partners for life
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.
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