From 1 July 2017, the annual limit on after-tax contributions (known as non-concessional contributions) dropped from $180,000 to $100,000 for most people and to zero for individuals who had total superannuation balances of $1.6 million or more on 30 June 2017.
If you’re a member of either the Commonwealth Superannuation Scheme (CSS) or Public Sector Superannuation Scheme (PSS) then you generally have to make after-tax personal contributions into the scheme or take a hit to your ongoing benefit accruals and growth.
Likewise, members of the two military schemes, DFRDB and MSBS, currently have no option but to pay after-tax member contributions unless they have reached their maximum benefit limits.
If your total superannuation balance was over the $1.6 million on 30 June 2017, your member contributions to your defined benefit scheme could become excess non-concessional contributions and subject to further taxation.
At some stage after the end of the financial year, the Australian Taxation Office (ATO) will tell you whether you have excess non-concessional contributions for that year and your options in relation to them.
You may be able to avoid the excess non-concessional contributions tax by asking the ATO to release an equivalent amount from your other superannuation accumulations (if the fund’s rules allow).
You generally won’t be able to have this released from your defined benefits though. So if you wanted to avoid the additional tax in this way, the released amount would need to be from your other superannuation accumulations or funds (if any).
Please remember that taxation is only one of the things to consider when making financial decisions.