Australians are being urged to get on top of sweeping super changes and take advantage of saving opportunities before major reforms come into effect on 1 July.
“Not since 2007 has the superannuation industry seen so many changes.
“Some of these changes will have significant implications for investors, so it’s important that they have a good read about how these amendments will impact on them,’’ said NAB head of SMSF, Gemma Dale.
“For example, investors who are intending to retire in the next few years and don’t take advantage of the current contribution caps could be prevented from contributing hundreds of thousands of dollars to super, which could mean they miss out on the benefit of receiving a tax-effective retirement income on these amounts.
“Equally, there are some great opportunities for people to take advantage of from 1 July, such as the ability to claim a personal deduction for contributions as an employee. That change alone, could mean thousands of dollars in benefit for investors.”
Ms Dale also encouraged younger superannuants to get on top of the changes.
“Younger people sometimes think that super changes don’t really impact them because they are so far away from retirement, but things like the ability to claim a personal deduction, the carry forward of unused concessional caps and the higher spouse contributions could mean many thousands of tax-advantaged savings for those who take advantage,’’ she said.
Top big superannuation changes coming into effect in 2017:
- Introduction of $1.6m cap on pension amounts
- Reduced concessional (pre-tax) contributions cap to $25,000pa
- Reduced non-concessional (after tax) contributions cap to $100,000pa
- Prohibition on making non-concessional contributions for those with more than $1.6m in super/pension
- Reduced threshold for increased super contributions tax ($300k to $250k)
- Catch up contributions caps for those with broken work history or irregular income patterns
- Removal of 10% test (so employees can claim a deduction for personal contributions without having to salary sacrifice)
- Increased income threshold for receiving spouse when claiming tax rebate on spouse contributions from $13,800 to $40,000
- Removing the tax free status of transition to retirement pensions
Any advice in this publication is of a general nature and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.