Completing a Deduction Notice for Personal Superannuation Contributions

This article is aimed at helping you understand the requirements where you intend to claim a deduction for personal super contributions or where you wish to vary a previous Deduction Notice you gave to the Fund.

The requirements and timeframe to submit a Deduction Notice are summarised in this article. If these requirements are not met, you will not be entitled to claim the deduction.

A Deduction Notice must be given 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 cannot accept an invalid Deduction Notice. A Deduction Notice is invalid if, at the time you gave the Deduction Notice:

• you were not a member of the Fund, for example, you have withdrawn all of your benefits from the Fund
• the Trustee no longer holds the contribution, for example, you have 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 have applied to split contributions with your spouse (and the Trustee has accepted the application).

A work test (or work test exemption) must be met 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.

The work test (and work test exemption) for individuals making personal deductible contributions will be administered by the ATO when they lodge their income tax return.

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

If you wish to increase the amount that you want to claim as a deduction, you can do so provided you still meet the requirements specified above for lodgement of the Deduction Notice. However, this change in amount is not a variation to the original Deduction Notice. Instead, you need to lodge a second Deduction Notice specifying the additional amount you wish to claim.

In the new Deduction Notice, select ‘No’ for the question ‘Is this Deduction Notice varying an earlier Deduction Notice?’.

Providing a valid deduction notice to the Fund doesn’t automatically result in the claiming of a tax deduction. You must claim the deduction when you complete your annual tax return.

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

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 deduction to $18,000. John must send his super fund another Deduction Notice, advising that he now also intends to claim $3,000 as a deduction. His super fund will now have two valid Deduction Notices – one Deduction Notice for $15,000 and one Deduction Notice 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, you will need to lodge a variation to the original Notice sent to your fund. The variation does not alter a previous Deduction Notice; instead, it is a new Deduction Notice which replaces a previous valid Deduction Notice and shows the amount of the contributions which you now want to claim as a tax deduction.

In the new Notice, select ‘Yes’ for the question ‘Is this varying an earlier Deduction Notice?’ in section 3.

Variations are ineffective in circumstances similar to those in which a Deduction Notice is invalid. For example, a variation submitted after a pension has commenced based in whole or part on the contribution cannot be accepted by a Fund Trustee. 

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 deduction 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