The Australian Government yesterday announced updates to the superannuation changes announced in the 2016-17 Budget.
The updates have been made by the government following consultation with the public in light of much commentary and concern by the electorate surrounding the impact of the original announcements.
The updates announced yesterday include:
- Scrapping of the $500,000 lifetime non-concessional cap
- Reducing the existing annual non-concessional contributions cap from $180,000 per year to $100,000 per year
- Continuation for individuals aged under 65 to bring forward non-concessional contributions for three years totalling $300,000 able to be brought forward
- Individuals with a superannuation balance of more than $1.6 million will no longer be eligible to make non-concessional (after tax) contributions from 1 July 2017
- Continuation of only individuals aged 65 to 74 who satisfy the work test still being able to make additional contributions to superannuation.
A lucent Perspective
Following the original budget announcements in May, there certainly was much commentary and concern around some of the super changes, in particular the $500,000 lifetime Non Concessional Contributions Cap. The Government appears to have listened to the electorate and has made changes to the contribution limits accordingly. However, we still note that despite the updates, 96% of Australians will not be adversely affected by the changes. It is still our view that we would like to see in time a progressive tax system for superannuation similar to personal income tax to account for lower income earners.
We recommend that you speak to your financial advisor as to how these changes may impact on your planning for retirement.