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INCOME TAX ASSESSMENT ACT 1997 - SECT 960.285

Indexation--superannuation and employment termination

  (1)   This section applies in relation to the amounts listed at items   8 to 12 in section   960 - 265.

Indexing amounts

  (2)   You index the amount by:

  (a)   first, multiplying its base amount mentioned in subsection   (3) by its * indexation factor mentioned in subsection   (5); and

  (b)   next, rounding the result in paragraph   (a) down to the nearest multiple of its * rounding amount.

Example 1:   An amount of $140,000 is to be indexed, with a rounding amount of $5,000. If the indexation factor increases this to an indexed amount of $143,000, the indexed amount is rounded back down to $140,000.

Example 2:   An amount of $140,000 is to be indexed, with a rounding amount of $5,000. If the indexation factor increases this to an indexed amount of $146,000, the indexed amount is rounded down to $145,000.

  (3)   The amount (the base amount ) for an amount to which this section applies is:

  (a)   unless paragraph   (b) applies--the amount for the 2007 - 2008 income year or * financial year; or

  (b)   if the amount is mentioned in item   9 or 10A in section   960 - 265--the amount for the 2017 - 2018 financial year.

  (4)   You do not index the amount if the * indexation factor is 1 or less.

Indexation factor

  (5)   For indexing an amount, its indexation factor is:

Start formula start fraction *Index number mentioned in subsection (7) for the *quarter ending on 31 December just before the start of the relevant income year or *financial year over *Index number mentioned in subsection (7) for the base quarter end fraction end formula

where:

"base quarter" means:

  (a)   unless paragraph   (b) applies--the quarter ending on 31   December 2006; or

  (b)   if the amount is mentioned in item   9 or 10A in section   960 - 265--the quarter ending on 31   December 2016.

  (6)   You work out the * indexation factor mentioned in subsection   (5) to 3 decimal places (rounding up if the fourth decimal place is 5 or more).

Index number and rounding amount

  (7)   For indexing an amount to which this section applies:

  (a)   the index number for a * quarter is set out in column 2 of the relevant item in the following table; and

  (b)   the rounding amount is set out in column 3 of that item.

 

Concepts for indexing rounded caps

Item

Column 1
Item in section   960 - 265

Column 2
Index number

Column 3
Rounding amount

1

Items   8, 10, 11 and 12

the * index number mentioned in subsection   960 - 280(4) (which is about average weekly ordinary time earnings)

$5,000

2

Item   9 (concessional contributions cap)

the * index number mentioned in subsection   960 - 280(4) (which is about average weekly ordinary time earnings)

$2,500

3

Item   10A (general transfer balance cap)

the * index number mentioned in subsection   960 - 280(1) (which is about the CPI)

$100,000


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