Likely changes to superannuation in 2017

2016 was a big year for superannuation changes, probably the largest since the 2007 ‘simpler super’ reforms. However this doesn’t mean that 2017 will be devoid of changes to superannuation.

A likely early issue will be setting an objective for superannuation in legislation, which was a recommendation of the Financial System inquiry. Though the recommendation was to seek broad political support for the objective, something which has not occurred, with the Labor party and superannuation industry taking issue with the proposed objective.

Several of the Government’s proposed Bills changing superannuation lapsed when Parliament was prorogued ahead of the Federal Election and weren’t re-introduced. These are likely to reappear in 2017, including expanding choice of super fund to more employees.

Super fund governance will also return as an issue in 2017, with the Government announcing it intends to re-introduce legislation which would change the governance arrangements for large super funds – including requiring at least one-third independent directors and an independent chair. But the changes are controversial, with the Superannuation Legislation Amendment (Trustee Governance) Bill 2015 was last debated in November 2015 before lapsing when the Parliament was prorogued – necessitating the reintroduction.

Changes to reporting by large super funds, changes to the Choice Product Dashboards and Portfolio Holding Disclosure, may also be re-introduced.

The Government will also move ahead with another recommendation of the Financial System Inquiry – the introduction of Comprehensive Income Product for Retirement (CIPR) / MyRetirement products. Consultations on a discussion paper close in April 2017.

Legislation is also still before the Parliament to give the ATO Commissioner the power to modify the operation of tax and superannuation laws, in the Tax and Superannuation Laws Amendment (2016 Measures No. 2) Bill 2016.

Of course, there may also be further changes to superannuation in the 2017 Budget.

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This article, as with all content on this site, is for informational purposes only, and is not legal, financial, tax or other advice. Please read our Terms and Conditions of Use.

Superannuation changes in 2016

Superannuation changes in 2016 have been dominated by the range of measures announced in the 2016/17 Federal Budget – though several of these changes to superannuation have been modified or abandoned. Below is a list of many of the changes to superannuation in 2016 and their current status.

In brief, many of the Government’s changes to superannuation announced in the 2016 Budget, some of which have subsequently changed, have passed the Parliament: Fair and Sustainable superannuation package passes Parliament.

Continue reading “Superannuation changes in 2016”

Superannuation caps, amounts & rates for 2016/17

ATO, superannuation contribution caps, superannuation thresholds, concessional contributions, non-concessional contributions, co-contribution rate and thresholds, maximum contributions base, low rate cap amount, cgt cap amount, untaxed plan capUpdate: The changes to superannuation announced in the 2016 Budget, if enacted, would have implications for some people – particularly in regards to the Non-Concessional contributions cap.

The superannuation rates and caps for the 2016/17 financial year have been released, including the contribution caps.

Superannuation contribution caps – Concessional and Non-Concessional

The contribution caps are no longer frozen, however wages growth has not been sufficient to result in an increase in the rates.

The general Concessional Contributions Cap remains at $30,000 for 2016/17 and the cap for people 49 years of age or older, at the end of the previous financial year, also remains unchanged at $35,000.

The Non-Concessional Contributions Cap remains at $180,000, with the three-year bring forward therefore staying at $540,000.

Because the higher cap for people aged 49 or older is not indexed it will eventually be overtaken by the general cap.

Co-Contribution

The maximum Co-Contribution remains at $500 for 2016/17, though the phase-out thresholds have been indexed, with the lower threshold now $36,021 and the higher threshold $51,021 for 2016/17.

Maximum Contributions Base

The Maximum Contributions Base, the quarterly salary limit for superannuation guarantee contributions has been indexed to $51,620 for 2016/17.

Low Rate Cap Amount

The Low Rate Cap amount, a lifetime cap for superannuation lump sums at a concessional rate of tax, remains at $195,000 for 2016/17.

CGT Cap Amount

The CGT Cap amount, a lifetime limit for CGT contributions exempted from the non-concessional contributions cap, has been indexed to $1,415,000 for 2016/17.

Untaxed Plan Cap Amount

The Untaxed Plan Cap Amount, which limits the concessional tax treatment of superannuation benefits which have not been subject to contributions tax, has also been indexed to $1,415,000 for 2016/17.

The superannuation contribution caps, CGT Cap, Low Rate Cap and Untaxed Plan Cap are all indexed annually by AWOTE (Average Weekly Ordinary Time Earnings), in $5,000 increments.

The full list of superannuation-related caps and rates can be found on the ATO website.

Want to be kept up-to-date with SMSF and Superannuation changes, why not subscribe to our Newsletter?

This article, as with all content on this site, is for informational purposes only, and is not legal, financial, tax or other advice. Please read our Terms and Conditions of Use.