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Federal Budget 2016 Update

Federal Budget 2016 Update

Further super changes announced on 15 September 2016

 

Federal Budget May 2016 announcement

Proposed changes announced 15 September 2016

Non-concessional (post-tax) contributions

  • A $500,000 lifetime non-concessional cap will apply to all non-concessional contributions made since 1/7/2007.

       Effective date: 3/5/2016

  • The $500,000 lifetime cap has been replaced with a reduced non-concessional cap of $100,000 per year or $300,000 using the three year bring forward rule for persons under age 65.
  • Individuals with superannuation balances more than $1.6 million will no longer be eligible to make non-concessional contributions.
  • Effective date (if legislated): 1/7/2017

 

Please note; for the 2016/2017 financial year the current rules apply. Individuals can make non-concessional contributions of $180,000 per year or $540,000 using the three year bring forward rule years for individuals under age 65.

Eligibility to contribute

  • Abolishment of work-test requirement on voluntary superannuation contributions for those aged between 65 and 74.

       Effective date: 1/7/2017

  • The Federal Government has decided not to go ahead with this measure.
  • This means individuals aged between 65 and 74 will still be required to meet the work-test.

 

Please note, to meet the work-test, a person must be gainfully employed for at least 40 hours over a 30 consecutive day period.

Allowing catch-up concessional (before-tax) contributions

  • To help individuals boost their superannuation savings, this proposal allows unused concessional contributions caps to be carried forward for up to 5 years to make additional concessional contributions.
  • This applies to individuals with superannuation balances of $500,000 or less.

       Effective date: 1/7/2017

 

  • This proposal has been postponed to commence from 1/7/2018 (if legislated).