How will the proposed changes to superannuation effect you?
The Government recently announced the following proposed changes to those made in the recent Federal Budget.
- The annual non-concessional contribution (NCC) to Super, that is the contribution you make from your personal savings that are not tax deductible, will be $100,000 per year instead of the existing $180,000. This will be effective from 1 July 2017.
- Once your superannuation fund has a balance of $1.6Million you cannot make any more non-concessional contributions (NCC) to your superannuation fund.
- Once your superannuation balance is over $1.6Million you can make concessional contributions (CC), these are the tax deductible contributions but the earnings on these funds will be taxed at 15% even though you may be in pension stage.
- The $500,000 lifetime cap has been scrapped.
- If you are aged under 65 you can still make three years non-concessional contributions in one year.
- If you are aged between 65 and 75 you can now only contribute to your superannuation fund if you pass the work test.
- The reduction in the concessional contribution cap to $25,000 a year still applies from 1 July 2017.
- For those earning under $37,000 per year you will continue to have the superannuation tax deducted from your contributions refunded back to your fund to help you grow your superannuation balance.
- The low income threshold tax offset increases from $10,800 to $37,000 and phases out at $40,000. This is where a spouse contribution $3,000 or more to a low income spouse’s superannuation account, provided the low income spouse is receiving remuneration for their labour.
Should you require any information on the proposed changes to superannuation please contact Peter Quinn by submitting an online enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment.
The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.