Proposed changes to Superannuation
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?…
Posted on October 14th, 2016