3.2.9 Reportable superannuation contributions
Reportable superannuation contributions
Reportable superannuation contributions include discretionary contributions (also known as concessional or before-tax contributions). These can be split into 2 components:
- reportable employer superannuation contributions, and
- personal deductible superannuation contributions.
Note: Mandated employer paid superannuation contributions (superannuation guarantee) are not 'reportable employer superannuation contributions'.
Act reference: FAAct Schedule 3 clause 2(1)(f) the individual's reportable superannuation contributions …
Reportable employer superannuation contributions
Reportable employer superannuation contributions are employer superannuation contributions that could have been received by the employee as income. The reportable employer superannuation contributions are in addition to the legally required employer contributions such as those made under the superannuation guarantee laws or an industrial award. The contribution would also be one in which it could be reasonably expected that the employee had capacity to negotiate with their employer regarding the size of the amount, or the way the amount is contributed so as to reduce their assessable income. A common example is contributions made on the employee's behalf by an employer under a salary sacrifice arrangement.
Example 1: Mary receives a salary of $40,000 in the 2016-17 income year. Her employer is legally required to contribute 9.5% (or $3,800) to her superannuation fund. Mary also enters into a salary sacrifice arrangement with her employer, to sacrifice $10,000 of her earnings into her fund.
The $3,800 is a legally mandated contribution, and is not a reportable superannuation contribution. Therefore, it does not need to be reported to Centrelink for FA purposes.
The $10,000 is an additional contribution paid at the request of Mary by her employer. This is a reportable employer superannuation contribution, and when calculating her FA eligibility, this amount will be counted as a component of Mary's ATI. Although Mary's taxable income is $30,000, her assessable income for the purposes of FA will be $40,000.
Note: For the SBP income test, the amount added back in the above example would be only that portion of the $10,000 received during the relevant 6 month income test period. If the 6 month income test period falls entirely within the income year to which the $10,000 superannuation contribution relates; Mary would need to include half of that amount ($5,000) in her income estimate.
Example 2: Mike pays his employees a bonus each year if they meet their performance targets. Under a long standing agreement, one of Mike's employees has elected to have Mike pay the amount of any bonus into their superannuation fund, the amount will be a reportable employer superannuation contribution.
Personal deductible superannuation contributions
Personal deductible superannuation contributions are personal contributions made by a self-employed person or by an employee to a superannuation fund for which an income tax deduction is claimed on an individual's tax return.
Assessing reportable superannuation contributions
For the purposes of the SBP income test, individuals (1.1.I.90) and/or their partners (1.1.P.30) need to state the amount of superannuation contributions they have received for the relevant 6 month income test period. For further details on how the income test period is defined see 4.15.1.
Actual amounts of reportable superannuation contributions used in estimate - FTB, CCS & ACCS only
An individual who receives FTB by fortnightly instalment or CCS or ACCS, can update their estimate of ATI with the actual amount of reportable superannuation contributions.
Estimates for the purposes of the SBP income test do not need to be updated, as they are based on the 'best efforts' of the individual and will not be reconciled with actual income (18.104.22.168).
Reportable superannuation contributions - affected payments
The income test for the following programs include the reportable employer superannuation contributions of an individual and their spouse (where applicable). The other component of reportable superannuation contributions - personal deductible contributions - are already assessed for an individual, and their spouse, for income support program purposes.
- austudy payment
- CP (adult)
- CP (child)
- disability support pension
- income test, residential aged care
- jobseeker payment
- PP (single or partnered)
- partner allowance
- special benefit
- widow allowance
- YA (personal income test).
Widow allowance and partner allowance will cease on 1 January 2022.
The following payments also assess both reportable employer superannuation contributions and personal deductible contributions, for individuals of all ages:
- ABSTUDY living allowance (parental income test, family actual means test, personal income test)
- ABSTUDY (rent assistance)
- additional boarding allowance, AIC scheme
- child care benefit
- child care subsidy
- additional child care subsidy
- FTB Part A
- FTB Part B
- higher education loan program
- student financial supplement scheme, and
- YA (parental income test, family actual means test, personal income test).
From 1 March 2014, SBP also assesses both reportable employer superannuation contributions and personal deductible contributions, for individuals of all ages.
Exceptional circumstances relief payment & interim income support
Tax Laws Amendment (2009 Measures No.1) Act 2009 Schedule 3 amends the Farm Household Support Act 1992 to ensure that the income test for exceptional circumstances relief payment, and interim income support, remains unchanged from 1 July 2009.
That is, the income test for those programs continues to exclude superannuation contributions made on behalf of individuals below age pension age with the exception of contributions made by companies or trusts on behalf of individuals who are attributable stakeholders of the companies or trusts, or contributions made on behalf of particular associates of attributable stakeholders of companies or trusts as defined in SSAct section 1207C.
Act reference: SSAct section 1207C Associates