Even with ‘reasonable’ alignment between the political parties on reform to superannuation tax concessions, some of the more contentious issues were becoming a real battleground between the front and back bench of the Coalition Government. With the Labor Party recently deciding to not support certain measures of the super reform package, the landscape on how these changes may actually unfold started to look a little different. And different they have become…
We have seen today the Federal Treasurer announce three key changes to the superannuation policies that were previously announced on Federal Budget night. These changes include:
- Dumping the $500,000 lifetime limit for non-concessional contributions that was to be backdated to 1 July 2007. Instead, a $100,000 annual cap will operate (replacing the current $180,000 p.a.), with individuals under age 65 eligible to utilise the three-year bring forward. However, where an individual has an account balance above $1.6 million, they will no longer be able to make any further non-concessional contributions from 1 July 2017;
- Removing the measure to extend the eligibility to contribute through to age 74, effectively keeping the ‘work test’ requirements for individuals who want to make contributions between 65 – 74 years of age; and
- Deferring until 1 July 2018 (by one year) the commencement of the 5 year rolling concessional contribution caps for those individuals with an account balance under $500,000.
It is now expected that this legislation will be introduced by the end of the year.
We will be discussing this and more in next week’s ‘Changing Face of SMSF’ webinar, taking a look at the latest technical and regulatory issues impacting SMSFs.