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Super Changes: Proposed $500,000 Lifetime Cap Axed

The 2016-17 Federal Budget included various proposed amendments to superannuation. One of the most contentious reforms was a proposed lifetime cap of $500,000 on non-concessional contributions.

Following extensive consultation, the government recently announced new developments to the proposed reforms, including the $500,000 lifetime cap which is to be scrapped.

The non-concessional contributions cap will now be $100,000 per year beginning 1 July 2017, and taxpayers with a superannuation balance of more than $1.6 million will not be eligible to make non-concessional contributions also commencing 1 July 2017

Other proposed measures have been postponed or abandoned, including:

• The commencement of catch-up contributions utilising unused concessional caps from the previous five years for individuals with balances of $500,000 is postponed and will start from 1 July 2018.
• The harmonisation of acceptance of contribution rules for individuals aged 65 to 74 will not proceed at all.

Rules that are unchanged include:

• The rule allowing individuals under 65 years of age to “bring forward” three years’ worth of non-concessional contributions; and
• Individuals over the age of 65 are required to meet the “Work Test” rules in order to make non-concessional contributions, personal concessional and salary sacrifice contributions.

If you have any questions regarding your superannuation, our financial planning team are always here to help. Contact us at (08)9301 2200 or complete this form.

written by:

McKinley Plowman