Members who wish to claim a tax deduction for personal superannuation contributions made in the 2024–25 financial year, it is critical to ensure that every prescribed step is completed. Any missing or incomplete step means that the Commissioner of Taxation cannot, under any circumstances, grant an exception.
The following key requirements must be met:
1. Payment Contribution
A genuine payment must be made to a superannuation fund within the 2024–25 financial year. This step is the foundation for any subsequent claim.
2. Complying Superannuation Fund
The contribution must be directed to a fund that meets the requirements to be classified as a complying superannuation fund. This ensures that the fund operates under the relevant regulatory framework.
3. Age-Related Conditions
General Age Criteria: At the time of the contribution, the contributor must be aged at least 18 but younger than 67.
For Contributors Aged 67 or More: They must satisfy the “40 hours in 30 consecutive days” work test within the 2024–25 financial year.
Work Test Alternative (Last Drinks Deduction): If the work test is not met, the contribution may still qualify under the “last drinks” exception provided that:
The contributor met the gainful employment requirement (40 hours in 30 consecutive days) in the previous financial year (2023–24), and
Their total superannuation balance was below $300,000 as at 30 June 2023.
Important Note: This “last drinks” exception can only be applied once.
4. Age 75 Requirement
The contribution must either be made before the contributor turns 75 or, if made after reaching 75, must occur within 28 days following the end of the month in which they attain that age.
Excluded Contributions
Certain contributions are not eligible for a tax deduction:
Recontributions of amounts previously released under the First Home Super Saver Scheme or COVID-19 release schemes.
Contributions that are considered downsizer contributions cannot simultaneously be claimed as deductible personal contributions.
Notice of Intent to Claim a Tax Deduction
To support the tax deduction claim, the contributor must provide an approved notice of intent to the trustee of the superannuation fund. Key points include:
Timing:
The notice must be given before lodging the personal income tax return for the 2024–25 financial year.
It can be submitted before, at the time of, or after the contribution—but no later than the end of the financial year (or by 30 June 2026 if the return is delayed).
Validity Conditions:
The notice must be provided while the contributor is still a member of the fund.
It must be given while the trustee still holds the contribution.
It must be received before the trustee issues any pension that is based, wholly or partly, on that contribution.
Trustee Acknowledgement:
The trustee is required to acknowledge receipt of the notice. This acknowledgement is essential to substantiate the claim for the deduction.
Impact on Tax Treatment:
Even if the notice is given, the contributor must still claim the deduction in their tax return. Failing to do so will result in the contribution being treated as non-concessional.
If the contributor has insufficient taxable income, the allowable deduction will be reduced accordingly, as a tax deduction cannot generate a tax loss.
In cases where the claimed deduction exceeds the amount supported by taxable income, a notice of variation may be lodged (again, subject to the same timing and validity conditions) to adjust the claimed amount.
Strict Enforcement of Requirements
Recent guidance (as seen in Private Binding Ruling 1052268337540) reinforces that every statutory requirement must be strictly followed. The legislation clearly stipulates the deadlines and conditions, and the Commissioner of Taxation does not possess the authority to modify or overlook any of these requirements. Trustees should be advised that once the trustee acts based on the contribution’s initial treatment (for example, by rolling over the amount to another fund), it is impossible to reverse the designation from non-concessional to concessional.
Conclusion
For trustees of self-managed super funds, ensuring compliance with all these steps is non-negotiable. Every condition—from making a valid payment and ensuring the fund is complying, to meeting age-related tests and providing the correct notice of intent—is crucial. Non-compliance with any single element will result in the inability to claim a tax deduction, as the ATO rigorously adheres to these legislative requirements.
By diligently following these guidelines, trustees can effectively assist members in navigating the complexities of claiming tax deductions for personal superannuation contributions.
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