The Government has announced some changes to the superannuation proposals originally announced in the May 2016 Federal Budget.
The Coalition’s proposal is to reduce the existing annual non-concessional (after-tax) contributions cap from $180,000 per year to $100,000 per year. Australians who are under 65 years of age will continue to be able to use the three-year bring forward rule (bring forward three years’ worth of non-concessional contributions ($300,000) from 1 July 2017. The new suggestion replaces the original proposal for a $500,000 lifetime cap on non-concessional contributions made since 2007 announced in the May 2016 Federal Budget, which was opposed by parts of the super industry.
In the meantime, Australians can continue to put $540,000 into their super accounts between now and 1 July 2017. Individuals with a superannuation balance of more than $1.6 million will no longer be eligible to make non-concessional contributions from 1 July 2017. This revised proposal is said to allow more individuals to build a superannuation balance cap to attain a $1.6 million pension balance cap in the retirement phase. To offset the full cost of changes to nonconcessional
contribution arrangements, the start date for catch-up concessional contributions will be deferred by 12 months to 1 July 2018. In addition, the Treasurer has reversed the Budget Measure to harmonise contribution rules for people aged between 65 and 74; providing they satisfy the work test they will still be able to make additional super contributions.
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