Today the government announced substantial proposed changes to super which we summarise below and provide more detail in the factsheet that can be downloaded here. Pleasingly, tax free withdrawals from pensions remain in place for over 60s.
More significant proposals are:
1. Tax-free income within pension accounts to be limited to first $100 000 of income per fund member from July 2014;
2. Increased contribution caps for certain members, irrespective of account balance, from this July for over 60s and next year for over 50s;
3. Improved options for excess contributions;
4. Council of Super Custodians created to assess future policy changes against agreed guidelines on a bi-partisan basis;
5. Fair and sensible changes to deemed income for Centrelink pension purposes;
6. Extend the good tax treatment pensions enjoy to include deferred lifetime annuities;
7. Increase in the threshold for which lost super accounts get sent to the ATO.
Remember that these reforms have not yet been legislated so we can expect further discussion and probably refinement before they become law, but they help reduce the uncertainty that has been building around super over the last few months.
If you’re over 50 you need to talk to Michael Rees-Evans, our Partner – Wealth Consulting, urgently about how this affects your own super.
Important note: this information is of a general nature and has been prepared without taking account of anyone’s financial situation, objectives or needs. Before making any investment decisions based on the contents you should obtain professional advice.