In the May Budget the Government announced it was making changes to super. Since then they have reviewed and announced changes to their original plans. These come into effect on 1 July 2017. The key changes announced include:
- Annual concessional contribution caps reduced to $25,000 for all members regardless of age.
- Annual non concessional contribution caps reduced to $100,000 for all members with a restriction for members with a balance exceeding $1.6 million.
- Removal of tax free treatment of transition to retirement pension assets. Earnings from investments held in a Transition to Retirement Income Stream (TRIS) will no longer be exempt and will be taxed at 15% regardless of the date the TRIS commenced. Members will also no longer be able to treat super income stream payments as lump sums for taxation purposes.
- Cap on the amount an individual can transfer into the tax-free retirement phase of $1.6 million and will be indexed in line with the consumer price index (CPI), rounded down to the nearest $100,000.
- Reduction in the threshold at which high income earners pay additional contributions tax (from $300,000 to $250,000).
- Removal of the 10% rule allowing all tax payers under the age of 75 to claim a tax deduction for their additional concessional contributions made.
Superannuation contribution caps for the financial years 2017 and 2018
Concessional contributions cap
Non-concessional contributions cap
2017 and 2018 bring-forward rules
Modification of the bring forward rule – transitional
If you have triggered the bring-forward period in 2015-16 or 2016-17 but you have not fully used your bring-forward amount before 1 July 2017, transitional arrangements will apply. This means that the maximum amount of bring-forward available will reflect the reduced annual contribution caps
PDF version of these updated can be downloaded here. If you would like to discuss the above or need more information, please contact our office on 02 8188 3450.