- 23 November 2016 super reforms passed through parliament
- Objective of superannuation
Provide income in retirement to substitute or supplement the Age Pension
Intended to encourage people to save for retirement rather than an opportunity for tax minimisation.
- Transfer balance cap
$1,6mil transfer balance cap – into tax free retirement phase
Excess taxed at 15% in accumulation account
- Concessional super contributions
From 1/7/17 concessional cap will be $25,000
From 1/7/17 person earning over $250,000 pays 30% on all concessional contributions
Any excess over the $25,000 cap is taxed at taxpayer’s marginal rate
- Annual non-concessional cap
From 1/7/17 cap reduces from $180k per year to $100k
Taxpayers with >$1,6mil in super are not allowed to make further non-concessional contributions
- Improved access to concessional contributions
Currently – take total income – if greater than 10% is earned from salaries & wages, then any personal contributions are non-deductible.
From 1/7/17 the 10% rule is eliminated from the equation.
- Catch up concessional contributions
From 1/7/18 if you have a super balance of less than $500k you will be allowed to catch up concessional contributions for up to 5 years.
- Transition to retirement income streams
From 1/7/17 the earnings from these income streams will be taxed at 15% rather than zero.
This will ensure that TRIS is not used as a tax minimisation strategy