A superannuation specialist has warned individuals wanting to take advantage of the unused concessional contributions cap carry-forward provisions not rely on ATO information to determine their eligibility to do so.
The caution comes as a result of an anomaly with regard to how the regulator communicates the personal contribution situations of superannuants. Specifically, the Colonial First State (CFS) technical team has identified some circumstances where ATO information services will provide no unused concessional contributions cap carry-forward information.
“Let’s say for the whole of the previous five financial years the client hasn’t made any concessional contributions at all. [This could be a sole trader] or someone who is a non-resident who has been overseas and not been contributing for the last five or more years … or even new migrants to Australia. When they arrive in Australia they will have all of their unused concessional contributions [cap available to them] or young people getting their first job,” CFS technical manager Alex Denham noted.
Denham pointed out ATO information services will have no contribution data for any individuals in these circumstances, but they will still be eligible to use the unused concessional contributions cap carry-forward provisions.
To this end, she emphasised these people will actually be accruing an unused concessional contributions cap amount extending to the previous five financial years, even if this fact is not reflected in the ATO information services data.
She did recognise the regulator has made an effort to address this system feature by way of an alert to superannuants and their advisers.
“When contributions haven’t been made and no data is showing, it is actually my understanding that, and I’ve seen this before, [the service] in fact displays a message saying that the concessional contributions information is not available,” she told listeners of the latest CFS FirstTech Podcast.
“So again we know they are entitled to those unused concessional contributions [caps], it’s just that they need to calculate them manually of how much that would be.”
Darin Tyson-Chan
Editor
Darin is the founder and publisher of Benchmark Media, an independent publishing house whose mastheads include financialobserver, selfmanagedsuper and smstrusteenews. He has been covering the financial services space for over a decade and in this time he has worked for a variety of trade publications. Darin has also written for the Money section published in The Sydney Morning Herald and The Age.
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