Latest Government Announcement Regarding Superannuation
On 15 September 2016, the Turnbull Government announced a number of significant changes to the superannuation proposals which were first announced on Budget night earlier this year.
While the changes outlined below are expected to be introduced to Parliament before the end of 2016, they are still currently proposals and as such, not final.
The changes announced on 15 September 2016 include:
- The proposed lifetime cap of $500,000 per person for non-concessional contributions has been abandoned.
- From 1 July 2017, individuals may only make non-concessional contributions to superannuation where their overall balance in superannuation is below $1.6 million (assessed as at 30 June of the previous financial year).
- From 1 July 2017, where an individual is eligible to make non-concessional contributions, these contributions will be limited to $100,000 per annum (the current rules around ‘bringing forward’ two years worth of non-concessional contributions will continue to apply – i.e. depending on personal circumstances, an individual may be able to make non-concessional contributions of up to $300,000 in a single financial year).
- The existing requirement that an individual must meet the ‘work test’ (working 40 hours in any 30 day period during the financial year) to be able to contribute to super between ages 65 and 74 will remain (the Government had originally proposed to remove this requirement).
- The announced reduction of the concessional contribution cap to $25,000 per annum, per individual will remain, however the provision to allow a ‘catch up’ for those with less than $500,000 in superannuation has been postponed for 12 months until 1 July 2018.