Commonwealth Seniors Health Care card holders and those claiming tax deductions for personal superannuation contributions under the 10% test may be significantly impacted by the new rules.
Effective from the 1st July 2009, the CSHC income test will be broadened to include in adjusted taxable income the following amounts:
- Tax free superannuation pension payments
- Tax free superannuation lump sum payments
- Salary sacrifice superannuation payments (excluding SG requirements) and
- Personal superannuation contributions which are tax deductible
The impact of this change may be to bump individuals over the $50,000 income threshold and couples over the $80,000 threshold. This is especially the case if major lump sum withdrawals are made.
The 10% test for personal deductible superannuation contributions will from July 1st include salary sacrifice superannuation contributions.
This makes it that touch harder for some to fall within the less than 10% of income being earned from work and therefore be unable to claim a tax deduction for personal contributions into superannuation. This may be particularly significant for those who receive a significant percentage of their income from other sources but not quite over 90% - including capital gains from the sale of property for instance. As such these individuals may be limited as to how much they can contribute into superannuation in order to receive a tax deduction.
If either of these changes relate to your situation please do not hesitate to get in contact to discuss in more detail.