Many people who are contributing towards their superannuation or living off their super savings are unaware of significant changes to superannuation, coming into effect from July 1.
The changes are far too complicated to explain in this short article so all I have done is to list them below.
There are certainly some game changers here and if you wish to know more about them, I suggest you contact your super fund or financial adviser and get some advice on how they could affect you. Here are the main ones:
- Removal of tax exemption for transition-to-retirement pensions (TRIPs)
- Cut in annual concessional (before-tax) contributions cap to $25,000
- Introduction of a $1.6 million transfer balance cap
- Introduction of catch-up concessional contributions over 5-year period (from July 2018)
- Cut in annual non-concessional (after-tax) contributions cap to $100,000
- Continuation of the Low Income Super Contribution (super tax refund)
- Removal of work test for over-65s, for making super contributions (SCRAPPED)
- Extension of tax exemption for other types of retirement products.
- Increase in income threshold for spouse superannuation tax offset to $37,000 (and $40,000)
- Tax hike for more Australians: 30% tax on concessional (before-tax) super contributions
- Expansion of tax-deductible super contributions to all Australians
- Removal of option to treat a pension payment as a lump sum payment, for tax purposes
- Removal of anti-detriment provisions
- Non-super change: Delivery of personal income tax cuts
- Proposed introduction of non-financial superannuation changes
Working out how the changes outlined above will impact on your retirement is no simple task. Most of us would need professional help. If you’d like to know more detail about these changes, go to www.superguide.com.au.