Superannuation Contribution Changes from 1 July 2017
A raft of superannuation changes are coming into effect from 1 July this year. These changes, legislated by the Federal Government, are significant and likely to impact most Australians. Although some of these changes are quite complex, here we will concentrate on changes to contribution rules only.
The level of contributions that can be made to superannuation in any given year are being reduced.
From 1 July 2017, the annual cap for concessional contributions is being reduced to $25,000 for everyone.
Currently, the annual cap for concessional contributions is $35,000 for anyone who is aged 50+ at any stage during the current financial year (superannuation contribution eligibility rules apply to anyone aged 65+), and $30,000 for everyone else.
From 1 July 2017, the annual cap for non-concessional contributions is being reduced to $100,000 for everyone ($300,000 if utilising ‘bring forward’ provisions – see below).
Currently, the annual cap for non-concessional contributions is $180,000 for everyone (again, superannuation contribution eligibility rules apply to anyone aged 65+).
For those under age 65, this can be $540,000 in a given financial year by ‘bringing forward’ the cap from the next two financial years – there are some complexities here, but broadly speaking, utilising the full $540,000 in one financial year would make you ineligible to make non-concessional contributions again for the next two financial years.
Do I need to do anything?
Maybe – it will depend on your personal circumstances.
If you are currently salary sacrificing to superannuation via an arrangement with your employer (or making regular concessional contributions as a self-employed individual), or you are currently making non-concessional contributions to your superannuation account on either a regular or ad-hoc basis, you may need to amend existing arrangements.
Contact us on 03 5223 1219 to arrange a meeting to discuss your personal circumstances and how the upcoming superannuation changes may affect you.
You can read about another significant upcoming change in our Transition to Retirement Pension Changes from 1 July 2017 article.