Super Reforms passed through parliament
A little while ago we posted a news update about the Super reforms proposed in the 2016-17 budget. It can now be confirmed that these proposed changes have all passed through parliament and are set to take effect from the 1st of July, 2017. These are some of the changes that you can expect:
- Non-concessional contributions will be limited to balances of under $1.6million
- Once beyond this balance, no non-concessional contributions are payable
- Superannuation pensions exceeding $1.6 million will be reigned in
- If your balance exceeds $1.6 million after the 30th of June, 2017, you may be taxed with an excess transfer balance tax. Only $1.6 million can be held in a tax-free pension.
- Non-concessional contributions reduced from current $180 000 to $100000 per annum.
- Under 65s can contribute up to $540 000 this year using the current caps and the bring-forward rule but only before the new financial year.
- Concessional contributions reduced to $25 000 per annum
- Crackdown on the tax paid by higher income earners
- The income bracket defining a ‘high income earner’ will drop from $300 000 to $250 000
However, it is not all bad news. There are some positives to come from all of this:
- Tax deductions for personal superannuation contributions will be available to those under 75 years.
- In 2018, the ‘carry forward’ rule will be introduced, allowing you to make additional ‘carry forward’ concessional contributions if you have not fully utilised your concessional contributions cap for the past five years.
This is a lot of information to take in and apply. It is recommended that you see a financial advisor to ensure that you are making the most of these last few months before the reforms kick in. It is always good to ensure that our super is as healthy as it can be to ensure a happy retirement. If you would like some support, guidance or advice regarding your super, please book a consultation with one of our friendly financial advisors by visiting the Enquire&Book page or calling 3812 1420. We are always happy to help you out.