Positive changes for superannuation largely unknown
19 August 2016: Five positive measures for superannuation reform did not get any focus during the recent election campaign and are largely unknown by the Australian public, says Deloitte.
The five measures are, broadly:
- Individuals under age 75 will soon be able to make top-up personal superannuation contributions up to the annual concessional contributions cap and claim these in their individual tax return
- Where an individual’s superannuation balance is less than $500,000, unused concessional contribution cap amounts will be able to be carried forward on a rolling basis for five consecutive years
- Older Australians aged between 65 and 74 will be able to make superannuation contributions and not have to meet a work test
- Eligibility for the low income spouse superannuation tax offset will be made more accessible by allowing a spouse to earn income up to $37,000 before the offset cuts out
- The type of pension products that receive a tax exemption for earnings will be extended to include deferred annuities and group self-annuitisation products.
Deloitte Tax partner Meghan Speers, explains: “The Federal Government made 12 significant announcements regarding superannuation in May’s Federal Budget. However, much of the subsequent discourse, including during the election campaign, has focused on just two measures – the $1.6 million pension transfer cap and the $500,000 life-time cap on non-concessional contributions.
“Whilst the focus has been on these two reforms, the bulk of the super measures that actually benefit the majority of taxpayers by adding flexibility to the system are largely unknown to most super scheme members.
“Aimed to benefit older Australians, people who don’t have salary sacrifice arrangements in their jobs, work part-time or have interrupted work patterns, these measures are a significant shift from previous rules.
“Expected to come into effect 1 July 2017, they will help more people save for their retirement at times when it suits them. They are believed to have bi-partisan support, yet have received little or no exposure since they were announced earlier this year.
“While more can be done on the flexibility front, these new rules are a very good start and will make superannuation far more accessible. That will be a good result for many Australians.”