The Government will be reducing two concessional contributions caps from 1 July 2009.

The Government will reduce the following two concessional contributions caps:

• From the 2010 income year (i.e., from 1 July 2009), the concessional contributions cap for individuals aged under 50 will be reduced to $25,000 (indexed) per annum (from the existing $50,000 indexed amount) – the ATO previously announced that this cap was going to increase to $55,000 for the 2010 income year.
• The transitional concessional contributions cap (applicable to individuals aged 50 or more for the 2010, 2011 and 2012 income years) will be reduced to $50,000 (non-indexed) per annum (from the existing $100,000).

‘Grandfathering’ arrangements will apply to certain members with defined benefit interests as at 12 May 2009 whose notional taxed contributions would otherwise exceed the reduced cap (similar arrangements were applied when the concessional contributions cap was first introduced).