Thursday, 15 September 2016
THE Government will scrap a key element of its superannuation reforms, doing away completely with the controversial $500,000 lifetime cap on non-concessional contributions.
PROPOSED CHANGES AS FOLLOWS
* Cut annual non-concessional contributions cap to $100,00 a year (down from $180,000).
* Under 65s can still “bring forward” three years’ worth of non-concessional contributions in a lump sum.
* Those with superannuation account balance of more than $1.6 million can’t make non-concessional (after tax) contributions after July 1, 2017. * They can make “catch-up” concessional contributions starting from July 1, 2018 (delayed by a year).
WHAT DOES THIS MEAN?
Each year you will be able to contribute up to $125,000 to your superannuation (combined before and after tax amounts) until your account balance reaches $1.6 million. If you want to “bring forward” a lump sum, you can contribute up to $325,000 in any one year.
WHAT IS NO LONGER PLANNED?
* A $500,000 lifetime cap on non-concessional contributions, backdated to 2007.
* Keeping a work test for people aged 65-74 who want to make extra contributions to their super.
Note – these changes have not yet been passed in Parliament. We will bring your further updates as they develop.