Significant Changes to Superannuation

On Thursday 15 September 2016, the government announced a number of compromises to the superannuation changes it originally put forward in the 2016 – 2017 Budget.

Following extensive consultation, the government has decided to amend the superannuation changes and support Australians to invest in superannuation with the main objective of providing an income for retirement.

Instead of the introduction of a $500,000 lifetime non-concessional cap, they are revising the existing annual non-concessional cap as follows:

• Annual non-concessional contribution cap to be lowered from $180,000 to $100,000.
• The “bring forward” of three years worth of non-concessional contributions to be maintained for those under 65.

Anyone with a superannuation balance over $1.6 million will be ineligible to make non-concessional contributions. Other Budget superannuation announcements that have changed:

• The work test will remain for those aged 65 to 74 wanting to make superannuation contributions.
• The proposed catch-up concessional contributions will now commence from 1 July 2018. Unused concessional contributions will accrue from 1 July 2018 on a rolling basis for a period of 5 years.

If you have any questions regarding these changes, please contact us at McSweeney CA.