Superannuation Changes – A Summary - December 2016

  • 23 November 2016 super reforms passed through parliament


  • Objective of superannuation

Provide income in retirement to substitute or supplement the Age Pension

Intended to encourage people to save for retirement rather than an opportunity for tax minimisation.

  • Transfer balance cap

$1,6mil transfer balance cap – into tax free retirement phase

Excess taxed at 15% in accumulation account

  • Concessional super contributions

From 1/7/17 concessional cap will be $25,000

From 1/7/17 person earning over $250,000 pays 30% on all concessional contributions

Any excess over the $25,000 cap is taxed at taxpayer’s marginal rate

  • Annual non-concessional cap

From 1/7/17 cap reduces from $180k per year to $100k

Taxpayers with >$1,6mil in super are not allowed to make further non-concessional contributions

  • Improved access to concessional contributions

Currently – take total income – if greater than 10% is earned from salaries & wages, then any personal contributions are non-deductible.

From 1/7/17 the 10% rule is eliminated from the equation.

  • Catch up concessional contributions

From 1/7/18 if you have a super balance of less than $500k you will be allowed to catch up concessional contributions for up to 5 years.

  • Transition to retirement income streams

From 1/7/17 the earnings from these income streams will be taxed at 15% rather than zero.

This will ensure that TRIS is not used as a tax minimisation strategy


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