Today the Treasurer has announced changes to 2016 Budget super reforms. These are not yet legislated and could of course change again, however it is a start;
The changes to the proposals are:
- The $500,000 lifetime cap for non-concessional contributions (NCCs) will be replaced with an annual $100,000 non-concessional contributions cap. So they have removed the retrospective nature of the proposed change, and the upper cap on lifetime contributions in part.
- The current NCC cap carry forward provisions will continue for those under age 65, allowing members to contribute up to $300,000 of NCCs over a 3 year period. Those with accumulation balances over $1.6 million will no longer be able to make non-concessional contributions. The measures above are intended to be effective 1 July 2017.
- The proposed carry forward of unused concessional contributions cap amounts will remain, however commencement will be delayed until 1 July 2018.
- The work test for those aged 65 to 75 will remain – this is a shame.
The following proposed Budget reforms will remain:
- Removing the less than 10 per cent employment income test for personal superannuation contribution deductions. Great news.
- The $1.6 million transfer cap for benefits transferred to pension phase.
- Reducing the annual income threshold for Division 293 tax on concessional contributions to $250,000. A real shame as many more will get caught by this extra tax.
- Reducing the concessional contributions cap to $25,000 pa and allowing a carry forward of unused cap amounts for up to 5 years where account balances are under $500,000.
- Income on assets backing transition to retirement income streams will be taxed at 15 per cent.
- The increase to the spouse income threshold for claiming a tax offset for spouse contributions.
- Continuing the Low Income Superannuation Tax Offset.
I will keep you all updated with any further changes as they occur