When you make a non concessional contribution to a Superannuation Fund you are not permitted to claim a tax deduction for it and therefore the contribution is not taxed by the Superannuation Fund. Refer Section 292-90 Income Tax Assessment Act 1997 (ITAA 1997).Even though a tax deduction is forgone, there are still several advantages to making non concessional contributions, including:

1.    The earnings on the contribution made to the fund will be taxed at 15%.  If the investment was held outside the fund, (i.e., the individuals name) the earnings on the investment could potentially be taxed at the top marginal rate of 46.5%.

2.    If you retire or enter into a TRIS before age 60 and receive a pension or lump sum the non concessional component will not be taxed.

3.    Once you are deceased and the superannuation benefit is paid to a non dependent the non concessional component will not be taxed. Refer Section 302-140 ITAA 1997.

4.    In most cases assets held inside the superannuation fund are protected from creditors in the event of bankruptcy.