Further alteration to proposed super changes
Today we have had the Government announce further alterations to the proposed superannuation changes off the back of extensive resistance to some of the proposed measures.
We now have seen the removal of the harmonisation of contribution rules for those aged 65 to 74. This measure was going to allow individuals aged 65 to 74 to still make contributions to superannuation without needing to pass a work test which they have had to do under current legislation. This is as a result of needing to save the costs of this measure to offset the fact that the proposed lifetime non-concessional contribution cap of $500,000 is now off the table.
On a more positive note however we have seen the replacement of the $500,000 lifetime non-concessional contribution cap with alternative measures that are more generous. The new proposed measure will reduce the current annual non-concessional contribution cap of $180,000 down to $100,000 per year. In addition to this it has been proposed to keep in place the ability for people utilise 'bring forward' three year rules that will allow three years of non-concessional contributions to be made in the one year ($300,000).
The other measure now on the table is to disallow individuals with more than $1.6 million in superannuation to be eligible to contribute non-concessional contributions. This is effectively imposing a new life time contributions cap of $1.6 million instead of the previously proposed $500,000 lifetime cap.
Click here to read the Governments media release on this topic.
I note until we have certainty on this and see the final legislation people should seek advice before making significant non-concessional contributions to superannuation.
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