Since the introduction of Better Super, the threat of RBLs disappeared only to be replaced by the threat of attracting excess contributions tax. The ATO has noted that current data indicates around 24,000 people may have exceeded a contributions cap in the 2008 financial year. The potential to exceed the contributions caps in the current financial year is possibly even greater, given the halving of the concessional contributions cap.
Whether contributions caps have been exceeded will depend on the value of contributions made, what is counted as a contribution and in which financial year the contribution was made.
As mistakes around the calculation of the contributions caps can be extremely costly, understanding contributions, the implications of exceeding the contributions caps and what to do if issued with an excess contributions tax assessment from the Commissioner is vital.
The event covered understanding contributions and excess contributions.