With a new financial year almost upon us, it’s a good time to think about your finances and in particular your super, as things are set to change from 1 July 2017.
The government has introduced changes to super, aimed at tightening the rules to reduce super’s use as a tax reduction vehicle. Read on to see if they will affect you.
The concessional contributions cap (or the amount of pre-tax money you can put into your super during a financial year) from 1 July 2017 will be $25,000. It is currently $35,000 for those aged 49 years and over.
From 1 July 2017, the annual non-concessional (after-tax) contributions cap will be four times the concessional (before-tax) contributions cap (that is, $25,000 x 4 = $100,000 per financial year) and indexed annually. However, there are restrictions that may apply if you have $1.4m in your super.
The income threshold for spouse superannuation contributions will rise to $37,000 (and phase out at $40,000). Spouses can continue to contribute to their low income spouse’s super account with after-tax money and claim a tax offset of up to 18%.
If your employer does not permit salary sacrifice arrangements, or if you are self-employed, you will be able to claim a tax deduction for any personal super contributions you make.
From 1 July 2017, those earning more than $250,000 (adjusted taxable income) will pay 30% contributions tax on all concessional contributions to super.
Investment earnings within Transition to Retirement (TTR) accounts will attract up to 15% tax from 1 July 2017.
A $1.6 million transfer cap will be introduced on balances allowed to be transferred from super accounts into retirement income stream (pension) accounts. This amount will be indexed annually.
To find out more read about the upcoming changes – visit primesuper.com.au/2017-super-changes
DISCLAIMER – This article contains general information only and does not take account of your personal circumstances. You should obtain personal advice where appropriate. This article is current as at the date of publication and subject to change. Prime Super Pty Ltd ABN 81 067 241 016 AFSL 219723 RSE L0000277 as Trustee of Prime Super ABN 60 562 335 823. A Product Disclosure Statement is available from the issuer by calling 1800 675 839 or at primesuper.com.au