occur when you claim the deduction in your annual tax return.

If you don’t claim a tax deduction for the contribution in your tax return, the contribution counts towards your non-concessional contribution cap, rather than your concessional contribution cap as intended.

If you wish to claim a tax deduction, your adviser can request this directly on your behalf online. If you no longer have an adviser, you can complete and send us the NAT 71121 form available on the ATO website, to wrapsolutions@macquarie.com.

If you wish to increase the amount you want to claim as a deduction and you still meet the requirements, your adviser can submit a second Deduction Notice for the additional amount you wish to claim.

If you don’t have an adviser, you can complete and send us:

• a second Deduction Notice for Personal Contributions form for the additional amount (select ‘No’ for the question ‘Is this Deduction Notice varying an earlier Deduction Notice?’), or
• a NAT 71121 form available on the ATO website.

Example: Increasing the amount being claimed as a tax deduction

John makes a contribution of $20,000 and lodges a Deduction Notice with his super fund to claim a deduction for $15,000. Later (but within the requirements) he decides to increase his claim to $18,000. John must send his super fund another Deduction Notice, advising that he intends to claim an additional $3,000 as a deduction. His super fund will now have two valid Deduction Notices – one for $15,000 and one for $3,000. John should receive two acknowledgment notices from the fund.

In this case, John would complete the Macquarie Super – Deduction Notice for Personal Superannuation Contributions as follows:

• Question: Amount of personal contributions covered by this Notice that you intend to claim as a tax deduction: $3,000
• Question: Is this Deduction Notice varying an earlier Deduction Notice? No

If you wish to reduce the amount you intend to claim as a deduction, your adviser will need to lodge a variation to the original Notice sent to your fund. The variation  replaces the previous valid Deduction Notice and shows the amount of the contributions you now want to claim as a tax deduction.

If you don’t have an adviser, you can complete and send us: 

• a Deduction Notice for Personal Contributions form (select ‘Yes’ for the question ‘Is this Deduction Notice varying an earlier Deduction Notice?’), or 
• a NAT 71121 form available on the ATO website.

Variations can’t be accepted by a fund trustee in circumstances similar to those in which a Deduction Notice is invalid. For a variation to be valid, the same rules apply as for initial Deduction Notices.

Example: Reducing the amount you intend to claim as a deduction

Sarah makes a contribution of $25,000 and lodges a Deduction Notice with her fund to claim a deduction for $25,000. Later, she decides to reduce her claim to $15,000. She must send her fund a new Deduction Notice in order to vary the original Notice, advising that $15,000 is the amount she now intends to claim as a tax deduction.

In this case, Sarah would complete the Macquarie Super – Deduction Notice for Personal Superannuation Contributions as follows:

• In section 2: Amount of personal contributions covered by this Notice that you intend to claim as a tax deduction: $15,000
• In section 3: Is this Deduction Notice varying an earlier Deduction Notice?: Yes