2009 Federal Budget Follow-up
The Government has introduced a Bill into Parliament seeking to implement three measures announced in the 2009/10 Federal Budget. The Bill will:
- amend the provisions relating to the income tax exemption on foreign employment income;
- temporarily reduce the matching rate and maximum co-contribution for the superannuation government co-contribution; and
- reduce the superannuation concessional contributions cap.
Foreign employment income
Foreign employment income derived by a taxpayer engaged in continuous foreign service for 91 days or more will only be exempted from income tax if the service is attributed to specific activities. For example, the delivery of Australia’s overseas aid program by the taxpayer’s employer.
Superannuation co-contribution
The Bill will temporarily reduce the matching rates and maximum co-contribution for the government co-contribution as below:
- for the 2009/10 to 2011/12 income years, $1 for each dollar of contribution, up to a maximum of $1,000 per annum;
- for the 2012/13 and 2013/14 income years, the rate is $1.25 for each dollar of contribution, up to a maximum of $1,250 per annum; and
- for 2014/15 and later income years, the rate is $1.50 for each dollar of contribution, up to a maximum of $1,500 per annum.
Superannuation concessional contributions cap
The Bill will reduce the concessional contributions cap to $25,000 per annum from 1 July 2009.
The Bill will also reduce the transitional concessional contributions cap, which applies until the 2011/12 income year for individuals aged 50 to 74, to $50,000 per annum.
The non-concessional contributions cap will remain at $150,000 for the 2009/10 income year.
