The wealthiest 4% of superannuants face…

(from 1 July 2017)

  • a superannuation transfer balance cap of $1.6 million, which limits the total amount of superannuation that an individual can transfer into retirement phase accounts. This measure does not limit the amount an individual can accumulate in superannuation.
  • removal of the tax exemption for earnings on assets supporting ‘transition to retirement’ income streams.
  • a reduction in the concessional contributions threshold from $300,000 to $250,000, requiring those with combined incomes and superannuation contributions greater than $250,000 to pay 30% tax on their concessional contributions, rather than the standard 15%.
  • lowering the superannuation concessional contributions cap to $25,000 per annum.
  • limiting non-concessional contributions through a lifetime cap for non-concessional contributions of $500,0000.
The other 96% of superannuants will benefit from …

(from 1 July 2017)

The Low Income Superannuation Tax Offsetoverviewlink

Superannuation fund members with a taxable income of up to $37,000 will receive a contribution of 15% of the value of a their concessional contributions up to a cap of $500.

Catch-up concessional superannuation contributions

Individuals with a superannuation balance of less than $500,000 who have not reached their concessional contributions cap in previous years will be allowed to make additional concessional contributions. Unused amounts will be carried forward on a rolling basis for five consecutive years. The measure will also apply to defined benefit scheme members.

Contribution rules for those aged 65 to 74

Individuals under the age of 75 will no longer have to satisfy a work test and will be able to receive contributions from their spouse.

Superannuation balances of low-income spouses

The  Government will increase access to the low-income spouse tax offset, which provides up to $540 per annum for the contributing spouse. This will apply where the low-income spouse’s income is less than $37,000 (up from the current level of $10,800).

Tax deductions for personal superannuation contributions

Anyone up to the age of 75 will be able to claim an income tax deduction for personal superannuation contributions, regardless of employment status. This will simplify eligibility requirements for a member to qualify to claim a deduction for a personal super contribution. It also gives employees more flexibility and allows them to make personal deductible contributions in addition to super guarantee and salary sacrifice contributions, to use up any unused concessional cap at the end of the year.

Anti-detriment payments

Anti-detriment payments are to be abolished. (Current anti-detriment provisions allow a superannuation fund to claim a tax deduction where it is able to increase the amount of a member’s death benefit paid to eligible beneficiaries to compensate for the impact of tax on contributions.)

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