Superannuation changes passed by Parliament

The government’s extensive changes to taxation laws regarding superannuation were passed by Parliament on 23 November 2016.

According to the Treasurer, Mr Scott Morrison:

“The superannuation reform package better targets tax concessions to make our superannuation system fair and sustainable, as the population ages and fiscal pressures increase.”

“The reforms include the introduction of a $1.6 million transfer balance cap, which place a limit on the amount an individual can transfer into the tax-free earnings retirement phase and the introduction of the Low Income Superannuation Tax Offset”.

The amendments also include two new measures to provide more flexibility to help Australians save for their retirement which are as follows:

• the removal of the ‘10% rule’, allowing anyone, including employees, to claim a deduction for personal contributions into superannuation from 1 July 2017. This will particularly help
contractors who also draw income from salary and wages.

• the ability for individuals that have superannuation balances below $500,000 to make ‘catch up’ concessional contributions from 1 July, 2018 (allowing them to ‘tap into’ unused amounts
of their contributions cap from prior years, which will help those with broken work patterns – most of whom are women – save better for their retirement).