Changes to Super 2017 - How will they affect you?
There are several super changes that will come into effect from 1 July 2017. These were originally proposed in the 2016-2017 Federal Budget and were legislated when the Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 passed parliament.
Pension Account – Transfer Balance Cap
Generally, upon retirement, the entire balance of your superannuation can be transferred from an Accumulation Account to a Pension Account, where any earning on the funds are tax-free. From 1 July 2017, a $1.6 million cap has been introduced on the amount that can be transferred to a super retirement phase. Additional savings can remain in accumulated account (where earnings are taxed at 15%) or remain outside super.
Concessional Super Contributions threshold reduced
The annual concessional contributions cap has been reduced to $25,000 (from $30,000 for those aged under 49 and $35,000 otherwise). This comes into effect from 1 July 2017.
Non-concessional contributions cap reduced and criteria introduced
The annual non-concessional contributions cap has been reduced from $180,000 to $100,000. In addition, criteria for an individual to be eligible for the non-concessional contributions cap has been introduced and other minor amendments to the non-concessional contributions rules have been made. These changes come into effect from 1 July 2017.
Low Income Superannuation Tax Offset to replace the Low Income Super Contribution
The Low Income Superannuation Tax Offset (LISTO) will replace the Low Income Superannuation Contribution from 1 July 2017. The LISTO refunds up to $500 of the tax paid on concessional super contributions for low-income earners with a taxable income of up to $37,000.
Greater deductibility of personal contributions
The requirement that an individual must earn less than 10 per cent of their income from employment to be able to deduct a personal contribution to their super to make it a concessional contribution has been removed. This will apply from the 2017-18 income year.
More tax offsets for spouse contributions
This increases the amount of income an individual’s spouse can earn before the individual stops being eligible to a tax offset for contributions made on behalf of their spouse. This will apply from the 2017-18 income year.
Proposed changes to superannuation for 2017/18 were announced in the Federal budget on 9th May 2017. Please note that the changes proposed in the budget are yet to be legislated. The proposed changes announced include:
Allowing first home buyers to build a deposit inside super
From 1 July 2017 this proposal will allow first home owners to withdraw any voluntary contributions above the standard employer super guarantee contributions to fund the deposit of their first home.
A first home owner can contribute up to an extra $15,000 per year [above their guaranteed employer super contributions] up to $30,000 in total. It will go into a separate account within their existing super fund.
From 1 July 2018 they will then be able to withdraw this account at a concessional tax rate being their marginal tax rate less 30%].
Changes to Super 2017 - A Q&A Breakfast with Eryan Haddon and Rob O'Donnell
The recent Federal Budget has introduced quite a lot of changes to Superannuation… And most of these changes are effective from 1st July 2017. Not sure how these may affect you? Then this is interactive seminar is for you. Financial Planner Rob O’Donnell, and our Super Specialist Eryan Haddon, have organised a FREE Q&A Breakfast to go over all the changes and all your questions.
Date: Tuesday, 20th June 2017.
Time: 7.30am to 9am
Venue: Wardles Office – 3A Miles Street, Mount Isa.
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