On the 15th September 2016 the Government announced significant changes to the proposed superannuation reforms, providing clarity and certainty for financial planners and clients around Superannuation.
The news that the retrospective $500,000 lifetime non-concessional cap has been removed is something the FPA has been actively advocating for on behalf of members since the Federal Budget.
Below are the key proposals:
- The $500K lifetime Non Concessional Contributions (NCC) Cap has been dropped.
- The Government has instead announced a reduction of the current annual Non Concessional Contributions (NCC) Cap from $180K to $100K from 1 July 2017. This will mean you can continue to contribute NCCs of up to $180K, and use the bring forward to $540K this financial year. The 3-year bring forward provisions will remain as per the current provisions based on the lower cap. No NCC contributions will be allowed once the proposed $1.6Million transfer cap has been reached.
- The reduction to a $25K NCC cap will remain in place and commence from 1 July 2017.
- The concessional contribution catch up provisions have been delayed and will now not commence until the 2019/2020 financial year.
- The Government has confirmed that Division 293 tax on Super will be reduced to individuals with salaries above $250,000 p.a.
- The government has changed their mind on the removal of the work test for those aged over 65.
What does this mean to you?…