Changes to Superannuation
Changes to Superannuation from 1st July 2017 are the most significant in a decade. The changes aren’t limited to those with large superannuation balances or people on a higher income.
If you would like to discuss these changes or any strategies that need to be implemented before 30th June 2017, make an appointment for a consultation.
The annual concessional contribution cap will reduce to $25,000 p.a. for everyone. For the year ending 30th June 2016 the caps are $35,000 for members aged 49 or over otherwise it is $30,000.
The annual non concessional contributions cap will be lowered from $180,000 to $100,000 p.a. The final opportunity to contribute $540,000 under the current non concessional caps must be made before 30th June 2017.
A low income superannuation tax offset may be available on your concessional contributions if you income is less than $37,000 p.a.
The Spouse Superannuation Tax Offset will be expanded by raising the income threshold for the spouse to $40,000 p.a.
If you have a superannuation account balance of more than $1.6m you will no longer be able to make non-concessional contributions
Earnings in your superannuation fund for income earned on transition to Retirement income streams will now be taxed up to 15% whereas they were previously tax free.
There will be a $1.6m cap on the total amount you can transfer or hold in a tax free retirement income stream product.
Currently if you are an employee you are only able to make concessional superannuation contributions through a salary sacrifice arrangement. From 1st July 2017 employees will be able to make direct contributions to their superannuation fund.
From 1st July 2018 onwards, if you fail to use your annual concessional contribution cap of $25,000 then you can carry forward the unused portion for up to 5 years , provided you have a total superannuation balance of less than $500,000.