If today’s press is correct, the backbench may have got its way with super. The election outcome and the Government’s thin majority had left us expecting some changes to May’s superannuation proposals.
The most contentious of the changes was the introduction of a $500,000 lifetime limit to non-concessional contributions and its perceived retrospective nature. Rumour has it, the Government has a new plan, which includes:
Existing non-concessional contribution limits of $180,000 per annum reducing to $100,000 per annum from 1 July 2017. The “bring forward” concept remains in place.
Does this mean we should be looking to take advantage of the existing $180,000 cap or the bring forward provisions (up to $540,000) where it makes sense before 1 July 2017?
If your superannuation balance is above $1.6 million, you will not be permitted to make further non-concessional contributions from 1 July 2017.
How will this be administered?
How would the Government aggregate multiple superannuation benefits for someone?
What happens if my balance falls below $1.6 million?
Should we alter our pension and estate planning strategies?
Work test for over 65 to remain in place.
This would certainly be a negative from the proposed changes, but is just retaining an existing policy.
Catch-up concessional contributions delayed until the 2020 financial year.
Very little detail has been released on how this rule will work. We await more detail about the mechanics and the potential opportunities that this rule may provide.
It appears the other superannuation proposals announced in May will remain unchanged. We await clarity on this.
The discussion within our office has been flowing thick and fast about the possible opportunities these changes may provide our clients. However, we will continue to ponder the impacts and keep you informed as concrete information becomes available.