Member Contributions You Can Accept Into Your SMSF

The Australian Taxation Office has recently announced a temporary measure to assist self-managed super funds (SMSFs) with rollovers from an SMSF and between SMSFs, along with allowing contributions to be accepted into an SMSF.

There are minimum standards for accepting contributions as per the ATO, but in addition, the trust deed of your fund may have even more rules. A contribution is allowable or not depends on:

  • Whether you have the member’s tax file number (TFN) – if not, you can’t accept a contribution.
  • You can accept mandated employer contributions, such as super guarantee contributions from a member employer.
  • You can’t accept non-mandated contributions for members of age 75 years or older.
  • The contribution exceeds the member’s fund-capped contributions limit.
  • You can’t accept an asset as a contribution from a member.

You’ll need an electronic service address (ESA) to receive the associated SuperStream data for receiving contributions from employers for your SMSF.

When a member joins your fund, you need to ask for their TFN. This TFN must be provided to the ATO when registering the fund or on new member joinees. A member need not have to provide their TFN, if:

  • Your fund can’t accept member contributions, such as personal and eligible spouse contributions
  • Your fund has to pay extra tax on some contributions made to that member’s account
  • The member is unable to receive super co-contributions
  • ATO can’t identify the member from the other information you’ve provided

Mandated & Non-mandated Employer Contribution

Mandated employer contributions are those made by an employer under a law or industrial agreement for the benefit of a fund member, whereas non-mandated contributions are made by employers over and above their super guarantee or award obligations.

Mandated contribution includes super guarantee contributions, whereas non-mandated ones include:

  • Personal Contributions
  • Downsizer Contribution
  • Super Co-Contributions
  • Eligible Spouse Contributions
  • Third Party Contributions
  • COVID-19 Early Release Re-contribution

Non-mandated member contributions can only be accepted if you have the member’s tax file number (TFN). To know more about the contributions you can accept into your SMSF, feel free to schedule a consultation with our tax accountants at KPG Taxation.

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