Superannuation Reform Bills were passed by Parliament on 23 November 2016 which will have significant impact on Australians saving for their retirement. We would encourage you to ensure you have considered all changes before making any further contributions to superannuation.
Here is a short list of the major changes proposed around contributions with everything subject to legislation:
1. Maximum concessional contribution cap from 1 July 2017 is $25,000. This is the amount paid on your salary or personal payments eligible for tax deduction.
2. Personal deductions will be allowed for all individuals for superannuation contributions, regardless of employer support up to concessional limit from 1 July 2017.
3. The work test will remain in place for 65-75 year olds (40 hours in 30 days) for both concessional and non-concessional contributions (NCC).
4. Reduction of NCC annual cap from $180,000 to $100,000 from 1 July 2017 – 3 year bring forward rule still allowed if under 65 on 1st July each year.
5. Introduction of balance cap for NCCs – when the member super balance is greater than $1.6m you cannot make further NCC's. From 1 July 2017.
6. New ‘catch up’ for concessional contributions (ie 5 year catch up proposed in budget) has a delayed start date of 1 July 2018.
7. Lowering the income threshold for Division 293 tax from $300,000 to $250,000.
For more information, please contact one of the Sullivan Dewing accounting team.