Superannuation proposal scrapped
Posted 16 Sep 16 by Tracey Scotchbrook
Federal Treasurer Scott Morrison has today announced that the $500,000 life time contributions cap proposed in the Federal Budget has been scrapped. The sting in tail of this proposal was not only the cap but the retrospective application to 1 July 2007. This had a significant impact on a number of contracts and transactions that were in progress at the time the announcement was made. Many people have been left in limbo since the announcement was made as the budget pronouncement meant that once legislation was introduced it would be effective from budget night.
The life time contribution cap is being replaced by new proposed reforms to the non concessional contributions caps:
1. Reduction of the current $180,000 pa cap to $100,000 pa
2.Bring forward rule to continue for members aged less than 65
3. Limited to members with superannuation balances less than $1.6 million
4. The proposed removal of the work test for members aged 65-74 years to be scrapped
5. Implementation date revised to 1 July 2017
At this stage we only have an announcement with draft legislation yet to be released. Nonetheless the proposed changes are a positive step in the superannuation reforms and important budgetary measures. Importantly superannuation members now have time to appropriately plan for these proposed changes.
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