Super Changes….Again!

Super

In the 2016-17 Budget, the Treasurer announced a package of reforms designed to improve the sustainability, flexibility and integrity of the Superannuation system.

The objective for the changes to Super was stated as ‘to provide income in retirement to substitute or supplement the Age Pension’.

Now, following extensive consultation, the Government has decided to amend the proposals.

The three changes on 15 September 2016 were:
  1. To replace the $500,000 lifetime non-concessional contributions cap with lower annual caps, of $100,000 per annum, with these contributions only possible for people with less than $1.6 million in their Super at the start of the tax year
  2. To defer commencement of carry-forward arrangements for concessional contributions
  3. Not to proceed with measures to increase the flexibility for contributions for people aged 65-74

The proposed legislation and regulations have been released for public consultation and once enacted, most measures will take effect from 1 July 2017.

The proposed changes now include:
  • Legislating the objective of Superannuation
  • Introducing a $1.6 million Superannuation transfer balance cap
  • Reforming the taxation of concessional Superannuation contributions
  • Lowering the annual non-concessional contributions cap
  • Introducing the Low Income Superannuation Tax Offset (LISTO)
  • Improving access to concessional contributions
  • Allowing catch-up concessional contributions
  • Extending the spouse tax offset
  • Removing barriers to innovation in retirement income stream products
  • Improving the integrity of transition to retirement income streams (TRIS)
  • Abolishing the anti-detriment rule
Conclusion

In this article we have summarised the latest proposals to change Super. More details of the proposed changes can be found here.

Given the far reaching effects of the changes proposed, it is vital to ensure you have the best retirement savings strategy to match your needs, coupled with effective investment management.

You should take stock of your retirement plans and make sure that you are on track for the retirement you want.

To arrange your no obligation retirement planning discussion contact your AAM Financial Planner or email [email protected] now.

Ian Black
Head of Wealth Solutions
AAM Advisory Pte Ltd

Source:
http://www.treasury.gov.au/Policy-Topics/SuperannuationAndRetirement/Superannuation-Reforms

Disclaimer:
This article is an op-ed piece by Ian Black. The views expressed in this article are those of the author and do not necessarily reflect the views of AAM Advisory Pte Ltd. This document/article should not be construed as an offer, solicitation of an offer, or a recommendation to transact in any securities/products mentioned herein. The information does not take into account the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a licensed financial adviser regarding the suitability of the investment product before making a commitment to purchase the investment product. Past performance is not necessarily indicative of future performance. Any prediction, projection, or forecast on the economy, securities markets or the economic trends of the markets is not necessarily indicative of future performance. Whilst we have taken all reasonable care to ensure that the information contained in this document is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness. Any opinion or estimate contained in this document is subject to change without notice. The above report may contain data obtained from third parties and as such we cannot guarantee the accuracy of this data.