Last Thursday, the Government publicised the following proposed amendments to the superannuation changes announced in the 2016-17 Budget.
Non Concessional Contributions Cap
- The $500,000 lifetime non-concessional cap will be replaced by a new measure. This is to reduce the existing annual non-concessional contributions cap from $180,000 per year to $100,000 per year.
- Individuals aged under 65 will continue to be able to ‘bring forward’ three years worth of non-concessional contributions. This is in recognition of the fact that such contributions are often made in lump sums.
- Individuals with a superannuation balance of more than $1.6 million will no longer be eligible to make non-concessional (after tax) contributions from 1 July 2017. This limit will be tied and indexed to the transfer balance cap.
- These measures mean that with their annual concessional contributions, Australians will be able to contribute $125,000 each year and, if taking advantage of the non-concessional ‘bring forward’, up to $325,000 in any one year until such time as they reach $1.6 million.
- In addition, the commencement date of the proposed catch-up concessional superannuation contributions will be deferred by 12 months to 1 July 2018.
Contribution restrictions reversed
- Individuals aged 65 to 74 who satisfy the work test will still be able to make additional contributions to superannuation.
This blog provides the latest government updates, and originates from our previous 2016/17 budget blog written in June 2016. Please refer to our blog Super the Budget and You for comparisons between then and now.
Get in touch with BLG Business Advisers online or by calling (02) 4229 2211, to discuss how these amendments may impact you.