There are a number of changes set to occur to superannuation in Australia from 1 July 2017.
Boosting your super before 30 June 2017
Please find below a quick guide to the changes:
Current superannuation arrangements
- The total concessional contributions you can make to your superannuation is capped at $30,000 per year (or $35,000 per year if aged 5o or over). These contributions access a tax rate of 15% per year compared to your marginal tax rate.*
- The total non-concessional contributions your client can make is capped at $180,000 per year and $540,000 under the three-year bring forward rule.
Superannuation changes as of 1 July 2017
- Concessional contributions to superannuation will be capped at $25,000 a year, regardless of age. These continue to access a tax rate of 15% per year compared to your marginal tax rate.*
- The total non-concessional contributions you can make is capped at $100,000 per year and $300,000 (for those under 65) under the three-year bring forward rule.
- If you have a total super balance over $1.6 million (as at 30 June of the previous financial year, or are aged 65 years or over and no longer working), you may be restricted from making non-concessional contributions.
- The maximum amount you can invest in the retirement phase will be $1.6 million. If the balance exceeds this, you will be required to move the excess back to the accumulation phase, or withdraw as a lump sum by 1 July 2017. This deadline is extended to 31 December 2017 for excess amounts below $100,000.
- Earnings on Transition-to-Retirement pensions will be taxed at up to 15% per year compared to your current tax-free status.
*An additional 15% tax rate may apply to higher income earners.
Given the impact the above changes could have upon your superannuation and retirement plans, now may be a great time to get in touch with your financial planner or adviser. Please call our friendly team on (07) 4638 1155 if you would like to discuss how we can assist you with a plan going forward.