Find Out and Take Action Now.
July 1 2017 marks the start of a raft of new super rules. While it's easy to leave super in the too-hard basket, the changes are significant.
Ignoring them could cost you money - or they might actually boost your super savings!
It's worth taking a moment to find out if they are likely to apply to you.
We've put together a short quiz to help you find out.
Please note: The quiz is general guidance only, and shouldn't be relied upon as advice - if you're unsure, please give us a call or check with your adviser.
to retirement rules
The annual cap on before-tax contributions to your super is being lowered to $25,000 for everyone, regardless of your age. For people aged 48 and under, the cap was previously $30,000 and for people aged 49 and above, it was $35,000.
From next year (1 July 2018), there is scope to contribute more than the cap if you haven't used it all in previous years. Speak to an adviser about this to make sure you understand the details.
Another change is the ability to claim a tax deduction on voluntary super contributions, for people whose employer doesn't allow them to salary sacrifice into super.
There is also a change for people on higher incomes. Until now, those who have an income (for 'surcharge purposes') of $300,000 p.a. or more paid an extra 15% tax (a total of 30% tax) on their before-tax super contributions. This income threshold is dropping to $250,000 from 1 July 2017.
If you pay extra into super from your after-tax salary, the existing cap of $180,000 p.a. will reduce to $100,000 per year or $300,000 (down from $540,000) over three years (if certain conditions are met).
The offsets for spouse contributions have only applied where a spouse's income is less than $13,800 per financial year. From 1 July 2017, that limit is increasing to $40,000. This means the tax benefit it is available to far more families than previously, and may be particularly helpful if one partner works part-time but wants to top-up their super.
One of the headline-grabbing changes is that individuals can only transfer $1.6 million into their "pension phase" super account (which will be called "retirement phase"). This new $1.6 million cap is referred to as the "transfer balance cap". Before now, there was no limit for receiving tax-free pension. After 1 July, people with more than the cap will need to reduce their balance to avoid paying higher tax rates.
Any amount over this can be held in an accumulation account - which is still super, but with tax rates applying.
Until now, people on a Transition to Retirement (TTR) pension paid no tax on the earnings from assets that supported their Transition-to-Retirement Income Stream (TRIS). From 1 July 2017, this will change and those earnings will no longer be a tax-exempt.
All income generated from TRIS assets will attract a 15% tax, regardless of when it started.
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