To get a Bill through the Senate (Treasury Laws Amendment (More Flexible Superannuation) Bill 202) the government agreed to two changes two super proposed by One Nation.
The most important of the two changes is that from 1 July 2021 a taxpayer cannot claim a deduction for a re-contribution of a COVID-19 early release amount received during 2019-20 or 2020-21… And this continues to apply all the way from 1 July 2021 until 30 June 2030.
The Commissioner has warned taxpayers not withdraw their superannuation and re-contribute it to gain a personal tax deduction. But now there is no deduction available.
The way it works is, if you took out $10k under the COVID-19 early release scheme, before you can make a personal concessional contribution from 1 July 2021, you need to make $10k of non-concessional contributions n- effectively return this amount to super.
In a media release, the Treasurer said individuals who released superannuation under the COVID-19 early release scheme will still have the option of recontributing these amounts as non-concessional contributions over and above the existing caps but I can’t see in the legislation how this is can be above the existing non-concessional contribution caps (maybe this will be in future Bills).
Australians will also be supported to make additional contributions to their superannuation to make up for amounts that they may have withdrawn due to COVID-19. From the 2021-22 financial year, individuals who released superannuation under the COVID-19 early release scheme will have the option of recontributing these amounts as non-concessional contributions, over and above the existing caps.Treasurer’s Press Release
So if you took money out of super under the COVID-19 concessions, you will need to contribute it back as non concessional contributions…
I am sure I am going to remember in 2030 when my client says for the first time ever they want to make a concessional super contribution that they are denied a deduction as they took amounts out of super under COVID-19…
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