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SUPERANNUATION REFORMS – the $500,000 cap is out

After the long wait, the government has announced changes to the superannuation reforms that were proposed in the last budget.

The changes are supposed to make superannuation fairer, more flexible and sustainable.

What’s out?

The good news …

The main change is that there will no longer be $500,000 lifetime cap on non-concessional superannuation contributions, which was supposed to be backdated to 2007.

What’s in?

  • Reduction in annual non-concessional contributions cap to $100,000 a year from 1 July 2017 (down from $180,000).
  • The under 65s can still “bring forward” three years’ worth of non-concessional contributions
  • Those with superannuation account balance of more than $1.6 million can’t make non-concessional (after tax) contributions after 1 July 2017.
  • Individuals aged 65 to 74 will still need to satisfy the work test to be able to make additional contributions to superannuation.
  • The proposed “catch-up” concessional contributions will start from 1 July 2018 (delayed by a year).

The redesigned package was ticked off by cabinet on Wednesday night and approved by the Coalition party room on Thursday morning.

You can find the media release on the treasury website.

We attached the most relevant fact sheet HERE, with more detailed information available at www.treasury.gov.au/SuperReforms

 

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